Foreign companies have been entering China for decades, but the assumptions that once drove those decisions are increasingly out of step with what the market now requires. Once a low-cost manufacturing base, the pace at which businesses now operate in China has outrun many of the internal timelines that European companies apply to their China operations, and the domestic consumer market has matured in ways that demand a different kind of commitment.
To understand what it takes to build and sustain a business there, we spoke with Jochen Zhu-Schleiss, a German industrial and healthcare executive who has lived and worked in China for 21 years. Now general manager at a Swiss precision fastener manufacturer supplying China’s electric vehicle sector, Zhu-Schleiss has led multiple company turnarounds, managed operations across Shanghai, Chongqing and Guangdong, and developed a perspective on foreign business in China that is both long-range and operationally grounded.
Speed is an operating condition
In Zhu-Schleiss’s experience, the adjustment that catches most European executives off guard is the pace. Product development decisions that take six to 12 months inside a European organisation can move in six to 12 days in China, a gap he attributes to structural differences in how decisions flow through organisations rather than to cultural characteristics.
The automotive sector makes this visible. China’s EV manufacturers have moved from concept to market at a speed that has caught European incumbents off guard, and suppliers into that ecosystem face the same expectations. “In China, when people fail, they stand up and do it again,” Zhu-Schleiss observes. “They don’t wait for long time.” For foreign businesses entering or expanding in China, internal approval processes calibrated for European timelines tend to create friction long before the first sale is made.
The market entry question that determines everything else
Zhu-Schleiss has held the same position for two decades. Come to China, produce in China, sell in China. The logic, he argues, has only strengthened. China is a market of 1.4 billion consumers with a growing middle class and increasing appetite for higher-value products, and it is a social commerce environment where brand presence on platforms such as Tmall, JD.com and Douyin carries real commercial weight.
The “China Plus One” framing has legitimate risk management logic, but Zhu-Schleiss sees it as a distraction from the more important strategic question. “Forget about producing products in China for export,” he says. “China is not a cheap manufacturing country anymore.” Businesses entering to manufacture for export are pursuing a different strategy to those entering to serve Chinese consumers, and the two require different structures, partners and cost assumptions. For B2B businesses, competing on price against local manufacturers in a standard product category is unlikely to work; companies that hold their position supply specialised or technically complex products where local competitors cannot match the precision or certification requirements.
The legal steps that tend to come too late
Two steps, in Zhu-Schleiss’s view, are consistently addressed later than the risk warrants. The first is trademark registration and intellectual property protection, which in China means filing before entering the market rather than after. The second is the direct holding of import and export licences. Delegating these to a local agent is a common shortcut that can leave a company without the ability to continue importing if the agent relationship ends or is not structured to preserve licence ownership explicitly.
Both steps reflect a point that Zhu-Schleiss returns to throughout.The legal and regulatory infrastructure of a China operation carries more strategic weight at the planning stage than it is typically given.
Relationship building comes before sales
On this point, Zhu-Schleiss is unambiguous. In Chinese business culture, the decision to work with a supplier typically originates in the R&D and quality departments of the customer, not in procurement. Technical requirements are defined, preferred vendors are established and internal advocacy builds before the purchasing team is formally engaged. By the time a pricing conversation happens, the relationship has often already shaped the outcome.
His advice to foreign companies is to lead with the relationship, not the product. “Nobody’s waiting for you here anymore,” he says. “This time is over.” Companies that arrive expecting their European reputation or product quality to open doors find the market less receptive than they anticipated. Building trust and technical credibility with the people who influence the decision, before a formal procurement process begins, is the sequence that consistently works.
Localisation has a limit
Companies that localise too aggressively risk eroding the qualities that made them competitive in the first place. Zhu-Schleiss describes a Mercedes-Benz audit at a company he turned around, where the auditor was direct. The operation had drifted from European standards across its workspace environment, compliance practices and process discipline, and was at risk of failing. The reset required reinstating European quality standards before the audit could be passed.
Cost efficiency and market adaptation are legitimate goals. The limit, in Zhu-Schleiss’s view, is where localisation begins to strip away the identity and standards that give a foreign brand its credibility with customers and employees alike. A workplace that reflects European quality expectations, including safe production environments and consistent investment in people, retains staff more reliably and performs more consistently than one that has traded those standards away for short-term savings.
China’s labour market reinforces this. The pattern of frequent job moves for marginal salary increases has given way to greater valuation of stability and long-term progression within a single employer, particularly in foreign companies where the operating approach carries perceived reliability.
The common thread across all of these areas is commitment. Businesses that build lasting positions in China tend to have arrived with a long-term orientation, structured their legal foundations before entering and treated relationship-building as the first priority rather than a preliminary step. The market rewards that approach and tends to expose operations built on assumptions that no longer hold.
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