South Africa may think it is doing well in the Chinese market, but in reality it is still a relatively unknown economic player in the East.
While the Chinese have become more aware of South Africa in the past 10 years, they are still not clear about the country’s potential as a leading economy in Africa.
There is a lot more that South African companies can do to raise their profile in the region. Because they have been successful in African markets, the country is increasingly seen as a gateway for China into the continent.
A wonderful opportunity exists for synergy between the two countries, and this is supported by the fact that there are a number of similarities in the way they do business.
These include the fact that South African organisations are multicultural. This creates a strong problem-solving capability. Also, the cultural orientation of South Africans is in many ways similar to that of Chinese people. Both are concerned about maintaining good relationships during exchanges. Furthermore, both countries place emphasis on the upliftment of their people in general.
This is a good start, but for these partnerships to take root, formal business channels are needed. A promising development is the establishment of the China-Africa Business Forum, which will be launched in December at the University of Cape Town Graduate School of Business.
Many Chinese companies want to penetrate the market in the West and other regions, but experience difficulties owing to high barriers. Many foreign companies want to take advantage of the growing market in China, but should also be prepared to give access to their own markets.
If there is not consensus in terms of market access, foreign companies may soon find themselves out in the cold in China. When Chinese people get a feeling of being treated unfairly they simply do not respond to offers. Many Western people do not know how to interpret this uncooperative behaviour.
Also, many of our business people have a perception that the risk of doing business in South Africa is too high. With communication between the two countries this will change.
China is going through several phases of modernisation with a newly emerged free market. The transition of rule by man to rule by law is also under way. These changes dictate an environment that is different from the environment elsewhere.
It is vital to have an intermediary to help to cut through the bureaucracy of doing business in China. Be flexible and understand that China has its own norms and values.
Last year foreign direct investment into China topped $55-billion. There are many opportunities for investment in there — the challenge is how to identify them before your competitor does.
Wei Huang is the co-founder of Trihelix BV, which facilitates business deals between Europe and China
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