Doing business in China
video opzioni binarie 24option China was on the radar for Azure Group for quite some time, but it was the opening of an office in Shanghai that helped the firm sink its teeth into the Chinese market, chief executive and founder Michael Derin says.
trading on line con postepay “The most important thing we’ve done is build a significant service office setup which means we can provide office space to foreign companies in China. That way, we can set them up with a physical space and then off the back of that offer them accounting and tax services. It’s a matter of having a broader offering,” Mr Derin says.
binary option broker cysec “We saw a real opportunity as a firm to help establish foreign firms who wanted to target that market, as well as establish Chinese firms in Australia. Since then, we’ve helped clients establish in Australia like China Telecom, that makes Telstra look like a minnow.”
One way Azure widened its target market was by embracing the cultural differences of operating a successful business in China.
“The main differences in the Chinese market, from what I can see, is that the Chinese typically see value in things like cars, houses, property and mining. They assign obvious value to those sorts of tangible assets and if you focus on those, that’s when you start to find traction in the Chinese market,” Mr Derin says.
“Going over with Australian businesses we’ve found that there are also certain products like wine and other core products that have done very well, while other types haven’t.”
While the opportunities are plentiful, firms should avoid getting ahead of themselves.
“Our expectations have changed as time has gone on. Initially there’s the temptation to think that it’s such a massive market it would be very easy to grow a substantial business operation around the Chinese business strategy,” Mr Derin says.
“What we’ve found is that the growth is steady rather than explosive. No one should really expect they can just go there and grow exponentially immediately. It takes time to develop relationships, to establish a presence, to build trust and a reputation, just as in any market.”
Firms looking to expand into China need to get the fundamentals right.
“You have to be able to tick a lot of boxes to be successful in China and it’s really important to have a trusted partner there. We’re lucky to have a partner who is an international tax expert in terms of cross-border rules, who is also bilingual.”
Many Australian companies find the prospect of establishing a foothold in China daunting, and Hong Kong-born Alan Ling was no exception.
“When you want to establish in China, the first thing you need to do is think of a Chinese name but even that’s not as easy as it sounds. We finally found an appropriate one after 25 attempts, and I speak Chinese,” Mr Ling says.
However, these challenges for businesses also offer enormous opportunities for firms who can facilitate that process.
“There’s a real need for firms to help establish foreign businesses in China given that the incorporation process in China can be quite difficult. One of the conditions of incorporation, for example, is that you have to have a physical office space before you can apply, which basically means paying two months in rent while you complete the paperwork,” Mr Ling explains.
With Mr Ling chairing the new McLean Delmo Bentleys set to open an office in Guangzhou, southern China this December, it’s a process he is familiar with.
He says the firm’s strategy in China will focus on showcasing the opportunities China offers to Australian businesses.
“We initially want our clients to taste some success in China, at first by setting up some exporting relationships for example. As they see the savings and opportunities available to them, they will become more and more comfortable with China…” Mr Ling says.
“I would say that Australian businessmen are fairly conservative in so far as they are reluctant to set up in China. So rather than holding their hand from Australia, we can help the client to source whatever they need from China, like business cards. In that way, we’re as much a consulting service as an accounting service.
“We want to take them to China but we don’t want to force them to deal with them too abruptly. Maybe over the course of 12 months or 18 months we can convince many to go over.”
http://broadwaybathrooms.com/?deribene=best-option-brokers&27f=07 Marco Carlei, ShineWing Australia
Marco Carlei was head of Moore Stephens Australia, the largest firm in Melbourne, when it joined with ShineWing International in February 2015.
The partnership allowed ShineWing Australia to access the Chinese market via a Chinese firm, the largest domestic accounting and consulting company in China.
“You can establish an office in a province and then try to penetrate the market that way, competing with established practices with existing relationship with firms which I think is very difficult and very challenging to do, yet many firms do this,” Mr Carlei says.
“What we’re doing instead is relying on our ShineWing partners in China who have these relationships which puts us in a stronger position with who they’re going to be dealing with in Australia.”
Mr Carlei adds that it’s important for Australian firms competing in China to find a point of differentiation.
“Our major market is state-owned and privately-owned Chinese enterprises in Australia, as well as those Australian businesses wanting to break into China. We don’t want to focus on SMEs or those markets that the second tiers are focusing on” he says.
“We have been positioning ourselves in sectors and industries that are aligned with China – agribusiness, education, tourism, property and construction, to name a few. Focusing on these in particular will give us an advantage because that is where the opportunities are going to be inbound and outbound.”
By narrowing its focus and targeting these specific markets, Mr Carlei believes ShineWing Australia is well-placed to take advantage of any opportunities that arise as investment in and out of China grows.
“There is substantial upside in the supply chain that we should take advantage of. We’re not doing that as well as we should be … and we’re seeing that, for example, the agribusiness sector is being properly exported from Australia so we’ve seen China looking at the distribution chain. We’re now well-placed to utilise our relationships to help them do that and partner with Australian businesses accordingly,” he says.
“We are clearly playing in a smaller market but it’s a substantial one, and we think we can target them better than anyone else considering we have the largest domestic Chinese network, the largest in Beijing and we have Zhang Ke at the head of ShineWing, who is recognised as the most important accountant in China. That reputation and that level of connection gives us a real edge over our competitors.”
most accurate archaeological dating method Tory O’Brien, member, IPA
Tory O’Brien was one of 25 accountants who was part of the IPA’s delegation to China in June to learn about doing business with the world’s second biggest economy.
“It was an incredible trip and my first time in China. It was a really varied experience, having done some dealings with business wanting to break into the Chinese market … there were some really important lessons in there,” Ms O’Brien says.
She says the five-day trip – which served as an introduction to Chinese culture and business – was an invaluable experience.
“I think the most important opportunity was to be able to network, to form those crucial relationships and understand how to connect Australian businesses with the appropriate organisations in China,” Ms O’Brien says.
“Navigating the foreign business and legal framework can be time-consuming and can lead to delayed results… It’s so important to have that knowledge so that as an accountant we can represent our clients.”
Despite the challenges of operating in China, Ms O’Brien believes accountants can tackle these challenges by being prepared to forge good relationships.
“There are so many obstacles so in order to represent a client it’s important to have someone in China to represent the client, to have a partnership and to have a network there,” she says.
Ms O’Brien says the biggest surprise of her trip was learning that the Chinese are just as interested in doing business with Australia.
“The Chinese wanted to learn so much about how we do business here in Australia as well, so I think there’s really a lot of opportunity to form partnerships.”
Andrew Conway – who has travelled to China more than 30 times in the last decade – has witnessed firsthand the massive transformation the country has undergone.
Mr Conway says the objective of the IPA’s trip in June was to give members an opportunity to see how much China has opened up.
“What we wanted to do with the delegation was open up the door for our members to China and say, ‘Here’s some of our contacts and our experience with China’, and hope they learned what enormous opportunities can come about from having good relationships and understanding the nuances of doing business there.”
Even he was surprised at how successful the trip was.
“A good example of that came from our networking, where our Chinese and Australian members got together and a few actually organised a few deals while we were over there which wasn’t an element we were expecting so it was a real eye-opener that there is a real hunger to do business,” Mr Conway says.
The trip came as the IPA continues to grow its relationship with China.
“Over the last seven or eight years, we’ve restructured our approach to China as we lead with education rather than membership. We ask Chinese accountants whether they want to learn about international accounting standards and have developed provincial agreements accordingly,” Mr Conway says.
“So far we’ve secured around 15 or 16 agreements with those provinces, which opens those markets up for us to offer education.”
Mr Conway says the Chinese market has its distinctions and these can drive success if firms and accountants are tapped into them.
“It can be a complex market, but one of the benefits of it being a planned economy is that you know what you’re up against. For example, we’re benefitting from the fact that the [Communist Party] Central Committee has got a very strong policy in support of training CFOs in international accounting, so they recognise that it will benefit their economy.”
Mr Conway says Australia and China have a solid two-way relationship, one that the IPA is keen to continue facilitating.
“We have run around half a dozen delegations of Chinese nationals and senior CFOs to Australia where we run educational courses, and that educational focus is based on what the Chinese are telling us they need,” he says.
He adds that no professional association can avoid engaging with and doing business with China.
“I think if you’re a professional association that doesn’t have exposure to China you’re doing your members a disservice. I see the IPA’s role as building a bridge to China and then it being up to members whether or not they want to cross it. For us, it’s about the transfer of professionals between Australia and China.”
With the IPA’s Chinese base growing each year, it’s likely that the relationship will continue to flourish.
“It’s a really exciting place to do business. From our point of view, we have over 3,000 members there and that’s grown over 25 per cent year-on-year over the last few [years].”
For more information on this year’s China delegation, please click here.