Eu­ro­pean SMEs in China can get help

China Daily European Weekly - - Comment - Pe­ter Pronk The au­thor is the di­rec­tor of the EU SME Cen­tre based in Bei­jing. The views do not nec­es­sar­ily re­flect those of China Daily.

Cen­ter of­fers sup­port, ad­vice to close the knowl­edge gap

On a cold De­cem­ber morn­ing in 1995, I ar­rived in Bei­jing for the first time. China was grow­ing and be­com­ing a world eco­nomic leader, but not too many peo­ple knew this or even could pre­dict this. We came to China to pick up our daugh­ter whom we adopted. There and then I fell in love with China and I promised my­self that one day I would move to China to live. From 2003 on I started to visit China from a busi­ness per­spec­tive. Dur­ing these years and up to 2008, I was in­volved in bring­ing wind en­ergy tech­nol­ogy into China. With a new busi­ness set up here my wife and adopted daugh­ter moved to China in 2008.

In Oc­to­ber of this year, I ac­cepted a new chal­lenge to join the EU SME Cen­tre as the di­rec­tor to lead the team to ex­plore new paths for help­ing Eu­ro­pean small and medium-sized en­ter­prises with their China busi­nesses. I’m very ex­cited about this new role be­cause it com­bines my pas­sion for China and my long­time ex­pe­ri­ence in run­ning and sup­port­ing SMEs in China.

The EU SME Cen­tre is a Eu­ro­pean Union ini­tia­tive with fund­ing from the Eu­ro­pean Com­mis­sion to sup­port EU SMEs on their jour­ney to the Chi­nese mar­ket. It is im­ple­mented by a con­sor­tium of six part­ners — the China-Bri­tain Busi­ness Coun­cil, the Benelux Cham­ber of Com­merce, the China-Italy Cham­ber of Com­merce, the French Cham­ber of Com­merce in China, the As­so­ci­a­tion of Eu­ro­pean Cham­bers of Com­merce and In­dus­try (Eurocham­bres), and the Eu­ro­pean Union Cham­ber of Com­merce in China.

Our team of ex­perts pro­vides ad­vice and sup­port in four ar­eas: busi­ness de­vel­op­ment, law, stan­dards and con­form­ity, and hu­man re­sources. Col­lab­o­rat­ing with ex­ter­nal ex­perts world­wide, the cen­ter con­verts valu­able knowl­edge and ex­pe­ri­ence into prac­ti­cal busi­ness tools and ser­vices eas­ily ac­ces­si­ble on­line. From first-line ad­vice to in-depth tech­ni­cal so­lu­tions, we of­fer ser­vices through “Knowl­edge Cen­tre”, “Ad­vice Cen­tre”, “Train­ing Cen­tre”, “SME Ad­vo­cacy Plat­form” and “Hot-Desks”.

With the help of our team, our part­ners in Europe and China and many ex­perts around the world, we are work­ing very hard to bridge the knowl­edge gap of the SMEs to­ward China, pro­vide a com­pre­hen­sive range of hands-on sup­port ser­vices and get them ready to do busi­ness in China.

All of our ser­vices, in­clud­ing train­ing, pub­li­ca­tions, ad­vice and ad­vo­cacy, are aim­ing for one ul­ti­mate pur­pose — to help Eu­ro­pean SMEs ob­tain an un­bi­ased and ob­jec­tive view of the Chi­nese mar­ket. We help them from the very be­gin­ning, pro­vid­ing them with all the es­sen­tial in­for­ma­tion needed to eval­u­ate if they are ready to en­ter the Chi­nese mar­ket. It is very cru­cial to sup­port SMEs in their early stage of in­ter­nal­iza­tion be­cause the risk for them is too high. Many of them have small teams with very lim­ited re­sources, so ex­plor­ing a new mar­ket out­side of Europe is a big chal­lenge. This is one of the rea­sons that only about 20 per­cent of 20 mil­lion SMEs ex­port to coun­tries out­side of the EU sin­gle mar­ket and about 10 per­cent ex­port to China, ac­cord­ing to in­for­ma­tion from the Eu­ro­pean Com­mis­sion.

If some of them make de­ci­sions to come as the next step, we pro­vide them with train­ing and ad­vice on what they should do and should not do. For ex­am­ple, we ex­plain to them the com­mon ways of ex­port­ing and sell­ing prod­ucts, ser­vices and tech­nolo­gies to China, rules and reg­u­la­tions re­lated to set­ting up a busi­ness in the coun­try, and what to look out for when look­ing for Chi­nese busi­ness part­ners.

Dur­ing the last decade of work­ing in China, I have wit­nessed many for­eign busi­ness own­ers achieve re­mark­able suc­cess, but many failed as well. A lot of those mis­takes could be avoided if they were bet­ter in­formed and pre­pared.

This year we have seen the Chi­nese gov­ern­ment make quite a few sig­nif­i­cant steps to con­tinue its re­form and open­ing-up and to im­prove its busi­ness en­vi­ron­ment for for­eign com­pa­nies.

One of the most re­cent ex­am­ples was the first China In­ter­na­tional Im­port Expo, held in Shang­hai in Novem­ber, which at­tracted thou­sands of for­eign busi­nesses from all over the world, in­clud­ing many small-busi­ness own­ers who are still cu­ri­ous about China. We were asked by our Eu­ro­pean part­ners to sup­port their del­e­ga­tions with train­ing work­shops and we could tell that the com­pa­nies were all very ea­ger to learn more about China’s mar­ket land­scape.

In ad­di­tion, we are happy to see less re­stric­tion for for­eign busi­nesses to ac­cess the Chi­nese mar­ket, fol­low­ing a short­ened neg­a­tive list re­leased by the Na­tional De­vel­op­ment and Re­form Com­mis­sion and the Min­istry of Com­merce in June. We trust that with this change, those newly opened sec­tors in China such as au­to­mo­tive, pro­fes­sional ser­vice and agri­cul­ture could also ben­e­fit from the know-how of Eu­ro­pean SMEs, as many of them are pi­o­neers in their ar­eas and the driv­ing force of in­no­va­tion in Europe.

We also hear good news in fa­vor of SMEs in gen­eral op­er­at­ing in China. For ex­am­ple, the pref­er­en­tial tax treat­ment for small low-profit en­ter­prises was also ex­panded. Small busi­nesses with an­nual tax­able in­come of less than 1 mil­lion yuan ($144,000; 127,000 eu­ros; £112,000), in­stead of 500,000 yuan pre­vi­ously, can ben­e­fit from a pref­er­en­tial cor­po­rate in­come tax rate, fol­low­ing the an­nounce­ment of the Min­istry of Fi­nance and the State Ad­min­is­tra­tion of Tax­a­tion in July.

Cross-bor­der e-com­merce is an­other area we ob­serve very closely. When the State Coun­cil re­cently an­nounced the ex­ten­sion of the cur­rent pol­icy for cross-bor­der e-com­merce re­tail im­ports af­ter Jan 1, the re­ac­tion we re­ceived from our part­ners and Eu­ro­pean SMEs was quite pos­i­tive.

De­spite those im­prove­ments, EU SMEs that take an ini­tial step in the Chi­nese mar­ket should re­main pru­dent, gather all the avail­able in­for­ma­tion out there, and seek pro­fes­sional help along the way. As a Chi­nese say­ing goes, op­por­tu­ni­ties are there for those who are pre­pared.

Sadly enough, from our ex­pe­ri­ence, we learned that many times Eu­ro­pean SMEs run into many habit and cul­ture dif­fer­ences. When do­ing busi­ness in China, SMEs need to learn to have pa­tience, pre­pare well for the mar­ket, pro­tect in­tel­lec­tual prop­erty rights and take time to in­vest in re­la­tion­ships.

China is truly one of the most beau­ti­ful coun­tries in the world. It is a coun­try with cit­i­zens who are hard-work­ing, ded­i­cated and proud. We, to­gether with mil­lions of Eu­ro­pean SMEs, share the same vi­sion to con­trib­ute our ef­forts to create a pros­per­ous so­ci­ety, not only for busi­nesses, but also for fam­i­lies, com­mu­ni­ties and our en­vi­ron­ment. And we do be­lieve that with joint ef­forts from gov­ern­ments, com­pa­nies and in­di­vid­u­als, we can make it hap­pen.

ZHAI GUIXI / FOR CHINA DAILY

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