Guangzhou is China’s third largest city; it sits in Guangdong province and is only a two hour train journey from Hong Kong. It’s also less than an hour away from Shenzhen and thus offers convenient access to most of the manufacturing heart of the mainland. It is officially a “mega city” with a population in excess of 10 million people, making it more populous than quite a few countries and it can take a while to get used to the size and sprawl of the city.
Guangzhou is extremely popular for foreign companies looking to get a hold in South China, it’s location is extremely useful as a transport hub and it can be more cost effective than opening a base in nearby Shenzhen which is closer to Hong Kong and thus is more expensive for property as it serves as an overflow to the island’s Special Economic Zone status.
Setting Up a Business
As with all cities in China there are only three vehicles for a foreign company looking to open an office in the city. You can open a representative office, a Wholly owned Foreign Enterprise (WoFE) or a joint venture. It makes sense to take local legal advice before choosing your set up, representative offices can be very limited in their sphere of operations, WoFE’s are ineligible for certain industry subsidies and joint ventures require a lot of planning and patience.
Cantonese is the language of Southern China and in Guangzhou the most commonly spoken language is a Cantonese variant known locally as “Guangdongois”. Mandarin is also fairly commonly spoken and many Chinese speak a little of both to get by. If you only intend to conduct business in Guangzhou then you should rely on Cantonese speaking staff, but if you intend to branch out later bi-lingual staff will bring significant benefits in the long-term.
There’s a reason expatriate staff expect a premium to be based in Guangzhou, despite the lower costs compared to Shenzhen. It’s the ever present pollution; Guangzhou is one of those Chinese cities where you’ll want to invest in a face mask for most of the year.
Like most major Chinese cities caught up in the automotive boom, the city often reaches a state of gridlock during busy periods on the roads. On the bright side, it also has an excellent and affordable public transport network, though to make the most of it you’ll need to learn to speak a bit of Chinese.
Living in China can be hard work as a major industrial hub Guangzhou offers many Western style amenities including restaurants and bars. But there’s a shortage of supermarkets offering Western food and while pirate DVD stores abound, there’s not much in the way of English based entertainment outside of that. There are some high quality (if expensive) International schools for expatriate families.
Guangzhou is an excellent location for doing business in Southern China, but it can be a hard city to live in. If you’re thinking of setting up there it’s worth doing a bit of reconnaissance first to ensure your location allows access to amenities and some Western influence. China can be daunting for expats and a little taste of home can make for an easier transition, no matter how much you intend to “bury yourself in the local culture.”