How to attract private Chinese investors?
Are you a government official working on attracting FDI? Or a company seeking to raise extra capital? Are you looking for new business opportunities in bringing private Chinese companies over to your country? Read more about what attracts Chinese investors here.
Stability and predictability.
Chinese investors are no different from the others in their quest for stable and predictable business environment. While the geopolitical initiatives like the Belt and Road act as an incentive from the Chinese government toward state-owned enterprises to consider investments with higher risks, when it comes to private investors they still make a rational choice by weighing in the risk and the return. Political turmoil, macroeconomic instability, frequently changing laws and policies deter private investors and are to be avoided.
Government support and incentives.
A survey conducted in 2019 asked Chinese investors to choose what matters most to them among 10 offered options and they all selected Government support and incentives (100%). Likewise, when asked what the main obstacle is for Chinese investors, their choice of preference is Lack of government support and incentives (88%). So, dedicated teams to cater to the investors’ needs, free zones, fiscal incentives, support to the construction of plants and setting up of companies, as well as a favourable environment for doing business is something that can “make or break” the plans of Chinese investors to settle in your country.
Familiarity and trust.
Chinese investors tend to choose destinations and settings that they are familiar and comfortable with. It is not likely that they will make a swift decision to invest in a country, brand or company that they do not know well. Instead, they will first seek to acquaint themselves, then to establish trust and finally consider investing. So, bearing in mind that many of the Western media and social networks are unavailable in China, using Chinese trustworthy channels for communication, promotional activities and advertising is always a good idea (CCTV, WeChat, Weibo, Youku, QQ etc.). Moreover, be present at events where it is likely to meet the companies directly and establish more personalized contacts.
Capacity, professionalism and integrity of your team.
In the words of one of our Chinese clients “Good policies can be easily blocked in practice by a lazy bureaucrat or a corrupt one”. If you want to attract and maintain Chinese investments, you should make sure that you hire the right people to work with you. If you work in government, make sure that you establish a competent team and a solid management system. Ensure that possible miscommunication and misunderstanding do not occur because of intercultural barriers by employing people who understand Chinese business culture. Finally, do not underestimate the importance of the language. Having Chinese-speaking people onboard can often be your greatest asset.