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Ways to Enter the Chinese Market- Update 2020

By eusme | Report      04.04.2020     Tags:

“Ways to enter the Chinese market” focuses on the different options open to European SMEs considering to enter the Chinese market. 

It spans the whole spectrum of possibilities: From indirect modes of entry like licensing, franchising and online selling to exporting with or without the help of local partners and investment in the form of representative offices, partnerships, joint ventures and wholly foreign-owned enterprises, every approach has its advantages depending on the goals and specific circumstances of individual companies. 

This report aims to introduce them all and give pointers as to which strategy is most suitable for your business.

In the report, you will learn:

1. Preliminary remarks

  • Compliance
  • Protection of your intellectual property rights
  • Foreign exchange control
  • China, Hong Kong, and Pilot Free Trade Zones

2. Broad methods of market entry

3. Exporting

  • Indirect exporting (using an intermediary)
  • Direct exporting

4. Licensing and franchising

  • Licensing
  • Franchising

5. Selling online

  • Standalone websites
  • E-commerce platforms

6. Directly investing - Wholly foreign-owned enterprises and joint ventures

  • Wholly foreign-owned enterprises (“WFOEs”)
  • Joint ventures (“JVs”)
  • Activities
  • Capital structure
  • Foreign exchange control on current and capital accounts
  • Approval process

7. Direct investment – partnerships

  • Authorised activities
  • Capital
  • Approval process

8. Branches

  • Approval process

9. Representative offices (“ROs”)

  • Approval process

10. Pilot Free Trade Zones (“PFTZs”)

  • Locations and features of each PFTZ
  • The features and benefits of PFTZs
  • Recommendations

11. Using Hong Kong as an entry point to mainland China

  • Supervision from mainland China
  • Two special areas and one agreement for Hong Kong as a channel to mainland China
  • China and Hong Kong’s Closer Economic Partnership Arrangement (“CEPA”)
  • Setting up in Hong Kong

12. Recommendations regarding the best way to enter the Chinese market



The EU SME Centre Phase II officially runs out on April 6, 2020. Publications remain available for downloading for EU SME users of the website. For further queries on the reports, you are recommended to contact the authors directly or email at info@eusmecentre.org.cn.

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