The Importance of the Chinese Language for Business
A Challenge to the Global Economy
Let's set the scene: the year is 1945. At the end of World War II, the Allies were victorious and Europe, the bastion of the world's advanced economies at the time, was in ruins. In conflict after conflict, traditional European economies are faced with seemingly intractable reconstruction efforts, losing a significant portion of their male population and facing massive inflation. Sometimes one person's misfortune can be another's benefit. Amid the turmoil, the United States, the only major developed country to survive the war untouched, became the most powerful economic power in history.
For decades, this status quo remained largely unchanged until some political policies on the other side of the world laid the groundwork for change. In 1978, when Deng Xiaoping, the then Chinese president, started China's economic reforms, he came to abandon China's previous state-run ethos and introduced capitalist policies.
This opening up of the Chinese economy spurred unprecedented growth, lifted millions of people out of poverty and, over time, cemented China's position as the world power as we know it today. By 2022, China will become the world's second largest economy in terms of nominal GDP, and most experts predict that the Chinese economy will overtake that of the United States in the coming years. Does all this catch your eye? Let's see some interesting facts about the economy of the most populous country in the world:
China imports more US agricultural products than both Canada and Mexico
China is the largest buyer of North American agricultural exports, ahead of its neighbours Canada and Mexico. Soybeans accounted for more than half of the 9.2 billion USD in exports that China bought from US farmers in 2018.
China Has a Retailer Bigger than Walmart and Amazon
Walmart is the largest privately held company in the United States and the largest retailer in the United States. Of course, Amazon is the largest online retailer. However, both companies are outperformed by a single Chinese company, Alibaba.
The Chinese online retail giant moves nearly three times as much merchandise as Amazon, and with its subsidiaries, the Chinese online retail giant has overtaken Walmart to become the largest retailer. Alibaba, which entered the US e-commerce market through AliExpress, is already the sixth most popular online shopping site in the United States, and it's far behind in Canada.
China has the second-largest number of billionaires, after the UNITED STATES
China has 388 billionaires, slightly more than half the United States (680) and ahead of Canada (45). Overall, US billionaires are nearly three times as rich as China, but the Asian country is on the rise, adding 55 billionaires in 2017, the highest rate of any country.
Chinese consumers spend 73 billion USD on luxury goods each year
Noted in a McKinsey poll, 7.6 million Chinese families had enough disposable income to buy luxury brands in 2016. Millennials are at the forefront, with a total expenditure of about 73 billion USD in spending in 2018, or nearly a third of the world's market for high-end and high-status products.
China's export economy grew 954% between 1970 and 2010
Under the previous state policy of total trade control, China did little international trade. According to the World Bank, exports accounted for less than 3% of GDP in 1970, but by 2010 had risen to more than 26% from a peak of 36% in 2006.
Average household income in China has increased by over 400% in 10 years
China's booming economy has not only created billionaires, it has lifted millions out of poverty and created a middle-income economy. Between 2002 and 2012, the average household income in China rose from 4,273 USD per year from 987 USD, an increase of more than 400%. Also, in 2013 that figure increased again to 4,806 USD, roughly five times higher than in 2002.
Why is this important?
With its huge export market and increasingly powerful technology sector, China has firmly established itself as a major player on the world economic stage. In addition, many economists believe that the Renminbi, China's currency, will overtake the US Dollar as the global reserve currency in the coming decades.
When a country's currency is the world's reserve currency, as is currently the case with the US dollar, all other countries must store that currency in order to conduct international trade. For example, oil is traded in US dollars, even between countries that do not use the US dollar as their national currency. If this happens to the Renminbi, the world's attention will turn more to China and further strengthen its economy.
The Chinese Language
China is currently the largest holder of US public debt and is making major infrastructure investments around the world, including in Latin America, Africa and the Middle East. With the internationalisation of the Chinese economy, the Chinese language is becoming more and more important as the language of trade and business. With over 1.3 billion Chinese speakers (including all Chinese variants such as Mandarin and Wu), Chinese is by far the most widely spoken native language in the world.
For companies dealing with Chinese customers, it is essential to interact with this market in their native language. Research shows that nearly 71% of consumers would prefer to shop in their native language if given the chance. This means that any company that wants to enter and succeed in the world's second largest consumer market should seriously consider translating its marketing materials, websites and product brochures.
In addition, in order to have intellectual property protection when entering the Chinese market, it is necessary to properly register your product. In turn, these patents must be properly translated into Chinese before they can be submitted to the authorities.
Looking closely, Chinese investment in the United States in 2019 was about $38.1 billion, and in Canada in 2015 it was estimated at about $12.6 billion. To differentiate themselves from the competition, local companies trying to attract Chinese investment should also consider offering Chinese-language resources.
Idiomatic Canada has extensive experience in handling Chinese services, including Cantonese and Mandarin, for a diverse client base. Idiomatic has an extensive network of local interpreters and translators who can provide Chinese translation services for patents, websites, contracts and marketing materials. Do you want to dive into the Chinese market? Contact us here.