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China’s tech sector has grown significantly in the past two decades and is making it a challenge for the US to keep its long-standing position of the world leader. Companies like Huawei, WeChat, Baidu, Tencent, and Qualcomm among others consolidate the country’s efforts in becoming the next-generation leader in tech worldwide. Lately, China and the US are battling for the 5G technology leadership, and the competition leads to an economic war that assumes sanctions and restrictions for companies on both sides. 

Mainly there are three pillars of China’s tech sector growth: venture capital, innovation, and distinct entrepreneurial culture. All these with governmental support managed to transform China from a mass manufacturer into a tech giant.

At the same time, Alessandro Cormio from Naturality states that China has a rapidly growing market for IT products and services, with a large and increasingly tech-savvy population. The Chinese government has invested heavily in developing its own tech industry, which has led to a vibrant and innovative tech ecosystem. However, there are also significant challenges. Chinese consumers have started to shift their preferences towards domestic brands, making it more difficult for foreign companies to gain a foothold in the market. In addition, habits and market in general are very different to handle and develop when compared to the west. I always suggest NEVER trying to enter this market with the same strategy and approach as Western countries.

Why you should work with Chinese IT companies

As mentioned above, one of the three pillars of China’s tech sector is distinct entrepreneurship. In China, IT companies and businesses in general work differently than the traditional Western style. It’s about social digitalization where companies don’t need direct human interaction anymore - everything can be done remotely. Even though freelancing is a very well-known practice in the West, Chinese IT companies use corporate freelancing allowing professionals to focus on project tasks from different parts of the country.

Chinese companies don’t have any more language barriers when it comes to communication and project management is at its highest. Tech specialists are doing their job properly and fulfill the exact requirements and instructions mentioned by clients. Honestly, this is no surprise, since discipline is in the Chinese blood for centuries. 

Another reason for working with Chinese IT companies may be an abundant workforce. While European and US markets mainly confront a workforce shortage, it’s not the same for Chinese companies where tech specialists are struggling to get a place in an IT company.

What you should be aware of when working with Chinese IT companies?

On the other hand, the government controls all business processes, especially with foreign clients and investors. As a potential client, you will meet certain bureaucratic barriers that will cut the business’s appetite. The number of papers that need to be signed overlaps several times, and the number of papers you need in Europe and the US. But after having everything done, all will go smoothly.

The prices may vary from region to region and company to company. It depends on how well a region or a company performs on the national level - which still remains the main indicator for Chinese IT companies in terms of notoriety. That makes a good idea to be aware of what regions are likely to provide better services, and in which field. 

To this answer, Alessandro Cormio adds that due to the very different market culture and habits of China, to better enter the market, companies need to be aware of how differently things work in China

How reliable are Chinese IT companies

Same thing we could say about reliability. Since the country has more than 15,000 IT companies, it wouldn’t be fair to rate all companies under the same figures. Companies located in more developed regions and cities perform better, are more reliable, and have a higher credibility rate, while other companies from less-developed regions and cities are nameless, and don’t have enough experience to rate their experience.

On the other hand, in China, a nameless company can become a world brand overnight. It depends on the product they are working on, and the technologies used. Since innovation is the second Chinese tech pillar, any company can become famous, rich, or both if use the right combination.

How does the Chinese IT sector relate to the neighboring countries?

The Chinese tech sector outnumbers all neighboring countries. However, in terms of general performance, it competes with the South Korean IT sector and the Japanese one.  The internal market is enough for Chinese companies to grow and innovate, so assumingly there is no big need for exporting IT services, like in the case of Korean and Japanese companies. However, contacting foreign entities empowers and stimulates the innovation processes in a country. 

Chinese Business Environment: Complex But Rapidly Growing

China has a complex BUT rapidly evolving business environment. On one hand, it is the world's second-largest economy (projected to be N.1 in some years) with a rapidly growing consumer market. On the other hand, because of the significant state ownership and control, it turns out to be a challenging legal and regulatory environment. Working in marketing for Chinese companies looking to go overseas, it's also interesting to feel and understand the complexity and huge potential, on a scale, that this market has. China's rapid economic growth and expanding middle class offer significant opportunities for companies and talents willing to invest the time and resources to establish a strong presence in the market.

At the same time, the difficulty to open a new IT company in China is appreciated as quite open, with wide possibilities, but is getting more and more challenging.

How Chines Government Helps the IT Sector?

While it's difficult to understand all subtilities and Chinese laws all of a sudden, Alessandro Cormio, the founder of Naturality Digital - a reputable IT company with offices in China says that there are three main directions on this topic: 

1. Investment in research and development: AI and 5G on top of all.

2. Support for entrepreneurship: Plenty of initiatives to support entrepreneurship and innovation, including tax incentives, funding for startups, and the establishment of innovation hubs and incubators.

3. Encouragement of investment: establishment of special economic zones and other incentives to attract domestic and foreign companies.

Shenzhen and Shanghai - The Chinese Heaven for IT Companies

Shenzhen has been the fastest-growing city in the world in the last few years, and it keeps pushing forward. At the same time, Shanghai is the most populated and international city in China.

Alessandro considers that both should definitely be considered in the top cities in the world for IT development.

About the Chinese Local Talent Pool

Not too easy to answer this question. From my point of view, there's still a lack of people with high skills in certain things. Too many tend to specialize too much and follow a specific standard, not being beneficial to flexibility and creativity.

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This article was created together with Alessandro Cormio - Co-Founder of Naturality Digital, which is one of the leading digital marketing agencies with offices in Italy, Switzerland and China.

Entrepreneurs often struggle to differentiate between cloud and hosted services, which may seem similar but differ in processes. Understanding these differences can help choose the right for your business. Pick the right home for your website involves considering technical aspects, reliability, cost, and customer support and other factors.

There are more than 330,000 web hosting providers all around the world, and this number is expected to grow as the Internet expands. Even with the fierce competition, new providers continue to enter the market.

At the same time, data reveals that approximately 60% of all corporate data is now stored in the cloud. It has also witnessed a 10% increase compared to the previous year, 2021.

Cloud Services

Cloud service­s are computing service­s provided by third-party hosts through the interne­t and on-demand. They allow customers to acce­ss and utilize remote computing re­sources effortlessly. There are three main categories of cloud: Software as a service (SaaS), Platform as a service (PaaS), Infrastructure as a service (IaaS).

Benefits of Using Cloud-Based Services

Cloud services offer several advantages that are not available with hosted solutions:

• IT Optimization: With cloud services, the provider is responsible for building and maintaining all the hardware, so your IT department doesn't have to manage servers or install and update software on individual computers. Additionally, the provider is responsible for ensuring security and resolving any problems that might come up.

• Budget-friendly approach: Cloud service­s offer a cost-efficient approach where you only pay for what you use. The­re is no need to inve­st in hardware or purchase software licences that may end up being unuse­d by your team. 

• Business system integration: To integrate various third-party cloud solutions, you can streamline workflows and enhance team collaboration and productivity. For instance integrating your cloud communications platform with a CRM. Doing so ensures employees have access to customer information before they answer incoming calls and automatically logs all calls into the CRM.

• Increase agility and scalability: Cloud services let you make changes in just a few clicks, whether you need to shift workflows, add new features and functionality, or change the number of users.

• Support AI, predictive analytics, and IoT:  With your data in the cloud, you can easily apply these advanced technologies to improve efficiency, gain new insights, and future-proof your business.

• Support remote workforces: The workforce can access cloud services anytime, anywhere, using any device, with just an internet connection and login credentials.

Hosting Services 

Hosted services, much like cloud-based solut­ions, are managed by a third-party provider and accessed through the internet. With hosted solut­ions, the provider owns and maintains physical servers in a private location rather than relying on a public cloud. This allows the service to be accessed online without the need for insta­lling hardware or software. Users typically access it through a virtual private network or remote desktop.

Benefits of Hosting Services

Hosted services offer some of the same advantages as cloud solution, including:

• Remote access and the ability to integrate with certain other cloud solutions. Because the software and hardware are maintained by the provider, there's also less for IT to manage than with traditional computing solutions (but typically more than with cloud solutions).

• Offers greater custom­ization options compared to cloud services, depending on the setup and service agree­ment. 

• Provide more control over security proto­cols, which is partic­ularly benef­icial for companies operating in highly regulated indus­tries.

To Sum Up 

Cloud services are a more cost-ef­fective option compared to hosting services. They are easier to set up, manage, and maintain. Although hosting services offer more control, they require addit­ional IT work and often come at a higher price. However, it's important to analyze your specific business requir­ements before deciding on a hosting type. At the moment Techehemoths has almost 800 Hosting & Cloud service providers. 

Take a look at their profiles and feel free to contact them, the smart filters will also help you, Moreover, you can submit your project and our team will hand-pick and send you the best matching service providers, and you will get free quotes in about 1-hour. Also, if you want to learn more about cloud and hosting services, check out our blog for addit­ional inform­ation.