A solid business plan and clear vision is the key to launching your business in China - this was the key message that came out of a talk titled "A Roadmap for Spain-China Investments."
The event presented some findings and recommendations of the just-published report New China-Spain Horizon. It was led by Dr. Xi Feng, senior vice president of the Horizon Research & Consultancy Group; Xiabo Wu, dean of SOM of Zhejiang University; and IESE Prof. Pedro Nueno, president of CEIBS. During the event, held at the IESE Barcelona campus on June 5, they discussed obstacles relating to Spain-China trade relations and ways to go forward.
Each speaker agreed that a lack cultural awareness between the two countries has historically hindered business opportunities. "Why are we here so late?" posed Feng. "Because of a lack of understanding. So let’s promote understanding."
Both he and Wu emphasized that tourism is the key to "opening up" China, adding that the Chinese travel for a multitude of reasons, including seeking out education options for their families and real estate investment opportunities.
"CEOs need to visit China and promote the Spanish brand as a whole," added Feng. "The national brand needs to be promoted."
Nueno also emphasized the human factor. "You can’t maintain enthusiasm on the internet," he stressed. "Business today is still a human phenomenon."
The New China-Spain Horizon Report was elaborated by teams in both Spain and China. It focused on five industries that were pinpointed as having the most potential for cross-country investment: automobiles, agrifood, real estate, tourism and fashion and luxury goods. According to the research, strong opportunities are available in all sectors. In the case of agrifood, the panel discussed the food safety crisis that is sweeping China and the widespread concern for the quality and safety of local food products. "The demand for imported food is growing," said Feng. "And few people know about the superb quality of fresh produce from Spain." Spanish craftsmanship and its arts and crafts heritage should also be exploited. "In general brand awareness is high, but not of brands from Spain. That said, there is a decline in the consumption of luxury goods. People are not looking for ‘luxe’ as such, but items of the highest quality."
In term of real estate, the report welcomes the new policy from the Spanish Government that provides incentives for foreign real estate investors, and points out the recent tougher measures imposed by the Chinese Government is order to curb real estate speculation, meaning that local investors are looking beyond their borders. Again, the expansion of tourism would have knock-on benefit, as Chinese travellers who experience the lifestyle benefits Spain has to offer would lead them to consider the country for residential tourism.
One of the overriding messages of the talk was that the time is right for cross-country investment. "China is entering a new era both economically and politically," said Wu. "We are going to see a dynamic change, from the bottom up. It will be an investment-driven economy, with better infrastructure."
He emphasized the demands of the growing middle class, and a changing consumer mindset that was starting to perceive goods and services, in a more "European" way and beyond their "physical" value. He also stressed the attitude of President Xi Jinping in regards to international expansion. "He wants China to be ethical and international. From now on we will see an accelerated ‘opening up’ of China."
The Q&A was taken up with questions regarding the strategies Spanish businesses should employ when looking to set up business in China. The importance of quality market research, professional intermediaries, active chambers of commerce and dynamic networking were stressed. But the overall message was that bridging the cultural divide should not be neglected. "Be prepared to take a call from your Chinese business partner on a Saturday or Sunday," joked Feng. " We never stop working."