Business in China requires preparation, say European SMEs

(AGI) Rome, Aug 25 - China has undergone radical changes in recent years. Having transitioned from a nation of low-cost production to a market for high-quality goods, with an increasingly demanding clientele, China now offers huge opportunities for Italian small and medium-sized enterprises (SMEs). Speaking to AGI, Rosario Di Maggio, president of the Forum for SMEs of the European Chamber of Commerce in China, emphasised that China offers fertile ground for foreign businesses on condition that the ventures be preceded by a solid preparation and a deep knowledge of the country. "The main difficulties of the Chinese market are mainly attributable to superficiality," Mr Di Maggio affirmed. "One must particularly bear in mind that Chinese legislation on foreign investments has only been developed in the last few years, and opening and maintaining a business or a branch of a foreign company can be made extremely complicated by bureaucracy, sudden reforms, lack of transparency, and differing local interpretations." "China has an emerging middle class, with increasingly higher per capita incomes and rising consumption levels, especially among young people," Mr Di Maggio explained. He went on to note that China offers "vast export possibilities for countries like Italy", especially in the sectors of fashion, design, food, healthcare and medical equipment, as well as in Information and Communication Technology (ICT). "Making sure that you've identified the right business model, studying the market and local tastes, and - most of all - properly structuring your sales force are definitely vital factors for success. Identifying a business model to implement, promoting your business in order to be able to sell, and identifying market niches must all be done before coming here," asserted Mr Di Maggio. "Furthermore, one must consider that costs can be very high, which means that this market isn't for everybody. Especially in China's larger cities, where selling isn't economical, as rent, human resources, and administration fees can be high and taxes aren't as low as one would expect either." (AGI). .