Category: Expertise

Building a Franco-Chinese team: Tips for successful integration

Building a Franco-Chinese team: Tips for successful integration

Integrating foreign employees into Chinese teams is essential to the effective deployment of business in China, whether they are based locally or working remotely. This is not only crucial to the success of the business, but also an enriching opportunity for the company’s managers. By understanding and respecting local cultural specificities, companies can not only facilitate the building of strong Franco-Chinese teams, but also develop strong cohesion within the team, which will prove to be a decisive factor in productivity.

In this article, we’ll explore practical tips and tried-and-tested strategies to help your foreign employees integrate more easily into everyday life in China. From understanding fundamental cultural values to adapting communication and management styles, every aspect will be covered. The aim is simple: to turn the challenges of integration into opportunities for growth and successful collaboration.

Understanding Chinese working culture

Integrating into a Chinese team requires a thorough understanding of local cultural values and practices. In China, the working culture is shaped by traditions and norms that may seem very different from those in Western countries. Understanding these cultural differences and respecting them on a daily basis is key to successful integration. In this section, we will look at three key aspects of Chinese work culture: hierarchy and respect for elders, the values of collectivism and harmony, and indirect communication styles.

The importance of hierarchy and respect for elders

The Chinese work culture is deeply rooted in traditional values that emphasise hierarchy and respect for elders. Unlike Western cultures, where equality and horizontal collaboration are often valued, the Chinese context favours a clear hierarchical structure. Decisions are generally taken by superiors, and subordinates are expected to follow these directives.

Key values: teamwork, harmony and respect

Teamwork is another cornerstone of Chinese work culture. Unlike Western individualism, success is often seen as a collective effort. The well-being of the team and the company takes precedence over individual interests. This translates into a strong emphasis on collaboration and harmony within the team. Maintaining good relations with colleagues and avoiding direct confrontation are highly valued behaviours.

Differences in communication styles: indirect vs. direct

Communication in China is often more indirect than in Western cultures. Within the company, employees tend to avoid direct confrontation and prefer to use more subtle means to express their opinions or disagreements. For example, the translation of the word “yes” can lead to misunderstandings if it is misinterpreted. In China, it is sometimes used to mean “I understand” rather than “I agree”. This nuance in communication can create misunderstandings if it is not properly understood.

Strategies for successful integration

Here are some tried and tested strategies and innovative approaches that take into account cultural specificities to simplify the integration of foreign employees into a Chinese team and strengthen cohesion within the company.

Intercultural training and cultural awareness

Cross-cultural training is essential to help foreign employees understand and adapt to Chinese cultural norms. This training should cover aspects such as work habits, social protocols and communication expectations.

Innovative approach: Immersive workshops and virtual exchanges

Organise immersive workshops that simulate typical Chinese work situations and social interactions. In addition, anticipate your employee’s arrival by encouraging upstream exchanges with their Chinese colleagues. To do this, you can offer time for discussion during which the future employee can ask questions and where everyone can share their experiences and work practices.

Mentoring and incubation by Chinese employees

Mentoring is an effective way of helping foreign employees adapt more quickly. By assigning a Chinese mentor to each new arrival, you create a supportive relationship that makes it easier to learn cultural and professional nuances.

Reverse mentoring programme

As mentioned earlier, reverse mentoring can also be beneficial. In this model, young Chinese employees mentor foreign managers, bringing a fresh perspective and reversing traditional roles. This encourages a mutual exchange of knowledge and skills, promoting greater cultural understanding on both sides.

Incubation: supporting your employee step by step

In addition to freelance administration, some companies specialising in HR offer an incubation service. At VVR International, we can carry your employee: in this case, we take charge of his or her legal and administrative management. To help them get up and running quickly, our teams welcome them and support them as they set up in China. With the possibility of working on our premises, they will have local contacts, training and a workspace that will enable them to quickly take charge of their new role within your company.

Organising social activities to strengthen ties

Social activities are crucial to strengthening relationships between employees and creating a sense of camaraderie and trust. Regular events allow employees to get to know each other outside the workplace.

Innovative approach : Intercultural team-building events

To take this a step further, team-building events dedicated to intercultural issues in the workplace can help to highlight cultural differences and raise your employees’ awareness of their implications for their day-to-day work, while at the same time strengthening links between teams. For example, cooking workshops in which employees prepare traditional Chinese and Western dishes together, or cultural excursions to explore the local culture can be interesting team-building activities to strengthen the bonds between French and Chinese employees.

Overcoming common challenges

Even with well-planned integration strategies, companies can encounter difficulties when integrating foreign employees into Chinese teams. To avoid these pitfalls, a good knowledge of the points to watch out for can help to achieve a successful and lasting integration.

Managing language differences and misunderstandings

Language barriers can often lead to misunderstandings and frustration. Although many professionals in China speak English, it is essential to recognise the nuances and challenges of multilingual communication.

Technological tools and language training

Technological tools such as real-time translation applications and multilingual communication platforms are invaluable in making day-to-day exchanges more fluid. To take things a step further, language courses tailored to the needs of your foreign employees can be a worthwhile investment in improving the skills of your staff. These courses will focus on terms specific to your sector and expressions commonly used in the workplace. Today, there is a wide range of language learning software with virtual reality functions available, which can be an interesting alternative to traditional language courses. This makes learning more flexible and less expensive.

Adapting management styles to bring them into line with Chinese expectations

Western management styles can sometimes be perceived as too direct or individualistic in China. Adapting these styles so that they are more in tune with local cultural expectations is crucial to effective management.

Innovative approach : Intercultural leadership workshops

An inclusive work environment is essential for employee satisfaction and productivity. This means respecting cultural differences and promoting an atmosphere of respect and collaboration.

Organise cross-cultural leadership workshops where foreign managers can learn to adapt their management style to suit Chinese expectations. These workshops can include role-playing, case studies and group discussions on best management practices in a cross-cultural context. Integrate e-learning platforms to offer continuous training modules and resources that can be accessed at any time.

Conclusion: successful integration is a worthwhile investment

Integrating foreign employees into Chinese teams is essential for success in China. By understanding the working culture, adopting innovative integration strategies and overcoming common challenges, companies can create a harmonious and productive working environment. Successful integration has a direct impact on a company’s overall performance.

VVR International and its HR department can help you create or strengthen your teams in China. Thanks to our teams and our coaching and portage services, we can take charge of your employee and support him or her in settling in and integrating, both culturally and legally and administratively. With VVR International, you benefit from local expertise and personalised support to ensure the successful recruitment and integration of your employees in China.

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Recruiting in China and Europe: key differences and tips for adapting

Recruiting in China and Europe: key differences and tips for adapting

Recruitment is a key success factor for companies. It is no longer enough just to find talent, you also need to be able to attract and retain it. The aim of this article is to compare the recruitment processes in China and Europe in order to identify the major differences and suggest ways in which European companies wishing to succeed in the Chinese market can adapt. By understanding these nuances, companies will be able to refine their recruitment strategies and maximise their chances of success.

The recruitment process in Europe

Recruitment in Europe reflects a certain corporate culture and managerial practices influenced by economic, social and cultural factors. Traditionally, European companies focus on academic qualifications and professional experience. The most common recruitment methods include advertising on job boards, recruitment agencies and job fairs.

Candidates are generally selected through a number of rigorous stages:

  • CV sorting,
  • Telephone interviews,
  • Face-to-face interviews,
  • Sometimes technical or psychological tests.

Qualifications and experience play a key role in the selection process. In addition, interpersonal skills and the ability to work in a team are increasingly valued criteria.

Finally, compliance with local regulations, such as anti-discrimination laws and personal data protection standards, is essential to ensure a transparent and fair recruitment process. European companies are also investing in diversity and inclusion programmes to attract a wider range of talent.

The recruitment process in China

The recruitment process in China is strongly influenced by specific cultural and historical aspects. Unlike in Europe, where academic qualifications and experience are paramount, in China personal networks (or ‘guanxi’) and recommendations play a key role in recruitment. Guanxi’ refers to the importance of personal relationships and connections, which can often play a key role in securing a job.

Recruitment methods in China include popular online platforms such as Zhaopin and 51job, and even social networks such as WeChat. Companies often use job fairs and partnerships with universities to attract young talent. The market for skilled jobs is dynamic and highly competitive, requiring both companies and candidates to be highly responsive. It should be noted that chasing competitors is a widespread practice, even for less skilled positions.

Companies are competing to attract the best talent. To do this, they adapt their job offers to the expectations of candidates, highlighting the stability of the job, the friendly management and the company’s reputation in China and internationally. They do not hesitate to highlight the opportunities for development within the company and the possibility of training.  Finally, companies must also take account of regional and sectoral differences to adapt their recruitment strategies.

Recruitment: what do they have in common?

In China, as in Europe, the importance of employer branding and personal development opportunities is growing. Companies need to focus on creating an attractive working environment and offering compelling value propositions to attract the best talent.

For European companies wishing to succeed in China, it is essential to adapt to these cultural specificities. Building strong relationships, understanding the importance of ‘guanxi’, and adapting local recruitment methods are key strategies. Investing in local market knowledge and working with local experts can also greatly facilitate the process.

Conclusion: Summary and recommendations for success in China

To recruit successfully in China, it is essential to understand the cultural and structural differences with Europe. In Europe, the emphasis is on academic qualifications and professional experience. In China, personal relationships, known as “guanxi”, and recommendations are crucial. To optimise recruitment in China, it is important to establish and maintain solid personal networks. It is advisable to use local recruitment platforms and Chinese professional social networks. To maximise your chances of success, to build or strengthen your local team and thus ensure the success of your development, it is advisable to call on the services of a specialist local company such as VVR International.

VVR RH by VVR International

VVR International has a dedicated Human Resources department. Our team of experts will advise and support you at every stage of the recruitment process to ensure that you find the ideal profile. Once selected, VVR International, via its freelance administration service, can manage your employee administratively and legally. You don’t even need to have a legal entity in China!

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China opens opportunities for foreign-owned hospital operations: What foreign healthcare companies should know

China opens opportunities for foreign-owned hospital operations: What foreign healthcare companies should know

Foreign-owned companies can now direct clinical operations and open 100% foreign owned hospitals in some Chinese cities. On September 7th 2024, China’s Ministry of Commerce, National Health Commission and the National Medical Products Administration announced the opening up the medical sector and, in particular, medical innovation to international players. As of this date, foreign-owned companies are now allowed to:

  • Direct clinical operation of gene and cell therapies, as well as genetic diagnostics, for regulatory registration purposes (NMPA), in the special economic zones of the three major coastal cities (Beijing, Shanghai, Guangzhou) and on the island of Hainan;
  • The opening of 100% foreign-owned international hospitals (excluding traditional Chinese medicine and the acquisition of a public hospital) in Beijing, Tianjin, Shanghai, Nanjing, Fuzhou, Suzhou, Guangzhou, Shenzhen and Hainan Island.

What do these policy changes mean for foreign healthcare companies in China?

In a way, this announcement resonates as a counterpoint to VBP (Volume Based Procurement), deployed in 2020, a policy aiming to achieve a lower price of medical care through high-volume procurement, whose intentions, while logical and laudable in macro-economic terms, demonstrated during the system’s implementation that is sometimes counter-productive on the innovation front. Indeed, in many cases, the economic equation for innovative products on the Chinese market can prove untenable for foreign innovators, with purchasers preferring so-called “museum” products in the VBP context.

This announcement therefore illustrates the Chinese government’s recognition of this situation, and its ongoing determination to attract innovation in health products and services, under economic conditions that are once again attractive to international healthcare innovators.

In concrete terms, after the major efforts made in the post-Covid period to digitalize the patient pathway (to an extent already ahead of many Western countries), the aim is to continue to drive the ongoing progress of the entire medical industry:

  • In terms of healthcare provision, the procedures for purchasing from public hospitals and validating the level of reimbursement by the Chinese social security system often delay the deployment of new therapeutic and diagnostic approaches by several months or even years.
  • In hospital management, to avoid the wasteful practices that still exist at various levels of hospital administration.
  • In terms of patient satisfaction, as the measured levels of satisfaction with public hospitals in China still leave much to be desired.

Moreover, as is customary with the Chinese government, the decision is multifactorial. Thus, the positive consequences of this announcement for the country, its population, and the general environment of the healthcare industry are numerous.

How the opening of China’s medical industry benefits patients

  1. Mobilize savings from the middle and upper classes towards the real economy, at around 45% in 2021, China’s savings rate significantly surpasses the global average savings rate of 26.5%. China bets here that wealthy Chinese will allocate an ever-increasing share of their family budget to healthcare, as can already be seen in existing international hospitals, where Chinese patients are by far in the majority compared to foreign patients – which was not the case just ten years ago.
  2. Accelerate the growth of the private medical insurance sector, in terms of both volume and actuarial skills, in order to continue to control public health spending and develop a whole area of financial services that is currently immature compared to the major Western countries. Notably, the situation in this field has already been improving for several years, thanks in part to innovative public-private partnerships.

China’s healthcare professionals benefit from the entry of foreign-owned healthcare

  1. Providing new career opportunities for the strictly “medical” staff of the public hospital, private hospitals in China are known and recognized for paying better salaries and offering better working conditions.
  2. Continue the process of specializing public hospitals in translational and clinical research (many large public hospitals are affiliated to a university with a medical curriculum), by increasing funding for physician-researchers and multiplying the number of world-class clinical trial centers – a trend already underway since 2018.
  3. The aim is to create an incentive for young Chinese to enter the medical and medical-scientific professions, by restoring the attractiveness they have lost in recent years due to the imbalance between pay and workload and the “glass ceiling” that has been reached too quickly.

How China’s healthcare opening boosts innovation

  1. Promote medical innovation, by facilitating the rapid market entry of innovative drugs and medical/diagnostic devices via private hospitals: these are not subject to the strict rules of public tenders (VBP or others), and therefore purchase their healthcare products at more or less “international” prices. With the combined population of the above-mentioned cities and their immediate surroundings exceeding 150 million, there is little doubt that such a market will prove profitable;
  2. Encourage the emergence of specialized medical distributors in the private hospital channel: as this type of distributor is still relatively rare, it is highly likely that new, high-caliber players will emerge in the next few years. This will enable innovative healthcare products to penetrate the Chinese market via multiple channels, with accelerated profits from the “private” channel supporting gradual entry into the “public” channel.

What is the next step for foreign health and medical tech companies to enter China?

In the ever-changing context of China’s human health and medical technology industry, it is essential for innovative health companies to obtain information and data from sources that are in direct contact with the country’s real developments and therefore understand the nuances of the market. We equip human health and med tech companies with clear, substantiated recommendations, backed up by a realistic, costed action plan.

VVR Medical/Daxue Consulting, leaders in strategic and operational support for companies in the medical sector on the Chinese market. Don’t hesitate to reach out to sustain your healthcare company’s presence in China. We look forward to hearing from you!

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Cosmetics regulations in China: What foreign brands need to know

Cosmetics regulations in China: What foreign brands need to know

The Chinese cosmetics market has become a major global player, attracting many foreign brands. However, setting up a successful business in China requires a thorough understanding of the strict regulations that govern the sector. This article examines the key regulations concerning cosmetics ingredients in China, their importation, marketing and commercialisation, with a particular focus on the implications for foreign brands.

The new CSAR regulations

On 1 January 2021, China introduced a new global regulatory framework for cosmetics: the Cosmetic Supervision and Administration Regulation (CSAR). This regulation replaces the old rules dating back to 1989 and aims to improve the safety, quality and efficacy of cosmetic products on the Chinese market. The CSAR introduces an obligation to assess the safety of each product and strengthens control throughout the product life cycle. The regulation also introduces new requirements for efficacy claims and new definitions and classifications for cosmetic products and their ingredients.

Although the CSAR has officially been in force since 2021, its full implementation is being phased in gradually until 2024, with the introduction of additional implementing regulations. The list of prohibited ingredients drawn up by the National Medical Products Administration (NMPA), for example, has been regularly amended and extended since 21 March 2024 to include 5 new ingredients. At the same time, the testing protocols have been modified and will come into force in December 2024. This change introduces 11 new test methods and revises 3 already in use.

From 1 May 2024, all cosmetic products marketed in China will have to undergo a full safety assessment, replacing the simplified version currently accepted.

The inventory of cosmetic ingredients (IECIC 2021) has been updated. It lists the 8783 authorised ingredients. Safety data for all new ingredients must be submitted to the authorities. The aim of this regulatory update is to better control the quality and safety of cosmetics imported or produced in China, in a fast-growing market.

Importation of Cosmetic Products

Product registration :

Before importing cosmetic products into China, foreign brands must register their products with the National Medical Products Administration (NMPA). This process can be complex and time-consuming, requiring the submission of detailed technical files, safety tests and compliance with local standards. For example, so-called ‘special cosmetics’ (such as sun protection products, hair dyes and hair loss products) must be registered and tested, a process that can take several months.

Animal Testing Requirements :

Historically, China required animal testing for all imported cosmetics, which posed an ethical problem for many international brands. Since May 2021, so-called “ordinary” cosmetics (such as skin care products, hygiene products and make-up) can be exempted from this requirement if certain conditions are met, such as Good Manufacturing Practice (GMP) certification by the country of origin.

Marketing and Sales

Advertising regulations :

All products, whether sold on the domestic market (offline or online) or on cross-border e-commerce (CBEC), must comply with Chinese advertising laws. Claims requiring administrative approval from the Chinese government are not permitted without the corresponding certificate. For example, cosmetics advertised as being for sensitive skin or simply improving skin elasticity must undergo efficacy tests on humans or consumer tests to assess the efficacy claim.

Product Supervision Solution
Cosmetics with general claims: moisturising, anti-oxidant, etc. Less strict Regulatory restrictions can be avoided by using alternative arguments
Cosmetics with specific claims: sensitive skin, etc. Very strict supervision Sanctions will be applied if these claims are not accompanied by efficacy tests on humans or consumer tests.

 Sales channels :

  • Cross Border E-Commerce: Supervised by the General Administration of Customs of China (GACC), trademarks will be reported to the local authorities by anti-counterfeiting professionals against the illegal use of arguments.
  • Domestic market: Overseen by the State Administration for Market Regulation, advertising and designations are strictly supervised.

Ingredients and Formulation

List of Prohibited and Restricted Ingredients :

The NMPA maintains a list of prohibited and restricted ingredients in cosmetic products. Brands must ensure that their formulations comply with this list. For example, certain preservatives and colourings commonly used in other markets may be banned in China.

Certification of Ingredients :

Brands must also provide detailed information on the ingredients used in their products, including certificates of analysis and evidence of safety. New substances used in cosmetic products must be approved by the NMPA before being placed on the market.

Labelling and Packaging

Labelling requirements :

Cosmetic products sold in China must comply with strict labelling requirements. This includes the translation into Chinese of all relevant information, such as the name of the product, the list of ingredients, instructions for use and precautions. In addition, the label must include the name and address of the Chinese importer, and of the responsible body in the event of an incident.

Mandatory information :

The label must also indicate the date of manufacture and the product’s shelf life. Cosmetics intended for children or people with sensitive skin must include specific warnings. Failure to comply with labelling requirements may result in products being withdrawn from the market.

Cosmetics advertising

Cosmetics advertising in China is subject to strict rules to protect consumers from misleading information and unsubstantiated claims.

Prohibitions on advertising :

  • Falsify or exaggerate the name, manufacturing method, ingredients, effectiveness or performance of cosmetic products.
  • Using another person’s name to guarantee or mislead others as to effectiveness.
  • Communicate medical effects or use medical terminology (e.g. cosmeceuticals, prescriptions, antibacterials, sterilisation, etc.).
  • Denigrate the similar products or services of other producers or operators.
  • Using or concealing the name or image of a State body or its staff.
  • Indicate or imply that the efficacy, quality or safety of cosmetic products have been recognised by the State authorities through registration, filing, certification and other activities of State bodies.

Authorised claims :

  • Advertisements must be consistent with the content of the product registration or filing documents. For example, a product registered in China as having a whitening function cannot use the argument of sun protection.
  • The following effects are authorised in China: hair dyeing, perming, freckle whitening, sunscreen, hair loss prevention, acne elimination, moisturising, anti-wrinkle, soothing, etc. Cosmetics claiming to have additional effects or to be suitable for specific groups must provide a special registration certificate.
  • The data and quotations used in advertising must be true and accurate, and the source must be indicated.

Restrictions on Terms and Claims :

  • It is forbidden to use terms such as “national level”, “superlative”, “best”, “first”, “premium”, “top”, “latest innovation”, “pure natural products”, “organic products”, “without side effects”, “food quality”, etc.
  • The arguments “gentle and non-irritating”, “sensitive skin”, “does not sting the eyes” require an assessment of efficacy, including human efficacy tests, consumer tests or laboratory tests.

Conclusion

The cosmetics market in China represents a considerable opportunity for foreign brands, but it is governed by strict regulations that can be complex. Understanding import, marketing, formulation and labelling requirements is essential for a successful and sustainable business. Despite the challenges, brands that are able to comply with regulations and adapt their marketing strategies to local preferences can thrive in this dynamic and growing market. With growing demand for beauty products and an increasingly sophisticated consumer population, China offers exciting prospects for the global cosmetics industry.

If you are interested in the cosmetics market in China and would like to find out more about consumer habits, Chinese regulations governing the import and sale of skincare products and cosmetics, or the role and importance of the responsible body, contact VVR International. Our experts in the field will be happy to answer your questions.

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The cultural and creative industries market in China

The cultural and creative industries market in China

China plays a central role in international trade, industry and technology, and now also in art and culture. Indeed, since the early 2000s, aware of the potential of these fields for the country’s economic growth and influence around the world, the Chinese government has been supporting the sector through a number of policies and massive investments. China’s creative and cultural industries are multiplying and diversifying their activities. The expansion of the middle class in China, accompanied by a general increase in purchasing power, is contributing to the growth of the cultural and entertainment sector. As per capita disposable income rises, people are more inclined to increase their spending on leisure, cultural and artistic outings. These dynamics support players in the sector and create new opportunities.

The emergence of the art and culture market in China

The contemporary art market

In the early 2000s, China’s economic expansion was accompanied by an opening up to the world of contemporary art. Marginal in the early 2000s, China is now at the centre of the world contemporary art market. By 2021, China will be the world leader in contemporary art, ahead of the United States, with a market share of nearly 35.5%.

This meteoric rise can be explained by a number of factors.  Between 2005 and 2008, the government introduced policies to make the contemporary art market more flexible and facilitate sales. The aim of these policies was to legitimise and promote Chinese contemporary art internationally. The aim was also to promote national creation within the country by lifting the ban on exhibiting works of contemporary art in public museums, which had been in place since 1989.

Over the last twenty years, an affluent class has developed and expanded. Made up of entrepreneurs, often urban dwellers with substantial incomes, this affluent class is developing a taste for art, which is expressed in leisure activities as well as in the purchase of works of art. In China, for example, the number of contemporary art collectors continues to grow. This dynamism is also illustrated by the significant growth in auction sales by internationally renowned Chinese artists such as the visual artist Zeng Fanzhi, born in 1964.

The arts and culture sector at the heart of China’s strategy

In recent years, the Chinese government has initiated a policy of financial support for the creation of public and private contemporary art museums across the country. These massive investments have helped to develop cultural infrastructures across the country: between 2000 and 2019, 42 new contemporary art museums were created. In addition to these public institutions, the State has also contributed to the opening of 88 private contemporary art museums over the same period.

Numerous public initiatives aimed at promoting the cultural and creative industries are being carried out at national, regional or local level, such as the creation of creative clusters in major cities like Beijing and Shanghai. At the heart of megacities with intense economic activity, the aim of these clusters is to bring together players and companies in the creative sector in a restricted area in order to create synergies, stimulate creativity and develop ambitious, innovative projects. These zones bring together companies in the sector and benefit from support to stimulate innovation.

This development of creative and exhibition spaces to showcase the country’s creative wealth has helped to boost the contemporary art market. Private players – art galleries and art centres – have multiplied, supported by the development of major contemporary art fairs such as Art Basel in Hong Kong, which bring together art market players, artists and collectors from all over the world . This combination of political will, the commitment of private players and the growing interest of the Chinese public is contributing to the dynamism of the arts and culture sector in China.

The creative and cultural sector: economic leverage and influence

The importance of the cultural and creative industry sector is not only economic, but also geopolitical. China is exporting more and more cultural products such as films, animation and visual arts to foreign markets. These exports help to promote Chinese culture around the world, strengthen its influence and shape a certain image of China.

A number of major international events take place in China every year, helping to establish its importance in the field of cultural creation. At the crossroads of entertainment, production and technology, video games occupy a strategic place in the Chinese economy and in its influence on the cultural and creative industry sector. The number of players involved and the number of dedicated events bear witness to its importance and dynamism. The China Joy (China Digital Entertainment Expo & Conference), for example, which takes place every year in Shanghai and brings together the main Chinese and international players in this creative industry, is considered to be one of the biggest video game trade fairs in Asia. At its 17th edition 5 years ago, China Joy brought together more than 1,360 Chinese and international exhibitors and attracted nearly 365,000 visitors. This success illustrates the importance of the video game and digital entertainment sector in China in recent years.

What opportunities are there for foreign cultural and creative industries (CCIs)?

For the year 2021, the Chinese government’s annual budget allocated to the “culture, tourism, sport and communication” sector was EUR 2.45 billion, with EUR 433.28 million allocated directly to culture and tourism (services, museums, halls, libraries, artistic dissemination, management).[6] This amount testifies to the importance of the sector in the Chinese economy. This vast market, with its many players and diverse activities, offers great opportunities for foreign companies. By contributing their know-how, their cultures and their unique artistic and cultural offerings, they have everything they need to establish themselves successfully in China.

There is strong demand for foreign cultural products in a wide range of fields, including live performance, music and the support and creation of large-scale cultural projects (galleries, fairs and museums). What’s more, the development of world-class cultural infrastructures and facilities initiated in the 2000s offers major opportunities for dissemination and the creation of partnerships.

Finally, despite certain regulatory constraints and the government’s sometimes cautious approach to foreign investment, China welcomes and encourages the growth of the cultural and creative industries through public funding, which is seen as a new economic and job-creation engine. Nevertheless, investing in the Chinese culture and entertainment market requires a prior understanding of its specific features and the rules that govern it, particularly the import quotas for foreign cultural content, which still limit opportunities.

Finally, products and services need to be adapted to the Chinese market, not only to match the tastes and practices of the target audience, but also to comply with the rules governing the creation and distribution of cultural content in China.

Conclusion

The cultural and creative industries market in China is flourishing. Boosted by public investment, the emergence of creative clusters and the middle class’s appetite for leisure and culture, accelerated by the digital transition, it is continuing to grow rapidly while becoming increasingly international.

Are you in the Cultural and Creative Industries sector? Are you interested in the Chinese market? Did you know that there is a development support programme in China dedicated to CCIs?

Download the Cultur’export China programme brochure here

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The Cosmetics Market in China: developments and outlook

The Cosmetics Market in China: developments and outlook

The China Beauty Expo (CBE) 2024, held in Shanghai from 22 to 24 May, brought together more than 10,000 brands and 70,000 beauty products, from global giants such as L’Oréal and Shiseido to trendy niche brands and national leaders such as Proya and Bloomage Biotech. More than 1,500 companies from the beauty supply chain were also present on 100,000 m² of exhibition space. This event is a showcase for the vitality of this sector in the Chinese market.

Indeed, the Chinese beauty market is growing by leaps and bounds, making it one of the most dynamic and lucrative in the world. With a population of over 1.4 billion and a rapidly expanding middle class, demand for beauty products continues to grow. This article explores the key factors behind this growth, as well as the emerging trends that are shaping this market.

Focus on the Chinese cosmetics market

Is the growth of the cosmetics market in China sustainable?

China has become the second largest cosmetics market in the world, just behind the United States. According to data from Statista, the Chinese cosmetics market will be worth more than 390 billion yuan (around $60 billion) in 2023. It is interesting to note that, although China is the world’s second largest market, per capita cosmetics consumption is significantly lower than that of US consumers. In fact, in 2022, the average American will spend $333 a year on beauty products, while the average Chinese will spend just $41. The growth potential of the Chinese market is therefore considerable.

However, following strong growth between 2018 and 2022, with an average annual growth rate of almost 10.7%, the market is expected to fall slightly to around 7% per year over the next 5 years. This expansion is underpinned by several factors:

Urbanisation and rising incomes:

Migration to urban areas and rising disposable incomes have led to increased demand for sophisticated beauty products.

Growing awareness of beauty and well-being:

Chinese consumers are attaching increasing importance to their personal appearance and well-being, boosting demand for skincare and make-up products. The dietary supplements market is also benefiting from this growing interest in well-being (for more information, see our dedicated article: The vitality of the dietary supplements market in China – VVR International, strategic development, production, sourcing, distribution… )

Influence of social media :

Social media platforms such as WeChat, DouYin, Weibo and Xiaohongshu play a crucial role in the emergence of trends and the promotion of cosmetic products. In China, livestreaming on social networks is enjoying considerable success. During these lives, influencers test, comment and advise their followers on new products to buy. These livestreams are very popular, and can generate a lot of sales! (For more information on social selling and its influence in China, see our article: Focus on the extraordinary phenomenon of social selling in China – VVR International, strategic development, production, sourcing, distribution…)

Among foreign brands, France, Japan and Korea are the main importers.

Since 2022, France has dominated the imported cosmetics market, with a market share of over 24%, or 36.4 billion yuan (around 5.6 billion dollars). In China, the premium cosmetics market has historically been largely held by foreign brands, while Chinese brands have mainly exported products with low added value, creating a trade deficit in this sector. In recent years, however, there has been an increase in the power and quality of domestic cosmetics brands.

The rise of Chinese brands:

Until the 2010s, the skincare and cosmetics market was largely held by foreign companies. In 2013, for example, they accounted for 72% of the make-up market, compared with 46% in 2022. Today, buoyed by changing consumer habits, local Chinese brands such as Giant Biogene (巨子生物), Syoung (水洋股份), Proya, Jahwa, BTN or even Bloomage Biotech are gaining in popularity, rivalling the international giants. Since 2020, they have held more than 50% of the local make-up market.

 This rapid development is due to three main factors:

  • Firstly, these brands have been able to adapt more quickly than foreign brands to new consumption patterns and changing demand. Being closer to their consumers, they have observed and understood their changing habits. What’s more, they are often smaller companies, more agile in organising R&D and implementing marketing plans, and able to adjust their prices more easily. Companies such as Perfect Diary, Florasis and Chando have managed to capture the attention of consumers with products tailored to local preferences and innovative marketing strategies. What’s more, the distribution strategy chosen by these brands is often based mainly on online sales, which allows them to be more responsive (online sales are the preferred marketing method for these brands, as is the case with Proya, which achieves over 90% of its sales online).
  • Secondly, young consumers are more inclined to consume national brand products. Generation Z represents almost 19% of the Chinese population, and includes many consumers of cosmetics. Born during a period of prosperity for China and its international influence, young people are proud to buy national brands, which creates excellent development opportunities for Chinese companies.
  • Finally, the desired effects and specific functions of cosmetics have become increasingly important when it comes to purchasing products. Social networks and the internet have helped to raise awareness among the Chinese of skin problems and the various treatments available to deal with them. Domestic brands were quick to pick up on these new consumer concerns. They have been able to adapt, for example by increasing the number of partnerships with medical institutions in order to reinforce their image as experts in skin care. At the same time, they have consolidated their online distribution strategy.

Challenges and opportunities for foreign brands

French cosmetics: brand image and luxury

Brand image and the perception of quality play a crucial role in purchasing decisions. Chinese consumers are particularly sensitive to well-known brands and luxury products, which they associate with high social status and a guarantee of quality. Many French brands enjoy an image of luxury and quality that is highly prized by Chinese consumers. For example, brands such as Chanel, Dior and Lancôme enjoy strong recognition and loyalty from Chinese consumers. Made in France” is seen as a guarantee of prestige and quality, particularly in the skincare and fragrance segment.

Foreign brands can also capitalise on the growing interest in natural and organic products. Demand for products that are free from harmful ingredients and respect the environment is on the rise, paving the way for brands such as Caudalie and L’Occitane to promote their natural, sustainable formulas.

Adapting to the Chinese market: challenges for foreign brands

Enhanced regulations:

China is continuing to tighten its regulations on the safety and quality of cosmetic products. Brands must remain vigilant and ensure that they comply with these standards to avoid any risk of withdrawal from the market or penalties. Compliance with local regulations is essential to maintain the confidence of consumers and the authorities.

Establishing a suitable distribution network:

Beauty products are distributed in China through a combination of online and offline channels. E-commerce platforms such as Tmall and JD.com are still major players, but their leadership position is being challenged by social selling and the growing importance of livestreaming. Physical shops continue to play an important role, offering immersive shopping experiences and personalised consultations. In 2020, online sales of cosmetics accounted for around 38% of total sales in China. In recent years, the rapid expansion of cross-border e-commerce (CBEC) in China represents a major opportunity for foreign brands. Specialised CBEC online sales platforms such as Tmall Global and JD Worldwide give foreign brands direct access to Chinese consumers without the need to register their products. Participating in major online events such as the ‘Double 11’ can generate massive visibility and sales in a short space of time, however it is important to note that Chinese consumers will expect a strong discount on the price of products at these festivals.

 

Conclusion

In conclusion, the cosmetics market in China offers considerable opportunities for both French and foreign brands. However, success in this market requires an in-depth understanding of consumer preferences, an ability to innovate and personalise offerings, and constant vigilance with regard to local regulations. Brands that are able to navigate this dynamic and ever-changing landscape will be able to capitalise on the market’s continued growth and strengthen their presence in China. With a vast and diverse population, China continues to represent fertile ground for the global cosmetics industry, promising great prospects for years to come.

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China: The New Frontiers of HR Management

China: The New Frontiers of HR Management

Human resource management in China is not only about administration and recruitment, but also about digital transformation, corporate culture and innovation. To succeed in the Chinese market, European companies need to understand and embrace these new dynamics.

 

This article aims to take you to the heart of emerging HR management trends in China and provide you with the keys to effectively integrate them into your business strategy. Discover how digitalization, the right corporate culture and innovative approaches to recruitment and training can not only improve your operations in China, but also pave the way for new growth opportunities.

Digital transformation and HR management in depth

The digital revolution in China is reshaping the landscape of human resource management. Artificial intelligence (AI), big data, and automation are now the pillars of HR efficiency. These revolutionary tools are helping to optimize recruitment, training and talent retention.

Predictive AI for faster, more accurate hiring

By massively analyzing market data and the internal capabilities of the company’s talent, AI can anticipate the company’s needs to more effectively manage the training and skills to target and refine the recruitment process.

Once the company’s skill requirements have been defined, these new tools can be used to more efficiently and accurately analyze the profiles to be recruited. Instead of sifting through piles of resumes and cover letters, which is time-consuming and inefficient, the algorithms allow each document to be examined in detail, extracting all the information and comparing it to the company’s real needs, resulting in only those profiles that match the search. This productivity gain has been key in the Chinese job market, which is equal to that of the United States + Europe.

Big data for a deeper understanding of employees

Big Data enables in-depth analysis of employee behavior and performance, providing valuable insights for human resource management decisions.

By analyzing data at scale, such as job satisfaction, performance trends, and engagement, you can anticipate potential turnover and find solutions. These analytics can also be used to identify talent within the organization, such as leadership qualities that may be useful for internal succession planning.

Automation and Operational Efficiency

Automating day-to-day HR processes such as payroll, benefits, and performance reviews frees up valuable time for teams. This allows them to focus on higher value-added tasks, such as defining solutions to analyzed issues like talent development or employee engagement.

Challenges and Opportunities for European Companies

For European companies operating in China, adopting these technologies is not without its challenges. It involves not only investment in technology and training, but also cultural and organizational adaptation. However, the potential benefits in terms of operational efficiency, cost reduction and improved employee satisfaction and retention are significant.

By adopting these technologies, European companies can not only improve their operations in China, but also gain a significant competitive advantage in this dynamic and constantly evolving market.

Corporate culture in the Chinese era

Business culture in China is a unique blend of ancient traditions and modern innovations. To succeed, European companies must not only understand this culture, but also integrate it into their human resource management. This means recognizing the importance of values such as hierarchical respect and flexibility in the face of change.

Blending Western and Chinese HR practices

Cross-cultural management is a major challenge for international companies. It is essential to adapt approaches to leadership, communication and motivation to meet the expectations of Chinese employees and to strengthen cooperation within teams.

Case studies: Companies achieving integration

European companies have already achieved this integration. For example, some have adopted flexible management strategies that encourage autonomy while respecting Chinese hierarchical structures. Others focus on intercultural training for their managers, enabling them to navigate effectively in China’s complex cultural landscape.

Implications for European companies

For European companies, adapting to Chinese business culture is critical to recruitment, talent retention and overall performance. Understanding and balancing Western and Chinese practices can not only improve their operational efficiency in China, but also enrich their global corporate culture with diverse perspectives.

Recruitment and Training Challenges and Solutions

The Chinese labor market is characterized by intense competition for the best talent, requiring language skills and an understanding of local conditions. European companies need to recognize these challenges in order to develop effective recruitment and training strategies.

Innovative recruitment techniques

Using China-specific online recruitment platforms, adopting AI-based assessment methods and employing targeted recruitment strategies can help companies attract local talent. It is also important to enhance the employer brand by highlighting the career development opportunities and unique benefits offered by the company.

Training and integration programs

Employee training and integration is critical to long-term success. This includes not only technical training, but also cultural and linguistic awareness. Mentoring programs, cross-cultural workshops, and ongoing professional development opportunities can significantly improve employee engagement and performance.

Success stories

European companies in China have implemented innovative training programs that combine Western and Chinese best practices to promote greater mutual understanding and improved performance. These programs are not limited to technical training, but also include cultural and linguistic aspects to facilitate better integration into the Chinese work environment.

Preparing for the future of HR management in China

Navigating the complex landscape of human resource management in China requires a deep understanding of emerging trends and specific challenges. Embracing new technologies, understanding Chinese business culture and being innovative in recruitment and training are essential for success.

With over two decades of experience, VVR International is ideally placed to guide European companies on this adventure. Whether it’s business development, setting up industrial partnerships, delegating administrative procedures or accessing local and foreign talent, VVR International offers expert support.

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Navigating the New Wave of Opportunities: M&A Expansion in China

Navigating the New Wave of Opportunities: M&A Expansion in China

The Chinese market, with its impressive growth trajectory, has established itself as fertile ground for mergers and acquisitions (M&A), creating a landscape rich in opportunities for international companies ready to venture in. In 2023, the data reveals a dynamic M&A scene, marked by figures that underline the renewed confidence of investors and the vitality of the market.

A vibrant M&A scene

The Chinese M&A market had a dazzling year in 2023, with inbound deals jumping 68% and outbound deals growing by 31%, a clear indication of China’s growing appeal to both local and international investors.

Consolidation in sectors such as technology, renewable energy and financial services reflects a maturing economy seeking to capitalise on global trends and innovations. Renewable energy, for example, has captured attention thanks to government-backed initiatives, propelling China to global leadership in the sector.

Focus on Sectors and Key Transactions

M&A activity was concentrated mainly in the industrial sector, which accounted for 21.5% of the market or $66 billion, followed by commodities (14.6%) and high technology (13.3%). This illustrates a strategic interest in key industries that are at the heart of China’s economic growth and integration into the global economy. A major acquisition this year was the partial acquisition (10%) of Rongsheng Petrochemical by Aramco Overseas Co for $3.4 billion.

 

Investment focus : Beijing, Shanghai and Guangzhou

The 2023 M&A market in China highlights the importance of leading cities as investment centres. Beijing recorded $70 billion in transactions, Shanghai followed closely with $60.5 billion, and Guangzhou posted $58 billion. Despite a downward trend on the previous year, these figures confirm the crucial role of these metropolises as strategic investment hubs in China, acting as incubators for companies setting up there.

This regional dynamic underlines the potential of these cities not only as economic centres, but also as privileged points of entry for international companies exploring opportunities in China. (More information on the main Chinese cities in our article : here)

Navigation Challenges and Strategies

Although investment flows and the Chinese market in general are growing exponentially, there are a multitude of factors that need to be taken into account in order to set up effectively in this market, including regulatory nuances, cultural differences and business practices. Success in China requires a deep understanding of the local market, the ability to establish solid strategic partnerships and the flexibility to adapt to market dynamics.

Conclusion: A Future of Mutual Growth

The M&A boom in China is an open invitation to international companies to explore this market. With a strategic approach and an in-depth understanding of current trends, companies can not only successfully establish themselves in China but also contribute to the country’s dynamic economy, creating a virtuous circle of growth and innovation.

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Everything You Need to Know About Outstaffing and PEO Services in China

Everything You Need to Know About Outstaffing and PEO Services in China

Outstaffing and Professional Employer Organization services, while commonplace in many countries, take on a special dimension in China. With its booming economy and ever-evolving market, China has become a popular destination for many foreign companies looking to expand their international presence. But setting up business in such a vast and complex country is not without its challenges. That’s where outstaffing and PEO services come in. 

This mechanism, which allows a company to delegate the administrative management of its employees to a third-party company, offers a flexible solution tailored to the specifics of the Chinese market. 

What is outstaffing in China?

Outstaffing is a mechanism whereby a company, instead of hiring an employee directly, uses the services of an outstaffing company. The company hires the professional and “leases” him or her to the client company, while taking care of all administrative, tax and social obligations associated with the employment.

In China, the concept of “portage salarial” has gained ground in recent years, not least because of the increasing complexity of labor regulations. For foreign companies, it provides a practical solution for entering the Chinese market without having to navigate the maze of local laws. For example, employment contracts, benefits and tax obligations are strictly regulated in China, and an outstaffing company must be well informed to ensure compliance.

Advantages of Outstaffing and PEO Services for Foreign Companies

When entering the Chinese market, foreign companies often face a number of challenges, from understanding local regulations to navigating China’s unique cultural landscape. Freelance management offers several advantages to help overcome these obstacles:

Ease of entry into the Chinese market

With outstaffing and PEO services, companies can quickly and efficiently start operations in China without having to set up a full legal entity, which can be costly and time-consuming.

Reduce Legal and Financial Risks

By entrusting employee management to an experienced “portage” company, companies can ensure compliance with all local regulations, minimizing the risk of fines or litigation.

Flexibility and adaptability

Outstaffing and PEO services allow companies to quickly adapt to market changes. Whether increasing or decreasing headcount, companies can respond in real time without the usual constraints associated with hiring and firing.

Focus on core business

By delegating administrative and human resource management to a “portage” company, companies can focus on what they do best: developing their core business and expanding their presence in the Chinese market.

Challenges and Cautions of Outstaffing and PEO Services in China

While there are many benefits to using a contingent workforce, it is important for foreign companies to understand the potential challenges and take appropriate precautions:

Understand local regulations

China has its own labor laws and regulations, which may differ significantly from other countries. It is critical to work with a knowledgeable escort company to ensure compliance.

Respect cultural differences

Business practices, employee expectations and even communication standards may vary. A good understanding of Chinese culture can help avoid misunderstandings and build strong relationships.

Choose the right portage partner

Not all Portage companies are created equal. It’s important to choose a company with a solid reputation, local experience, and in-depth knowledge of the specifics of the Chinese market.

Avoid common pitfalls

Mistakes such as failure to comply with tax regulations or ignorance of workers’ rights can be costly. Careful preparation and constant vigilance are essential.

The bottom line: Outstaffing and PEO services, a lever for your China expansion

The Chinese market, with its immense potential and diverse opportunities, attracts many foreign companies. However, navigating China’s complex landscape requires a strategic approach. Outstaffing and PEO services are emerging as an effective solution that offers flexibility, compliance and simplified entry into the Chinese market. By partnering with a competent outstaffing company, companies can not only overcome the challenges of expanding into China, but also take advantage of the unique benefits this model offers. 

As the only European company with the necessary licenses, such as the Labor Dispatch License, VVR International can offer you a legal, tailor-made “portage salarial” solution. Whether you need to quickly set up an operational team, delegate complex administrative procedures or access the best local and foreign talent, VVR is there to help.

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Outstaffing and PEO service in China: Legal news to know

Outstaffing and PEO service in China: Legal news to know

Professional Employer Organization PEO service in China is an advantageous solution for foreign companies wishing to establish themselves in this dynamic market. As the economy is constantly evolving and the legal framework is rapidly adapting, it is crucial for companies to be aware of the rules governing contingent workforce management in China. The purpose of this article is to inform companies of the latest legal developments regarding the hiring and taxation of Chinese or expatriate employees. As evidenced by the extension of expatriate tax benefits until 2027, China continues to open its doors and attract foreign talent and skills. 

China: Fertile Ground for Business Expansion

With a population of over 1.4 billion and a growing middle class, China offers immense potential for foreign companies. The country is a global hub for manufacturing, technology and services. Through the use of “portage salarial”, companies can access this lucrative market while minimizing risk and investment. By simplifying administrative and legal procedures and delegating them to a competent Outstaffing company such as VVR International, companies can concentrate on their core business. What’s more, “portage salarial” offers greater flexibility than setting up a local company when it comes to implementing a strategy in China, and enables rapid adaptation to market changes. In an economic environment as dynamic as China’s, this flexibility is an advantage for initiating and sustaining local operations.

New Legislative Developments and Their Impact

In an effort to attract more foreign investment, China is constantly adjusting its legislation on professional management. Recent legislative changes are designed to simplify procedures for businesses while providing greater protection for both local and foreign workers. For foreign companies, this means a better understanding of their legal obligations, a reduction in the risks associated with non-compliance, and greater confidence in the freelance management process. In addition, the introduction of these new regulations demonstrates China’s commitment to creating a favorable and transparent business environment for foreign companies.

Taxation: benefits for foreigners extended until 2027

One of the most notable aspects of China’s recent developments concerns taxation. With the aim of encouraging more expatriates to work in China and making the country more attractive to international talent, the Chinese government has decided to extend tax benefits for foreigners until 2027. This measure, which was originally planned for a shorter period of time, offers significant benefits to foreign workers in terms of tax relief. 

Navigating the Chinese regulatory landscape

In a country where regulations are rapidly evolving, it is imperative for companies to keep abreast of the latest legislative changes. With its growing economy and increasing openness to foreign businesses, China frequently adjusts its laws to meet changing market needs.

Preparing for the future of professional management in China

As China continues to assert itself as a global economic power, the opportunities for foreign companies are greater than ever. With its advantages and flexibility, professional management is an invaluable tool for those seeking to penetrate this dynamic market. However, effective legal intelligence is essential to ensure compliance and maximize the benefits of China’s labor and tax laws. Companies that invest in regular legal intelligence can anticipate and adapt quickly.

For foreign companies, working with an experienced, locally-established partner like VVR International is the key to efficient and rapid recruitment. What’s more, our HR team will keep you abreast of any legal developments that may affect your teams in China and will support and advise you at every stage of the recruitment process and in setting up your collaboration.

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