How to Build a Business in the New Reality of the Chinese Market

Photo by Alexander Ryumin, TASS photohost agency

At the international SPROUTS Business Forum in Kazan, Prof. Natalya Guseva of HSE University, Head of the ‘Eastern Perspective: Doing Business in China in Practice’ educational programme for entrepreneurs and managers, delivered a keynote address entitled ‘Competing with China: Why Old Skills Are No Longer Enough’ during a Russian–Chinese business session. Her talk attracted a large audience of business representatives, exporters, and government officials.

Natalya Guseva emphasised that today, Russian companies aiming for success in China or competing with Chinese players on global markets face not merely cheap products, but entire ecosystems. These comprise ultra-rapid iteration cycles, flexible production networks, and deep digitalisation. ‘We are no longer competing with individual Chinese companies,’ she noted. ‘We are competing with their ecosystems, their speed of adaptation, and their ability to shift production instantly. Old reflexes—undercutting on price, finding a single distributor, memorising a couple of cultural rules—no longer work.’

Natalya Guseva

© HSE University

The professor drew particular attention to three key shifts shaping the current landscape.

The first is tariff pressure. The EU has introduced definitive anti-dumping duties on Chinese electric vehicles—up to 35% on top of the basic 10%—while the United States has sharply raised tariffs on a range of Chinese goods. In particular, the so-called Section 301 tariffs (under the US Trade Act), a tool of American trade law used to restrict countries whose trade policies Washington deems harmful, have been increased to 100% on electric vehicles. Tariffs on batteries and semiconductors have also been raised, directly affecting profitability and localisation strategies.

The second shift is the China+1 strategy. This business model entails risk diversification by relocating part of production from China to other countries, most commonly in Southeast Asia or India, to avoid dependence on a single manufacturing base. Brands such as Apple are actively shifting part of their production to India and Southeast Asia, thereby creating alternative supply chains.

The third is the ecosystemisation of consumption. Without a presence on WeChat (which has 1.385 billion users) and other platforms such as Douyin, Tmall, and Xiaohongshu, a brand effectively becomes invisible.

‘Price is no longer a strategy. Victory belongs to those who scale and adapt faster,’ Natalya Guseva explained. ‘Tesla Giga Shanghai now produces more than half of the company’s global output and has already exported a million vehicles. This is not about discounts, but about rhythm, logistics, and efficiency.’

The professor presented a new set of competencies essential for competition: from ecosystem-based go-to-market strategies (GTM) and China+1 supply chain management to co-R&D with local partners, built-in intellectual property protection and digital diplomacy. She highlighted examples of successful Russian engagement: RUSAL obtained the world’s first foreign Chinese certificate for ‘green aluminium,’ opening access to environmentally conscious clients, while Russian goods in live-stream sales on Chinese platforms reach more than 100 million yuan in a single session.

Natalya Guseva urged businesses to abandon template thinking. ‘The winner is not the one who merely knows about China, but the one who can integrate China into their system—and update it swiftly,’ she concluded.