If you are planning on establishing local presence in China, the city of Guangzhou may be a good starting point. For many reasons, doing business in Guangzhou is a great alternative to Beijing and Shanghai, says Nathan Jansen of business consultancy firm Beijing 1421, that has just expanded its operation to this city. Jansen, who is managing the new 1421 location in Guangzhou, is enthusiastic about its potential for business.
Nathan has just set up office in Guangzhou’s well-known Garden Hotel. He is quite ready to promote 1421 and its one-stop solution for SMEs in China, as he answers Club China’s questions.
What makes this city a great place for business?
“Guangzhou is one of the lesser known tier 1 cities in China. Everyone knows Shanghai and Beijing. But once we remember this region is what we used to call Canton, everyone realizes they know it. Especially if you realize that most probably in everybody's vicinity there is a product that was manufactured in this region, with Guangzhou as the big hub. Besides, China and Hong Kong are transforming this whole area into the Greater Pearl River Delta. This means there will be multiple cities (Guangzhou, Shenzhen, Hong Kong and Macau are the biggest ones) linked within a small radius where a multitude of industries can flourish.”
You specialise in supporting organisations set up their business in China. What should small and medium-size enterprises – SMEs – know about this region of China?
“SMEs in this region normally come here either for manufacturing or trading. Because these industries have been here for so many years, they attract like-wise industries. However the government has created three different Special Economic Zones, just like in Shanghai, to encourage these industries to grow. European industries that could benefit from coming to the Pearl River Delta's incentives are: creative, water, logistics, energy, High-tech Systems & Materials and Life Science & Health.”
What are the things that SMEs may want you to assist in?
“As the SMEs that come to this region often are companies that see their production could be a lot cheaper when done in China, we can assist these clients with a market feasibility study. With this we will check exactly how, what and where is the best way to enter the Chinese market for them. After this we help with registration, our office concept, payroll servicing, legal advice, accounting services and overall advice on doing business with Chinese. In short - everything they need in the first year(s). For local prices, because people often come to China to save on costs.”
“The other big group that comes to Guangzhou are traders. We often get questions regarding sourcing. ‘Can you find us this product we wish to import?’ We offer this service as well, but our great added value comes from the fact that we offer quality control services. This is an all-important benefit to our clients, that obviously want their products to be working when the shipment arrives. For many of our clients this was what saved them money in situations where Chinese manufacturers tried to save material costs.”