Entrepreneurship in China
Life in China is not for the faint of heart. Is it dangerous? Not at all. Well, unless you count the multiple safety hazards surrounding you on the street daily, and possible injury or death due to human incompetence. What I mean is that living in this country, especially in a smaller city, is definitely not for everyone.
It can be a great life full of adventure, but for every tally mark given, half of one is erased by daily frustrations.
I've talked about the things I don't like here ad nauseam, mostly to stay sane. It's easy to complain about China, and I will have a long list soon as I'm currently writing my big country roundup for it. But today I want to write about one of the things I love most about this place.
You may never think it, especially if you're inundated with Western media's constant, sometimes warranted negative coverage of China, but the spirit of entrepreneurship is strong here. I would almost argue that this is one of the most capitalist countries in the world at the moment (with some caveats). It's easy to turn an idea into money here if you want to.
An incubator for your ideas
The vast majority of expats do not come here to start a business, nor would I recommend them to do this. Although the English teaching thing is sort of winding down here, it still remains the primary reason foreigners come to China. It's why I came to China. If you have a passion for teaching, great. Even if it's just a temporary idea for travel, I still recommend it.
“It's really difficult, as well as scary, to leave a comfortable job in America to start your own thing.”
The typical teaching job here is around 20-25 hours a week, and depending on where you live, you can make as high as 20,000 RMB (3,020 USD) per month, maybe more. Maybe that's not so much by an American standard, but if you're living in a Tier-3 city like me, you can live comfortably on 3,000 RMB/month. That's a huge chunk of change to put away, especially if your housing is paid for, as is often the case.
So, now you're making around what a huge segment of the US population is making except you're not working slave hours to do it, completely tax-free. What to do with all that free time? Some find the answer at the bottom of a bottle, mostly to deal with the constant noise, pollution, and, um, interesting behavior of the general population here (search YouTube for Chinese tourists). However, that still leaves you with a lot of downtime.
Another option is to explore an idea that you've never had the time to execute back home. It's really difficult, as well as scary, to leave a comfortable job in America to start your own thing. It's harder to save up a cushion for the interim between the end of your reliable income and becoming profitable on your own. The time to research and prepare your idea is scarce when you're working 40+ hours per week.
Becoming a lowly teacher in China will grant you all of these things if you have entrepreneurial ambitions.
The ethical question
Some people are going to argue that you shouldn't take advantage of a teaching job like this. Ignore the people on their high horses. There are absolutely no standards here. I don't say that as an invitation for low lives to come here to play life on easy mode. I'm saying this because your MA in education and 5+ years of experience teaching English in America are not going to mean much here. You're still going to be singing songs and fulfilling the "dancing monkey" stereotype regardless, and you are still "just a foreigner" and will not get any extra respect. Maybe more money though.
I think doing this is absolutely fine as long as you do your job well. Plan engaging lessons, show up for work on time, get on well with your colleagues (don't treat the Chinese co-teachers like slaves as many expats do) and, in general, just don't be a piece of shit. Be entertaining to your students in the classroom. Sometimes I wonder what matters most to language centers in China - playing games and acting a clown or actually teaching the language.
The pitfalls of entrepreneurship in China
1. The Internet is terrible.
My god, if your business relies heavily on the Internet and social media marketing, do not start it in China. As pretty much everyone knows, the Internet here in China is heavily censored by the Golden Shield Project, more commonly known as the Great Firewall. Part of it is to keep their population ignorant, but another huge reason for this is to give domestic companies a chance to compete, which is pretty easy if you shut out foreign competition altogether.
“A VPN is completely necessary if you are a foreigner who wants to live in China.”
The result is constant head-pounding frustration anytime you need to do something serious online. Of course, the obvious solution is to buy a VPN service. It is completely necessary if you are a foreigner who wants to live in China, let alone start a business here. VPNs allow you to use servers in different countries to bypass the Great Firewall. There are several options available and they're quite affordable.
Even after setting up your VPN, you still have to deal with the absolute dogshit speeds here. I've had to wait hours for a single attachment to upload to an email. Now, imagine waiting hours for something to upload, and then your connection just bottoms out completely. If you are going to try to work mostly online here, prepare to be acquainted with alcoholism.
2. Navigating Chinese business culture.
There are certain cultural quirks you should be prepared for if most of your clientele will be Chinese. The first is the idea of negotiating. Most Chinese are just not used to the idea of a set price when it comes to doing business. They always think they can get it cheaper and, believe me, they will try.
Our startup in Beijing has had many promising clients that we've had to refuse because they simply want to pay slave wages for Western-quality work from a Western firm. It usually works like this: 1) Pretend to be very happy about the initial offer, 2) offer a different, completely convoluted metric of payment that is overwhelmingly to their advantage, 3) pretend that's all they can afford, yet come crawling back later after you've refused their ridiculous counter-offer.
Also, communication. Chinese business culture is not conducive to effective communication. It’s a culture that goes to great lengths to avoid confrontation, which often leads to people leaving out details that you may find unsavory, leaving you to confront them without any preparation once they crop up.
3. Extra rules for foreigners.
Right off the bat, foreigners cannot own a company outright in China. As with most things here, however, there are many ways around that. The easiest type of company to form is a joint venture, with a Chinese person as your partner. If you really, really trust them, you could let them register it in their name completely, but just know you have no legal recourse if something goes down.
The next entity is called a Representative Office (RO), and it is exactly as it sounds. This entity is supposed to be the Chinese face of a company that is already registered somewhere else. There are a lot of strict controls with an RO, such as not even being permitted to generate a profit. You're only representing your company. The final form is the Wholly-Owned Foreign Enterprise (WOFE), which is essentially registering a current company in China. There is a lot of paperwork involved and some minimum level of capital is required in order to do this one.
Speaking of capital, this could be another hurdle for foreign entrepreneurs. All of the above - other than the RO route - require some sort of minimum capital to register. For these reasons and more (I could write an entire post on this subject), I would recommend China to entrepreneurs in the early stages of launching their ideas as a way station. Enjoy the free time and savings that life in China brings, then eventually register somewhere else with fewer headaches.
My entrepreneur origin story in China
I came to Daqing in 2013 with my girlfriend, both of us on a 1-year contract at a language center. We did it as a sort of temporary solution of sorts because she's English + I'm American = a very difficult visa situation. So we came to China for a new experience, some adventure and to just live together like a real couple. We had a blast.
During that first year, I was more focused on just enjoying myself and writing for my blog and other publications, but as time went on and as more people found out about my graphic design background, I had work coming in on the side. I designed branding for my favorite bar in Daqing and worked on branding and presentations for a VR company. At one point I found myself in a meeting with the Deputy Mayor of Daqing that resulted in that company getting government investment.
The connections I made in that first year led to me joining a Beijing-based startup that specializes in design, social media marketing, and SEO. While all of this is happening, my school made me the Director of Staff and gave me a huge raise to start another branch in a different part of the city. So now I'm at a point of transition. If our startup becomes profitable, I'll leave China and work remotely from anywhere, hopefully in London so that Kate and I can continue to be together.
I consider this time in China a crucial part of my development as both a designer and an entrepreneur in general. The culture has presented a unique challenge as well as an interesting atmosphere for making connections (social capital is a big part of Chinese culture). If I didn't come here and follow this path, I'm not sure if I would have had the confidence to do my own thing. ◉
Written by Seth Barham
