Growth market China - ICT providers also benefit

The most recent powerful stimulus is the "Internet Plus" action plan announced by the Chinese government in July this year. This plan envisages the use of innovative online technologies - mobile Internet, cloud computing, Big Data and the Internet of Things - in traditional industries to stimulate overall economic growth in China.

This is urgently needed because the People's Republic is currently still in the industrialization phase. There is a lack of companies and products that are internationally competitive. At the same time, breakthroughs in numerous important technologies and plants seem long overdue.

Expansion to economic power by 2045

In the "Internet Plus" action plan, development targets and supporting measures were therefore drawn up to enable new industrial methods to be established through the integration of the Internet in key sectors, keyword: "Industry 4.0".

The goal is to build China into an economic power by 2045 that can compete with the world's leading industrial nations through high-quality and innovative products.

According to internationally recognized calculations, the performance of companies can be increased by around 20 percent through the use of the industrial Internet. At the same time, companies can also reduce their costs by 20 percent in this way.

Experts therefore estimate that the development of the integrated use of the industrial Internet is likely to increase the gross domestic product (GDP) of the People's Republic of China by at least three trillion US dollars over the next 20 years.

ICT companies here can also benefit greatly from this development, as Germany and China agreed to cooperate in the area of "Industry 4.0" in the course of the German-Chinese government consultations in the fall of 2014.

As the Chinese not only want to learn from Germany, but also to buy powerful technologies, huge profits generated by the demand for "Industry 4.0" in China are tempting.

Now that the order books of many large technology providers such as Bosch, Kuka, SAP and Siemens are already well filled in China, medium-sized ICT companies should also consider entering the market soon.

However, many German high-tech providers are currently still shying away from such a step. The biggest obstacles seem to be the physical distance, the foreign language, cultural differences and the complex business world in the Middle Kingdom.

Anyone who has ever had any contact with the Chinese economy knows: mindsets, work cultures, corporate structures and the legal regulations are sometimes enormously different in the two countries.

First explore market opportunities

For their first steps in China, German high-tech providers should therefore follow a few basic rules. First, they should spare no effort in precisely sounding out their market opportunities and then developing a suitable marketing and sales concept.

For its successful implementation, a partnership with a Chinese company can be of great advantage, either as an equity or cooperative joint venture. Because experience shows: Personal contact is extremely important for successful business in China.

Only when the chemistry between the cooperation partners is right is there a stable basis of trust for further cooperation.

Intercultural bridge builders

To make the right connections, it is advisable for medium-sized ICT providers to rely on intercultural bridge builders to clear the way and help them gain a long-term foothold in China.

CompAllianz can be an ideal partner for this. Arguments in favor of this are the comprehensive market knowledge and the intensive cooperation that CompAllianz has cultivated with Chinese and German business networks for many years.