It is regarded as the center of Yangtze River Delta economic circle, the richest mega city cluster per capita in China.
With the highest GDP of any mainland Chinese city and half of its economic activity contributed by non-public enterprises, Shanghai is an economically vibrant and popular destination for private and foreign investment. Shanghai is transforming into a post-industrial economy. Important industries in Shanghai include financial services, wholesale and retail, real estate, transportation, construction, and manufacturing.
Shanghai has been undergoing major industrial restructuring and developing its high-tech industries. Six key advanced industries, namely electronic information products, automobiles, petrochemicals, fine steel, equipment, and bio-medicine, accounted for Shanghai is often at the forefront of pilot reforms and economic liberalization.
Certain types of foreign businesses and organizations operating in China are only permitted to set up within the Shanghai FTZ area. The FTZ itself has been gradually expanding — covering an area of Priorities for the municipal government include accelerating the development of the service sector, high-tech industries, manufacturing upgrading, agricultural modernization, and the Shanghai FTZ.
The Shanghai government has also expressed its desire to improve trade and investment facilitation, develop a market-oriented and law-based international business environment, and build a resource-conserving, environmentally-friendly city.
Or Shanghai? Or Guangzhou? The vast bulk of business in China is centred on the major cities and economic zones. For Australian businesses with little experience in China, a fact-finding mission in one of the main cities is a helpful starting point, as the concentration of businesses and professional services is much higher in these cities than in regional areas.
It is helpful to think of the Chinese economy as a decentralised collection of several regional economies. Central China is more agriculture-focused and not as wealthy, although low-end manufacturing is increasingly moving into the region. Western China is the least economically prosperous region, although it has significant natural resources. Having different strategies for different markets within China is important, as it helps to make the most of regional advantages.
Knowing Chinese business culture and etiquette is indispensable when doing business in China. It is also essential to be aware of all the social taboos and avoid any sensitive conversation topics. Chinese domestic politics, for example, is a subject that is best to avoid. The top tiers cities in China, like Shanghai or Beijing, are extremely popular locations for foreign investors. Therefore the competition within these cities is especially fierce. On top of that, the competition is between foreign companies and Chinese domestic companies, both private and state-owned.
However, the fierce competition can be a huge advantage of doing business in China. The intense competition often encourages businesses to improve the quality of goods and services they sell to gain more customers and increase the market share.
Because the Chinese government plays a much more active role in the national economy, the regulations and rules can be considered stricter than those of the West. For that reason, it is highly recommended to consult or hire a local expert to avoid any complications with Chinese law. If you decide to take a step further, it is crucial to have the proper tools and the right strategy to minimize the challenges above.
To enjoy a swift, trouble-free entry into the Chinese market, we at Xinergy Global provide all the services needed to make that happen. Contact us today for more information about our services, tailor-made solutions, and more.
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