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4 strategies for leadership success in China

If you wish to enter an overseas market, you must be ready to research on the different ways of doing business within your target market. Every region has its own unique cultural nuances and ways of business leadership, after all. One of the key regions that every ambitious businessperson must consider launching a business in is China. I mean, this country has the fastest growing economy in the world right now and is right at the center of the very promising Far East regional economic takeoff.

To succeed as a business executive in China, you must have “face” and “guanxi”. Of course, you must be a creative and strategic thinker just like any other executive officer anywhere, but guanxi overrides most conventional business leadership markers. That aside, you must also have the resilience to overcome the many obstacles that international businesses face in China and have a big vision, excellent skills to inspire growth, and the ability to see openings that your competitors cannot.

China is a fast-evolving ecosystem, in which you must work twice as much as you do in the west if you are to keep pace with the country’s runaway growth, fierce competition, massive tech adoption, and exponentially growing urbanization.  You must also have sufficient strategies of addressing challenges such as endemic corruption by local authorities, dramatic economic slowdowns, and the huge rural markets whose needs are completely different from those of the urban markets. Luckily, this article explores 4 strategies that will help you succeed as a leader in China. But first:

How to Register Their Businesses in China

The step-by-step process for China company registration process is summarized below:

1.         Identify your business scope, an entity status, and a preferred location for your business. With that, obtain a new company’s legal address.

2.         Prepare business plan that clearly outlines your Chinese entity’s intended operations. It is at this point when you will register your company’s capital amount. If you are a manufacturer, you will need a copy of your feasibility study for this step.

3.         Choose a Chinese name for the business and send it to SAIC for approval. If approved, you will be issued with a SAIC pre-registration certificate. You will also be eligible to apply for the Letter of Approval from the Ministry of Commerce (MOFCOM)

4.         With the MOFCOM letter, go ahead and apply for the Chinese Government Approval. You will need all the documents you were issued with in steps 1, 2, and 3, plus an Article of Association (Company’s Profit repatriation analysis & report).

5.         Register with the Public Safety Bureau (PSB), the State Administration of Foreign Exchange (SAFE), and the tax bureau.

6.         Open your company’s basic bank account and set-up your company’s basic financial information. You will also need a foreign capital account where you will deposit your business capital.

7.         Hire an Accountant & Cashier for all your accounting and book-keeping needs. It is best that you liaise with a Chinese recruitment agency for this.

8.         Prepare all the necessary legal documents for your employees, including career management, remuneration agreements, staff training, and other terms of service.

9.         Trademark your intellectual property with the China Trademark Authorities. Note that anyone can claim ownership to your intellectual property if you fail to trademark it, regardless of whether you have trademarked it in your home country.

10.       Obtain all the necessary licenses and permits for business depending on your scope of business and the industry you are in.

4 Strategies for Leadership in China

1.         Tap the authorities

Management in China stretches beyond managing your subordinates to managing the government. The Chinese Communist Party only stopped micromanaging private companies a few years back, but the effects of the closed-fist regime are yet to fade away. The local authorities still have a firm control, legal or otherwise, of conventional sources of raw materials, the local talent market, and business funding. You must tap the Chinese officials to gain access to these very important resources. You will have a rough time finding employees or importing raw materials without the blessings of the local authority, regardless of how decorated a business executive you are.

2.         Decentralize

As much as you must control your company from the top, you must be careful not to carry all the company’s growth burden on your shoulders. You will be able to respond better to market shifts and have the muscle and energy to rapidly add new business lines when you decentralize powers. As we mentioned, the need for adaptation is constant in China due to the fast-paced economy. There are enough talents that can help you adapt to these changes if you give them the chance.

3.         Value localization

We mentioned how unique the rural market differs significantly from the urban market. This part of China is still developing and the potential customers here aren’t too familiar with western brands. You must go down to their level and learn the unique local business customs and traditions. Part of your localization plan should be investing in professional document translations. Hire a Chinese translation company that offers high-quality translations from English to Mandarin Chinese. Note that it is a legal requirement in some provinces that you translate technical documents such as financial, engineering, and medical documents.

4.         Create your own ecosystem

This means building everything from scratch, especially the company culture, government ties, and employee expectations.  Opening schools for employees’ kids will give you a good head start. Follow that up by recruiting the right talents and investing in training programs that excite young talents to keep working for you. You should have a long-term plan of weeding out employees that have low or no potential for growth and then promoting low-ranking employees who are capable of growing to become great business leaders.


It takes hard work to get into China and establishing yourself as a reputable brand. Retaining the best talents in a highly-competitive job market is also a tall order for many international entities. To forge ahead successfully, you must have a strategy for navigating the pitfalls of maintaining operations in China.

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