China’s closed. Or is it? How to grow your business in Shanghai without your IT infrastructure falling apart

March 12, 2023 6 min
You can stop knocking, the door is open - and they've even put out the welcome mat! Despite the common perception that China is a closed market, the Chinese government has recently implemented a range of policies and regulations to attract foreign businesses and investment, such as establishing free trade zones, reducing restrictions on foreign ownership, and introducing tax incentives for foreign companies.

As Shanghai continues to grow as a hub for international business, companies from around the world are increasingly looking to expand into this vibrant market. However, foreign businesses must navigate a set of unique challenges to establish a strong presence in China - and this is particularly true when building and managing an IT infrastructure that will allow for growth and sustainability.

Your IT infrastructure can be your champion or your downfall when setting up operations in China. So what are the most important things to do to ensure your journey is successful?

Strong RelationshipsTests, Allies, and Enemies: Build Strong Relationships With Local Partners

Building strong relationships with local partners is crucial to creating an IT infrastructure that is both compliant with the complex legislative framework in China and can keep you competitive in a fierce business environment. This is often easier said than done, particularly when you are entering a market that is new and foreign to your business - you need the right local partners to help you establish the right local partners!

Creating or collaborating with a strong local IT team is therefore critical in helping you develop the right strategic partnerships and assisting in establishing a network of suppliers. These business networks take a long time to build and nurture, time that expanding companies don’t have. The right IT team should bring with them existing, strong, and sustainable relationships your business can leverage to build the compliant infrastructure you need quickly.

Stay Safe: Focus on Cybersecurity

With the increasing number of cyber threats in China, including state-sponsored hacking and cyber espionage, it is more important than ever to take steps to protect your business's sensitive data and IT systems. This means you have to:

  • Understand the threat landscape by staying informed about the latest cyber threats, tactics, and vulnerabilities in China.
  • Implement strong cybersecurity measures including using up-to-date antivirus software, firewalls, intrusion detection and prevention systems, and strong authentication and access controls.
  • Cultural and communication differences
  • Conduct regular security audits that can help you to identify vulnerabilities in your IT systems and identify areas where additional security measures or patches may be needed.
  • Work with trusted partners including IT service providers who have experience and expertise in implementing cybersecurity measures in China.

Scalable ITBuilding your Arsenal: Invest in a Robust and Scalable IT Infrastructure

Building a strong, adaptable IT infrastructure is key to enabling businesses to establish and expand their operations in new territory. As one of the world's largest and fastest-growing economies, it is definitely not business as usual when it comes to setting up your IT network in China.

For example, China has strict rules and regulations regarding data privacy, cybersecurity, and technology transfer that must be followed, and the penalties for non-compliance are harsh. It is important to work with local experts and legal advisors to ensure compliance with these regulations.

There are an array of solutions to choose from, and what you are used to at home might not work for your Chinese operations. It is important to select hardware and software that is compatible with local networks and systems and select high-quality routers, switches, and firewalls that can handle the high traffic volume and complex network environments in China.

The right local partners can help you make all the best choices and ensure that your infrastructure is built for the long haul.

Bring in the Sharp Shooters: Hire Experienced IT Professionals

As with many other things related to doing business in China, hiring the right IT professionals for your Shanghai operations is a complex and difficult task. The entire APAC region is finding it hard to fill in-house IT positions - there was a shortage of over 2.16 million IT people in the area in 2022.

Despite this shortage, it is essential that companies find a way of bringing in local expertise. This is the only way to overcome language and cultural barriers that can impact communication and collaboration and navigate the tricky regulatory landscape.

Finding the perfect balance of IT expertise along with local knowledge, experience, and networks is a big ask, and sometimes partnering with a local outsourced team who can stay close to you and give you access to everything you need is necessary.

Update Your IT

Be on Guard - Regularly Assess and Update your IT Systems

Building the right IT infrastructure is only half the battle. Managing and maintaining your IT systems is also vital given the rapidly changing business environment in China. This means ongoing, proactive assessing and updating of your IT systems to make sure that your business is:

  • Identifying and fixing any inefficiencies in the system to ensure faster and more reliable performance, better utilization of resources, and improved productivity.
  • Staying compliant with current regulations and avoiding any potential legal issues.
  • Keeping up with technology trends and staying on top of emerging technologies, ensuring that you are leveraging the latest tools and platforms.

The Road Back: Develop a Disaster Recovery Plan

In China, where natural disasters, cyber-attacks, power outages, and other disruptive events can have a significant impact on operations, a well-designed IT disaster recovery plan can help businesses to minimize downtime, protect critical data, and ensure business continuity in the event of an IT disaster.

Start by conducting a risk assessment to identify potential threats and vulnerabilities as well as identifying essential IT systems and data that must be protected, then develop a strategy that outlines the steps that will be taken in the event of an IT disaster. This includes identifying backup systems such as data replication and mirroring systems, establishing off-site backup storage locations, developing recovery procedures, and establishing communication protocols.

Local IT expertise and knowledge are vital in helping businesses both understand the threat landscape as well as putting recovery and backup plans in place.

Crossing the Threshold: Take the Next Step

There are unique challenges to operating in China, particularly when trying to build the right IT infrastructure to support business growth and innovation. While these may require thought, foresight, and the right local partnerships to address, they shouldn’t scare you off.

China is open for business, and the road in is well traveled - there are local partners with a vast amount of experience in helping foreign corporations set up operations in their region.

QTS Global offers support that combines local knowledge, networks, and supply chains along with the best IT expertise.