The Importance of the Chinese Language for Business

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A Challenge to the Global Economy

Let's set the scene: It's 1945. The Second World War has ended, the Allied forces have come out victorious and Europe -- at that time, the stronghold of the world's developed economies -- was in shambles. With one battle after another, the traditional European economies found themselves dealing with a seemingly insurmountable reconstruction effort, having lost significant parts of their male population, and dealing with rampant inflation. Sometimes, one's misfortune can be to another person's benefit. Amid the turmoil, the United States, which was the only large developed nation untouched by the war efforts, firmly cemented itself as the largest economic power in history.

This status quo remained largely unchanged for decades, until certain political policies in a far off land laid the groundwork for a change. In 1978, Deng Xiaoping, the president of China at the time, ushered in the Chinese economic reform, which looked to cast off the country's prior state-owned philosophy and introduce certain capitalistic policies.

This opening-up of the Chinese economy spurred unprecedented growth, lifting millions out of poverty, and with time, cementing China as the global juggernaut as we know it today.  As of 2022, China is the world's second largest economy in terms of nominal GDP, and most experts predict that the Chinese economy will overtake the United States' in the coming years.

Did this get your attention? Let's take a look at some interesting facts about economy of the world's most populous country:

China imports

China imports more US agricultural products than both Canada and Mexico

China is the United States' largest buyer of agricultural exports, beating both of its neighbors, Canada and Mexico. At 9.2 billion USD, soybeans accounted for over half of the exports China bought from US farmers in 2018.

China Has a Retailer Bigger than Walmart and Amazon

Retailer China

Walmart is the United States' largest private employer, and the biggest retailer in the US. And of course, Amazon is the biggest online retailer. But in their respective spaces, both companies are dwarfed by just one Chinese company -- Alibaba.

China's online sales giant moves sells nearly 3 times as much merchandise as Amazon and counting subsidiary branches under its corporate umbrella, surpasses Walmart as the biggest retailer. Alibaba has entered into the North American e-commerce market with AliExpress, and is already the sixth most popular online-shopping site in the US, and isn't far behind in Canada.

Billionaires China

China has the second-largest number of billionaires, after the US

China, with 388 billionaires, has a little more than half as many billionaires as the US, at 680, and far ahead of Canada, with 45. Collectively, US billionaires have almost three times as much money as those in China, but the asian country is making up ground, adding 55 new billionaires in 2017, the most of any country.

Chinese consumers spend $73 billion on luxury goods each year

Luxury goods China

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 exports

China's export economy grew 954% between 1970 and 2010

Under its previous policy of complete state control in commerce, China did almost no international trade. According to World Bank data, exports accounted for less than 3% of its GDP in 1970, but by 2010, that figure had risen to over 26%, dropping from a high of 36% in 2006.

Average household income in China has increased by over 400% in 10 years

Income China

China's booming economy hasn't just created billionaires, it has also helped lift literally millions of people out of poverty and create a middle-income economy. Between 2002 and 2012, China's average household wage rose from 987 USD per year to 4,273 USD, an increase of over 400%. What's more, by 2013, that figure was up to 4,806 USD, approximately a five-fold increase from 2002.

Why Is This Important?

China has firmly cemented itself as a major player on the world's economic stage, with its huge export market and increasingly potent tech sector. More so, many economists assume that the Renminbi -- the monetary currency of China -- will overtake the United States Dollar as the world's reserve currency in the next decades. 

When a country's currency is the world's reserve currency, as is the case with the US Dollar at the moment, all other countries need to stockpile that currency in order to do international trade. For example, petroleum trade is conducted in USD, even between countries that don't use the US Dollar as their own currency. If and when this occurs with the Renminbi, the world's focus will turn even further to China, and bolster its economy further. 

The Chinese Language

China is currently the largest owner of US government debt, and is making massive infrastructure investments all over the world, including Latin America, Africa and the Middle East. With this internationalization of the Chinese economy, the Chinese language is also becoming increasingly important as a language of trade and commerce. With over 1.3 billion speakers of Chinese (including all of its varieties such as Mandarin and Wu), Chinese is by far the world's most commonly spoken native language.

For companies dealing with Chinese clientele, it's paramount to interact with that market in its native language. Research has shown that approximately 71% of consumers prefer to shop in their native language when given the opportunity. This means that any business interested in accessing and succeeding in the world's second largest consumer market should seriously consider translation of its marketing materials, websites and product manuals. Additionally, in order to have intellectual property protection upon entering the Chinese market, it's paramount to properly trademark one's product. In turn, these patents need to be properly translated into Chinese to submit to the authorities. 

Looking closer afield, in 2019, Chinese investment into the United States was approximately 38.1 billion USD, and in 2015 in Canada, it was estimated at approximately 12.6 billion USD. In order to help set themselves apart from the competition, domestic companies trying to attract Chinese investment should also consider making Chinese language resources available.

Idiomatic USA has ample experience dealing with Chinese language services, including Cantonese and Mandarin, for a diverse clientele. With access to a large network of native-speaking interpreters and translators, Idiomatic is able to provide Chinese translation services for patents, websites, contracts and marketing materials. Do you want to delve into the Chinese market? Get in touch with us here.

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