What do I need to be aware of when entering China? Are there risks to doing business there?


China offers great opportunities for Australian SMEs but there are some unique challenges to doing business there. Australia’s International Business Survey 2015, sponsored by Export Finance Australia, asked over 1,200 Australian international businesses what they believe are the most difficult barriers to doing business in China:

Local language, culture and/or business practices

  • The local language can be an inhibiting factor when seeking to establish relationships and win contracts
  • Finding a local translator can be a big help early on

Understanding local regulations

  • The World Bank’s ease of doing business gauge — which attempts to measure local regulation relevant to SMEs — ranks China 96th out of 189 economies
  • China ranks the lowest on ease of registering property and enforcing contracts

Payment issues

  • Operating in international markets can throw up a range of payment challenges. Businesses need to make sure they protect themselves to ensure they get paid
  • Your accountant or banker can help you understand your preferred payment options  

Regulations that favour local firms

  • Regulatory barriers can mean it is hard for an international business to operate
  • A reform agenda announced by the Communist Party in 2013 laid out steps to equalise policies and treatment of foreign and local enterprises

Protection of intellectual property rights

  • Safeguarding intellectual property is a concern to be aware of in the Chinese market
  • Building strong relationships with local partners can be valuable in avoiding IP risks, as can protecting your products with patents

Austrade, the Australian Government’s trade and investment agency, provides more information on some of the potential risks to doing business in China and how to mitigate them. 

70 per cent of respondents said that they found operating in China more difficult than operating in Australia – Australia’s International Business Survey 2015.