Take time to look at new situation before entering China

Russell Brown, managing partner of LehmanBrown, an accounting, taxation and business advisory firm that specializes in China, says his company has helped bring hundreds of European companies to China over the past 14 years. The company has operations in Beijing, Shanghai, Hong Kong, Macao, Shenzhen, Guangzhou and Tianjin.

Brown says that when he set the company up 14 years ago his aim was to build an international firm that could help foreign companies do business in China and Chinese companies do business abroad.

The Chinese government's plan to rebalance the economy means reducing low-cost manufacturing, increasing the use of technology and creating technology and service industries, Brown said.

"So, it's a natural progression. For SMEs, which are usually strong in innovation, high-tech, and the services industry it provides great opportunity.

"We see a significant increase in SMEs in innovation, high-tech and service sectors looking to the Chinese market, to look at either establishing themselves here or where they have intellectual property or the ability to create intellectual property and or to get intellectual property rights for special products. They can find companies in China that can help take them to market through venturing or cooperation."

Benjamin Denis, general manager of Mixel Inc, a French company that designs and manufactures custom-made mixers for various applications, says the attention China is now paying to the environment has created more opportunities for his company, whose products are bought by companies in areas such as water treatment, bio-energy and agriculture. Mixel employs 55 people in France and 22 in China, Denis said, and it says it plans to continue to focus on the niche market.

"We are small, but we are very specialized in the mixing industry. China is a very big market for sure, and a big country, and we need to focus in order to be successful." The company set up a factory in Beijing in 2005, and at first sold mainly to foreign companies.

Chris Cheung, director of the EU SME Center in Beijing, said that recent figures show that out of Europe's 22 million SMEs about 10 percent of them exporting beyond the internal market are exporting to China.

The EU-funded center helps SMEs prepare to do business in China, providing practical information, advice and training in business development, legal issues, standards and human resources.

The center, which opened in 2010, has 6,000 registered members, of which 55 percent have not yet done business in China, the other 45 percent are already exporting or investing in China.

Xiao Qiang, director of the China Small and Medium-Size Enterprise Institute, says that as China moves up the value chain, companies from Europe will bring more innovation and excellent experience to China.