The key to a smooth China market entry
The Chinese market is in a constant state of evolution, as new policies and regulations are swiftly introduced, technology adoption continues to rise, and even employee management becomes more complex. Despite these shifting trends, it remains undeniable that China constitutes a vital growth opportunity for companies seeking to expand their global footprint.
So how can companies fulfill market potential amidst China’s dynamics and overwhelming regulatory environment? By outsourcing business services in China. In fact, this is the ultimate solution for small and medium companies (SMEs) that want to enter the Chinese market or wish to grow their market share in China.
Why do companies outsource back-office functions in China?
Back-office outsourcing is the most responsible and transparent way of doing business in China, considering the distinct disparities that characterize the Chinese market compared to other “easier-to-navigate” markets.
To put it differently, the Chinese market presents a unique landscape that differs significantly from any other business environment you might have encountered. This distinctiveness is evident in its vast size and diversity, intricate regulatory demands, rapid transformation rate, business relationships, let alone language, and cultural disparities.
These knowledge gaps make the Chinese market exceptionally challenging. Steering into it successfully requires a balanced approach, which allows delegating responsibilities while retaining crucial decision-making power.
Outsourcing back-office functions meet this need exactly. The more business functions outsourced, the leaner and more productive an operation can be. An external market-specialist service provider will be able to:
- Execute operational on-the-ground tasks while you focus your efforts on business development
- Give access to ready-made infrastructures to achieve business efficiency from day one
- Utilize local knowledge to optimize processes
- Facilitate independence in decision making
Let’s take a look at how these benefits are reflected in four key areas of the day-to-day business operation.
Outsourcing Payroll management in China
Hiring local employees is perhaps the first task that foreign companies doing business in China get to. Your China staff is crucial and is the driving force of your business activity. Therefore, especially due to the complexity of the recruitment process, it’s better to avoid unnecessary mistakes and keep your employees satisfied.
Relying on a professional and well-informed payroll service provider will save you troubles which are almost inevitable due to language, business culture and work practices gaps. By utilizing China payroll outsourcing services, you can be certain that your staff is being taken care of as required by law.
In addition, keeping up-to-date with local employment laws can save you money. For example, in the second half of 2019, some labor laws were updated for the benefit of employers, such as a 4% reduction in pension provisions. Hence, leveraging the service provider’s local knowledge will also be in the best of your interests.
Hiring employees in China? Read more on understanding the complexities of China’s labor laws
Outsourcing HR Services in China
A company’s human capital is its most valuable asset. Therefore, effective and ongoing workforce management is a task of major importance. Outsourcing HR services in China could be the key to tackling this task successfully.
Turnover rates in China are high. The Chinese job-seekers market is highly competitive and candidate filtering requires a high level of expertise. Senior management often does not have the luxury of time to go through the intricate recruitment process. This is where local recruitment agencies and Employers of Record in China become useful. These agencies will do the job better and faster.
Moreover, given the inclination of employees towards remote work, which often leads to reduced oversight, along with their increasing expectations for enhanced working conditions, the overall task of employee management has become notably complex. In such a reality, a local on-the-ground HR team is the sole function in the company that can ensure synchronization with labor market trends and guarantee the fulfillment of employees’ requirements.
Outsourcing manufacturing in China
Any business that enters the Chinese market seeks to develop a local following and increase sales. The benefits of outsourcing manufacturing to China are mainly reflected in shortening and lowering procedures costs; Proximity to the target customers; And enjoying the status of manufacturing “made in China” produce.
Manufacturing procedures in China require both compliance with technical regulations and time and financial resources. Outsourcing manufacturing in China handles all these factors, regardless of what your manufacturing needs are:
- Contract manufacturing in China is the leanest outsourcing manufacturing model, where the service provider takes care of some or all manufacturing aspects (e.g., initial assessment, components procurement, product assembly, QC, and shipping).
- The Industrial Incubator in China is a quick and cost-effective solution, enabling companies to establish a small-scale assembly line in existing production and assembly facilities. The incubator is also known for its access to on-site managerial support services.
- Factory set up in China takes your manufacturing another step forward. A local service provider can carry out the lengthy operation, starting from site selection, to government negotiations, construction supervision, equipment purchasing, and employee recruitment & training.
Our services assist international companies in the Chinese market. Contact us
Outsourcing financial services in China
International companies who operate in China rely on China’s massive consumption power. But companies in the China market entry phase occasionally encounter difficulties when transactions with local currency are in place. Some Chinese clients are reluctant to use foreign currency, and other are not even permitted to do so. On such occasions, a local third party is able to collect payments on behalf of the foreign company and issue an invoice.
The same goes for accounting services in China. Accounting in China is different than international accounting standards, and also poses challenges of discrepancies. An experienced service provider can save foreign CFOs countless headaches, by synchronizing between HQ and local subsidiary systems in an understandable and manageable manner.
Read more about financial management in China in our Financial Regulations Guide
The bottom line: outsourcing is a strategy
Outsourcing in China is not just a local solution to a specific need. It’s also a strategy.
PTL Group allows its clients to outsource multi-disciplinary business services in order to turn a bunch of unfamiliar business practices into a stable and well-functioning operation. This is achieved by operating in two parallel directions: On the one hand, this approach zooms-in into each business function and department in your company. On the other hand, you never lose grasp of the overall picture and make sure all functions are being coordinated to work together to achieve your goals.
Our services respond to a wide range of needs, including HR and employment services in China, financial services in China, outsourced services for supply chain operations, payroll management in China, and much more.
The benefits of outsourcing to China can take your business to the next level. Get in touch today and start empowering your China operation.