How to Succeed in Business in China: Insights from 22 Years on the Ground

Doing business in China has evolved significantly over the past two decades, yet its fundamentals—deeply rooted in the country’s culture, history, and rapid economic rise—remain a unique blend of opportunity and complexity. Having lived in China for the last 22 years, I’ve experienced firsthand the profound shifts in the business landscape and learned the nuances that are essential to thriving in this dynamic environment. Here are some key insights, drawn from my experiences, that can help business leaders navigate and succeed in China.

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?1. Understand Guanxi (Relationships)

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In China, business success is built on relationships, or "guanxi." This concept goes far beyond networking as it’s understood in the West. Guanxi is about trust, long-term connections, and mutual obligations, influencing everything from negotiations to daily operations.

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Early in my career in China, I was introduced to guanxi when I tried to expand my business into a new region. I had the perfect product and competitive pricing, yet I struggled to make headway with local partners. It wasn’t until I was invited to a series of dinners, where business wasn’t even mentioned, that I realized these meetings were critical for building trust and rapport. My willingness to invest time in personal relationships, attend local events, and understand the family dynamics of my business partners ultimately opened doors that had previously seemed closed.

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One of the key lessons I’ve learned is that guanxi isn’t transactional. It’s about showing loyalty, consistency, and care over time. My relationship with some of the key partners I’ve worked with has spanned over a decade, built on trust established during these early, informal interactions.

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?2. Adapt to the Local Business Culture

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Western business practices often emphasize speed, efficiency, and directness. However, Chinese business culture values patience, harmony, and subtlety. Negotiations can be lengthy, and decisions may be deferred as a sign of careful consideration, not hesitation.

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I remember negotiating a partnership with a large local company. After days of discussions, I was eager to finalize the deal and move forward. However, my local partner kept delaying the conclusion of the agreement, which was frustrating at the time. Later, I learned this was a sign of respect, as they wanted to ensure that all angles had been considered. They were also giving me time to reflect on my own position. In retrospect, had I pushed for a quicker resolution, it could have harmed the relationship. Patience became a crucial asset in these negotiations, and eventually, the deal was not only successful but laid the foundation for future collaborations.

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?3. Navigating China’s Bureaucracy

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Navigating China's complex bureaucracy can be daunting, especially for foreign businesses. From securing licenses to understanding local regulations, it can feel like an overwhelming process. However, building relationships with local government officials and staying informed about the latest policies can smooth this path.

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When I set up a new project in a second-tier city, I faced several regulatory hurdles that I hadn’t encountered in more developed regions like Beijing or Shanghai. It wasn’t until I took the time to meet with local officials, attend government-hosted forums, and engage with community leaders that things began to move. My local connections helped me understand how certain policies were implemented at the municipal level, and they even facilitated introductions to key decision-makers. Without these relationships, it would have taken far longer to get my project off the ground.

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?4. Localize Your Business Model

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Localization is often misunderstood by foreign companies. It’s not enough to simply translate your product into Chinese or set up a local office; you need to adapt your entire business approach to meet the unique needs of the market.

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One example from my experience is a product launch that didn’t perform as well as expected in China, despite strong sales in other regions. After conducting market research, we discovered that while the product was well-received globally, Chinese consumers had different preferences regarding the product’s design and features. We adjusted the offering, incorporating feedback from Chinese consumers, and saw a dramatic improvement in sales. Localizing the marketing strategy by leveraging platforms like WeChat and focusing on word-of-mouth recommendations also made a significant difference in brand visibility.

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This taught me the importance of continuously listening to local markets. Products that work elsewhere may need to be reshaped to resonate with Chinese consumers, who are often more tech-savvy and value conscious.

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?5. Stay Agile in a Rapidly Changing Market

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China’s economy evolves at an extraordinary pace, and businesses need to stay agile to keep up with these changes. From the rise of e-commerce to government-driven shifts in policy, adaptability is key to long-term success.

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I’ve seen companies enter the market with a strong initial strategy, only to fail because they couldn’t adapt to China’s rapidly shifting landscape. One personal example was the rise of mobile payments. A few years ago, I was working with a company that insisted on using traditional payment methods, which were still prevalent in their home market. In China, however, the rapid adoption of WeChat Pay and Alipay transformed consumer expectations. We had to completely rethink our payment structure and digital presence to keep up with the shift toward mobile-first transactions.

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This agility has also applied to partnerships. As China continues to emphasize self-reliance and innovation, I’ve found that aligning with local tech firms or engaging with government initiatives such as “Made in China 2025” can offer invaluable strategic advantages.

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?6. Leverage Local Partnerships

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Success in China often comes down to finding the right local partner. Whether it’s a distributor, a joint venture, or a strategic alliance, these partnerships provide insight into market nuances and help overcome cultural and regulatory challenges.

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Early on in my career, I worked with a local distributor who not only had strong connections in the industry but also a deep understanding of regional markets. His knowledge of local tastes and preferences helped me adjust my strategy to target specific provinces where demand for our product was strongest. Over time, this partnership evolved into a mutually beneficial relationship that expanded into other regions. Without this local expertise, it would have taken much longer to penetrate these markets effectively.

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?7. Embrace China’s Digital Ecosystem

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China’s digital landscape is unique and highly advanced, with platforms like WeChat, Alibaba, and Douyin (TikTok) playing central roles in both business and everyday life. Companies that want to succeed here must not only understand but also actively participate in this ecosystem.

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When I first arrived in China, I was struck by how rapidly e-commerce and mobile technology were transforming consumer behavior. Today, leveraging platforms like WeChat is non-negotiable. In one project, we integrated our entire customer service, marketing, and sales operations through WeChat, which dramatically improved customer engagement. This approach provided direct access to our consumers, allowing us to build loyalty through personalized experiences and real-time interactions.

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I’ve also embraced influencer marketing (KOLs), which has become a game-changer for brands looking to connect with young Chinese consumers. Partnering with a local influencer helped us drive sales for a product that had struggled to gain traction through traditional marketing channels.

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A Land of Opportunity with Unique Challenges

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China remains one of the most attractive markets globally, but success here requires a deep understanding of its complexities. After living and working in China for 22 years, I’ve learned that there’s no one-size-fits-all approach. Instead, success hinges on patience, cultural sensitivity, adaptability, and building long-term relationships.

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From cultivating guanxi and localizing business models to embracing the country’s digital revolution, these lessons are critical for anyone looking to do business in China. The market is constantly evolving, but for those willing to invest time and effort into understanding the landscape, the opportunities are vast.

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From Shanghai

Alexander Glos

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