KEY METHODS OF DOING BUSINESS

Education

In order to enhance communication and co-operation between China and overseas educational institutions, the Chinese government encourages its qualified universities to establish their own schools overseas, or to set up overseas courses in unique subjects such as traditional Chinese medicine or Chinese language and literature. It also welcomes high-quality overseas educational institutions wishing to set up in China.

To set up a Higher Education Institution (HEI) with Chinese student enrolment ability, it is a requirement to find a local institution to be your partner. You will also need to rely on your local partner to submit all the application materials to relevant educational authorities, such as the respective municipal bureau of education or the provincial education department in order to obtain a school license. All applications have to be submitted to the education authority in March or September.

Overseas universities are not allowed to carry out promotional activities for student recruitment on their own in China. They must work with a local Chinese partner. There is an increasing trend for UK universities to set up a representative office in China (e.g. Napier University) to help promote their university, liaise between students and the university and make alumni contacts.

Education equipment

With regard to the educational equipment procurement for public schools, as long as part or all of the funding is from the government’s financial allocation, it has to go through the government's procurement procedure if the total amount of procurement exceeds RMB100,000 (US $12,200). Usually, schools must submit their purchasing requirement to the provincial Educational Equipment Centre in order to be recorded. If the procurement amount is between RMB100,000 and RMB500,000, it goes through the government's central procurement procedure, which is overseen by the provincial Financial Department. The Financial Department will either invite bids from preferred suppliers or put the contract out to public tender. However, if the amount of the contract exceeds RMB500,000 then it has to be put out to public tender.

Currently, educational equipment tenders are mostly open to domestic bidders and very few are for international bidding. However, some high-end product procurement such as for laboratory instruments is open to international tender. Private schools have more liberty to purchase educational equipment, as they are self-financing. They don't need to go through the government's procurement procedure but can make their own decision to buy equipment from local or international suppliers. Presently, most of the private schools purchase their educational equipment from local or domestic suppliers, given that they offer more competitive pricing.

China is a market that requires a medium- to long-term commitment to develop. Undertaking research and working through the necessary local laws and regulations can be time consuming for small- and medium-sized enterprises or those new to the market. It is recommended that some time be spent building contacts with Chinese educational authorities and companies prior to committing to potential business.

It is best to find a local agent or distributor that has relevant trade import & export experience and expertise. Some end-users will not be allowed to purchase equipment directly from overseas companies and will need to find an intermediate import and export trading company. Moreover a local agent can help carry out maintenance and after-sale service.

Universities make their equipment procurement/purchase plans for the next calendar year every autumn. The Lab & Equipment Department of the university will have this responsibility.

The process is as follows:

1. Teachers propose a purchase list to the relevant Department Head with details of the equipment;
2. If approved, the list will be forwarded to the Lab & Equipment Department;
3. The Lab & Equipment Department will start the procurement process;
4. The Lab & Equipment Department will review the lists with an expert committee in the university (particularly for new and/or technical equipment);
5. If approved, the Lab & Equipment will start the procurement of small value items whose value is under RMB1m.
6. For equipment for certain projects (e.g. 211 Project), the Lab & Equipment will put forward the proposal to the Education Bureau for approval.
7. If approved, the Lab & Equipment Department will start the procurement for those items under the value of RMB1m.
8. The purchase of those items above RMB1m will be undertaken by an authorised Chinese bidding company.

Training

Training companies conduct business almost the same as a private enterprise. It is essential to have deep local knowledge for a successful private training company.