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As companies continue to leverage growing markets around the world to meet business and consumer demands, China has emerged as a prime destination. At present, the nation is the largest contributor to global growth, and will be for some time, offering almost unlimited opportunities for organizations to expand their business. Indeed, its emergence in the global economy, and the opportunity it presents, are why China is often among the top places for the expanding multi-national organization to establish operations, especially for those companies based in the U.S. and Western Europe.The ongoing trend of continued investment in China is exemplified by Apple and its recent significant investment to ensure it has a strong market share and competitive advantage. And as more organizations strive to do the same, it is clear that investment in the growing Chinese market is a must for today’s leading companies. But in the rush to set up operations and leverage the skills and know-how of China’s workforce, a keen understanding of the business landscape, regulatory environment and other areas is necessary for return on investment in the region.
One of the most important factors when operating China is the need to comply with the numerous and often challenging legal concerns. As a top location for international investment, the country has a complex framework of regulations designating how employees are compensated. What makes it even more complicated is that the various deductions for insurance and social security vary from region to region and even city to city, making it more crucial that organizations gain an in-depth understanding of all of the requirements when conducting payroll in China, particularly those organizations looking to operate within multiple regions in the country. A one-size-fits-all approach simply won’t work in China.
The other major challenge for multinationals expanding to China are the many – and significant – cultural differences. Aside from the big ones, like language barriers, employers will find a workforce with a different mentality from what they encounter in North America or Europe. The work culture in China centers on deference and never saying no, as well as not being critical of oneself, their colleagues or their customers. Moreover, many individuals feel more comfortable being part of the group instead of standing up on their own or being singled out.
These are real challenges that organizations face when leveraging the Chinese workforce to grow their business and achieve their company objectives. They also highlight the need for the processes and tools that can facilitate the management of these workers. That’s why CloudPay strives to be culturally sensitive to the unique needs of China, and every country for which we handle payroll. As compensation is deeply personal for every employee, the way in which it is accounted for and delivered must be personalized as well.
As China continues to be a top destination for the expanding multi-national, it is important that they not lose sight of the trends and nuances that can impact their success. And as more companies strive for market share in this growing market, the wrong move can result in enormous fines or damage the company’s consumer and employer brand. Working with a partner like CloudPay, with the local expertise in the local market, can help any company achieve success when expanding to China.
