Cross‑border restructuring offers a way to de‑risk supply chains, sidestep punitive tariffs, and build operational resilience without abandoning China entirely. It is not just moving factories from China to Vietnam or Indonesia. It requires a strategic overhaul of tax structures, legal entities, workforce plans, intellectual property arrangements, supplier networks, and leadership models. When done well, it shifts China’s role from a one‑dimensional manufacturing base to a high‑value node in a broader regional strategy.

Why companies are choosing restructuring

Over recent years, geopolitical tensions, especially US–China trade and export controls, have disrupted once‑stable global supply chains. Rising costs and regulatory complexity in China have meant many multinationals are reassessing their entire China footprint. Yet for most, exiting China is simply impractical: the supply‑chain ecosystem is highly specialised; infrastructure is world‑class; R&D capability remains strong; and the domestic market continues to grow.

Instead, cross‑border restructuring provides a more balanced path. Companies can reduce geopolitical exposure while retaining China’s strengths by shifting certain parts of production, typically low‑value or labour‑intensive activities, to ASEAN or South Asia, while keeping R&D, quality control or domestic sales operations in China.

What to keep in China and why

The first step is understanding which parts of the operation truly belong in China. For some businesses, China is an export hub. For others, it’s a domestic market centre, an innovation base or a quality control node. That functional mapping is essential. Labour‑intensive assembly might be moved offshore, but high‑value engineering, regulatory liaison or customer service may remain.

Downsizing China operations isn’t simple. Legal obligations under labour laws mean consultations, severance and possibly union involvement. Equipment sales or asset transfer may require local approvals, particularly in sensitive sectors. And shifting assets can trigger tax liabilities, companies must weigh exit costs against long‑term benefits carefully.

Sensitive relationships can suffer if the process isn’t handled transparently. Government incentives or supplier ties may be put at risk if local stakeholders feel blindsided. Clear communication and compliance are crucial to preserving goodwill.

Choosing a new host location with purpose

The decision of where to locate new operations goes far beyond low labour cost. Strategic choice today must consider trade agreements, regulatory alignment, infrastructure, talent pools, and industry‑specific incentives.

For example, moving final assembly to Vietnam or Malaysia can help firms meet rules‑of‑origin requirements for free trade agreements, qualifying goods for tariff‑free export to the EU or US. But achieving this advantage depends on genuine manufacturing value‑add, not merely repackaging.

Market access also matters: Indonesia may suit consumer‑goods businesses seeking scale, while Singapore could be preferable for regulated sectors needing compliance clarity. Infrastructure readiness varies, from ports to digital readiness, and needs to match sectoral demands.

Many emerging markets now offer sector‑targeted incentives, India’s PLI (Production‑Linked Incentive) for electronics, or Thailand’s R&D grants for biotech. It’s vital to assess these offers relative to specific company needs.

Structuring the new entity and planning the timeline

How new operations are structured affects control, regulatory exposure, and cost. Options include a wholly foreign‑owned enterprise (WFOE), joint venture, contract manufacturing agreement or strategic alliance – all with different implications for tariff control, governance and local compliance.

To qualify for tariff benefits under agreements like RCEP or CPTPP, companies need to ensure local transformation thresholds are met, not just shipment points moved. That shapes decisions around what functions to relocate and what suppliers to localise.

A phased rollout is often wiser than a big‑bang relocation. Pilot operations allow evaluation of delivery performance, compliance fit, quality standards and cost savings before full-scale implementation. Project timelines must reflect construction, licensing, recruitment, training and partner onboarding timeframes.

Tax, transfer pricing and fiscal design

Restructuring often reshapes where value is created, and that impacts tax. Multinationals must ensure operations reflect substance: functions, risks and assets must align with where profits are allocated to avoid transfer pricing disputes across jurisdictions.

China is increasingly vigilant about outbound restructuring, especially where high‑value functions or IP are shifted. Early engagement with local tax bureaus and careful planning of asset transfers, or equity restructuring, is key to managing capital gains exposure and compliance risk.

Transfer pricing models must be updated to reflect new functional roles. Suppose China becomes a limited‑risk distributor rather than the main manufacturer. Then profit allocation and intercompany pricing must align with legal reality, not just historic structure.

People, leadership and morale

The human side of restructuring is often underestimated. Talent is hard to replace, and morale can suffer if staff in China feel abandoned or insecure. Leadership continuity, internal communications, retention plans, or even relocation programmes, must be carefully managed.

Mobilising key personnel from China to the new site raises immigration, tax and cultural adaptation issues. Host countries may limit work permits or raise residency hurdles. Companies need clear plans and legal advice on visas, taxation and support for expat staff.

At the same time, building a skilled local workforce requires labour‑market mapping, training initiatives, localisation planning and collaboration with vocational schools or employment agencies.

Protecting intellectual property and data

Moving operations can expose IP and data to new risks. Protection regimes vary by jurisdiction, patent law enforcement, judicial capacity and digital data governance differ greatly. IP risk assessments should be specific to each location and business model.

Companies must decide whether to hold IP in China, in a regional headquarters, or a neutral jurisdiction, understanding the impacts on tax, licensing arrangements and exit liabilities. Licensing terms between entities need to be clear, reflecting royalty terms, legal risks, and control frameworks.

If operations shift to territories with weaker IP regimes, greater vigilance, not just contracts, is required. Partner vetting, in‑house retention of core know‑how and regional IP strategies help limit leakage.

Managing supplier and customer relationships through transition

Supply change disruption is a real danger. Long‑standing supplier ties and delivery expectations can be upended if operations move too quickly. Identifying sole‑source vulnerabilities or critical clients is essential before the transition begins.

Maintaining customer service levels during the shift requires interim logistics planning, buffer stock, possible dual sourcing and renegotiation of contracts to reflect new transit routes or import/export jurisdictions.

Proactive, transparent communication builds trust. Customers and suppliers benefit from clear timelines and commitment to quality. In some cases, joint planning with anchor suppliers or logistics partners can smooth the transition; others may mean onboarding new local sourcing partners in the host country.

When is restructuring the right move?

Cross‑border restructuring may sound complex, but it offers more than risk mitigation. For many companies, it is a strategic move designed to future‑proof operations in a world where agility and resilience matter as much as efficiency.

Businesses must assess their own vulnerabilities: Are specific tariff risks or export controls exposing particular product lines? Is there over‑reliance on a single site or region? Which functions are portable? Which need to stay in China? Will a partnership model or contract manufacturing serve just as well as full investment offshore?

Cost savings alone are rarely enough. Firms must weigh infrastructure limitations, legal unknowns, language or cultural barriers, and balance must favour long‑term operational stability over sheer low cost.

Finally, internal alignment is critical. Leadership must treat restructuring as organisational change, not just logistics: reshaping workflows, managing talent, and preserving morale during the shift, all while sustaining governance, communication and the integrity of service delivery.

The post What is cross-border restructuring? appeared first on Focus - China Britain Business Council.

When British electrotherapy device maker TensCare joined Tmall Global in 2018, they were well aware of the potential boost success in China could give to their business. Founded in 1994, TensCare is one of Europe’s largest manufacturers and distributors of transcutaneous electrical nerve stimulation (TENS) machines, a method of drug-free pain relief that uses mild electric currents to reduce pain signals. Another major area for TensCare, and one in which they have extensive expertise, is pelvic floor exercisers for continence management. In recent years, the company has branched out into aesthetic devices, for example, using light therapy to improve the appearance of acne.

Just four years on from their Tmall Global launch, China represents over 30% of TensCare’s business. Managing director Neil Wright spoke to FOCUS about TensCare’s rapid growth and how other SMEs should approach their China e-commerce strategy.

Get on the ground in China

As soon as TensCare made the conscious decision to enter the China market, they hired a native Mandarin speaker on the ground in China so they could start building a relationship with their trade partner and make sure that nothing was “lost in translation,” as Neil summarises. As a result, that strong partnership gave them access to actionable insights and market research that they used to tailor their product offering in China. Since they launched on Tmall Global, they have now opened an office in Shenzhen and employed a regional sales manager too.

Identify your strengths but remain flexible

TensCare is best known in the UK for pain management and postpartum recovery devices. They know their customer and their customer knows them. TensCare has a “… heritage of talking to mums and talking to mums at an important time of their life,” Neil says. Their previous market research found that 100% of mums who used their post-partum products remember the product and where they had bought it. 

In China, although their target customer is the same, their product offering is different. On the basis of Tmall Global’s consumer analytics, which showed that new mums in China were concerned about recovering their appearance after giving birth, they switched the spotlight to aesthetic-focused devices, a product category they had only recently introduced in the UK market. Their best-selling product in China is now the Beauty Max, an electro-muscle stimulation device for the face that reduces the appearance of fine lines and wrinkles. “The beauty side of our business was very much a niche product that has become one of our best-selling products.”

Neil’s number one piece of advice is to remain adaptable. That does not necessarily mean creating new products for the China market, but rather finding ways to adapt existing products and strategies based on local insights

TensCare’s Beauty Max on sale on Tmall Global during the 618 shopping festival in mid-June

Showcase your expertise

Smaller companies can be intimidated by the sheer scope of the Chinese market, but as Neil points out, a lack of awareness of foreign brand names means that “even the big players are small players.” Size is less relevant than brand heritage and expertise, and TensCare’s 25-year history and extensive research into how and why people use their products has been a boon in that regard.

To make sure that Chinese consumers understand the brand’s products and technology, TensCare works closely with influencers in the maternity and health and beauty sectors, as well as Alibaba’s live streaming tools and other social media to create engaging, educational content. Neil points to their relationship with their local partner being helpful in this area as well, especially when it came to translating the tricky technical — and often highly personal — functions of products such as the pelvic floor exerciser.

As many companies will no doubt already be aware, it pays to stay plugged into new trends in the e-commerce market, as well as the shopping festival calendar, such as Single’s Day or 11.11. “That’s when we look to key product launches or major promotional activities,” Neil says. During the Single’s Day shopping festival, the company introduced gift packaging, as shifting to the aesthetic device market allowed them space for giftable elements. However, normalising the conversation around their pelvic floor devices via live streams and KOL-led videos has also meant they have been able to create gift packaging and gift sets around those products. 

Adapt, adapt, adapt

Neil’s number one piece of advice for UK consumer goods makers looking to try e-commerce in China is to remain adaptable. That does not necessarily mean creating new products for the China market, but rather finding ways to adapt existing products and strategies based on local insights. “Give it [the China market] a go, be adaptable, and be ready to scale up.”

The post How to adapt your business for China’s e-commerce market appeared first on Focus - China Britain Business Council.

Why should I sell to China?

China’s market is huge and growing rapidly each year. As an example, during one of China’s biggest shopping holidays that happened earlier this month, known as Single’s Day or Double 11, Alibaba reported more than RMB 498.2 billion (£58 billion) in sales, which was nearly double the sales achieved during Double 11 last year (RMB 268.4 billion / £30 billion).

How can I sell into China?

There are many ways to sell to China depending on how invested you want to be and how quickly you want to move, but for a quick, low cost and low-risk method, trying via cross-border e-commerce is the simplest. And Single’s Day is a testament to that fact. For the majority of categories, brands should look to leverage e-commerce as their starting point.

What are the three most important factors to understand before market entry?

Understand your category opportunity. Don’t throw your money down the drain. Social listening and e-commerce data mining are inexpensive and can give you a deep dive into your category, product pricing, category saturation/competitors, opportunity, and consumers. Simple research will show you which categories or sub-categories are currently trending in the market. As an example, men’s skincare has been seeing surges in growth, with a 260% and 245% year-on-year increase for men’s lip care and men’s facial scrub respectively.

Understand your platforms. China has a plethora of different social platforms; starting out on the wrong one can have devastating effects on a brand, leading to brand dilution and wasted investments. Different platforms are more effective at either brand awareness or conversion to sales, understanding which platforms are best for which type of marketing activity will help brands to succeed.

Understand your brand’s current digital presence and online mentions. Look through Chinese social platforms such as WeChat, Little Red Book and Taobao, to understand the reputation that your brand has online and how widespread brand awareness currently is.

What are the different routes I can choose to follow when entering the e-commerce market?

Brands can choose to go the cross-border route or the domestic route, and have the option of going through private channels or public channels. Understanding the limitations and benefits of each channel is important to establish an overall market entry strategy.

When is the best time to launch a brand in China?

If brands are looking to enter China, then Q1 is likely to be the best time to do so. The retail season properly starts after the National Holiday and runs into Chinese New Year. After entering the market in Q1, the 6.18 mid-year festival, another one of the largest shopping festivals of the year, would be the perfect tester for the brand.

What are some of the difficulties that come with trying to enter the China market through e-commerce?

Building up your ambitions in e-commerce from concept to reality requires investments of time, resources and money. Market entry into China is costly and there are a number of factors that brands must consider in terms of budgeting for the market, such as regulatory compliance, intellectual property management, platform costs, working with agencies, and marketing expenses.

What is a trend in e-commerce that has become extremely popular recently?

E-commerce live streaming has become hugely popular, especially since the Covid-19 pandemic. This year, live streaming sales reached an estimated RMB1.05 trillion (£120 billion), and Viya, one of the top live streamers in China, alone sold more than the entire revenue of Carrefour China. That being said, competition can be extremely fierce when it comes to live streaming. If a brand does not have current awareness in the market, then they will often struggle to sell.

The post Why and how to sell to China on cross-border e-commerce appeared first on Focus - China Britain Business Council.

When James Love was looking to expand his client roster to gain some Chinese clients, he bypassed the big cities of Beijing and Shanghai. Instead, the partner at law firm Womble Bond Dickinson took the initiative and reached out to 16 businesses in China’s smaller second-tier cities. “Because I was going outside the well-trodden paths, I got a very warm welcome,” he explains. Love says he was welcomed with open arms. In fact, ten of the businesses met with him and four went on to become his client.

As a service provider, Love says that his personal visits to China enabled him to build relationships that ultimately led to his success in finding long-term clients and partners.

Having a physical presence in China is very important. Often more so than many other territories because of the cultural value of face-to-face meetings and relationship building. For Ian Patterson, the quickest and easiest way to get on the ground in China for his company CoolLED – an LED illumination system – was through CBBC’s Launchpad Service

The Launchpad service employs a dedicated project manager in China that can hit the ground running, whilst the company undertakes the steps required to establish its own wholly foreign-owned enterprise (WFOE) in China,

Denby Pottery opened an office in Shanghai earlier this year after learning from experiences in the UK and South Korea. “We had to build a specific strategy for the China market,” explains Emma Zhou, Denby Pottery’s business development manager for China. It is essential to be flexible and adapt your market entry plan, she says.

Whilst opening a store or an office is a procedure many companies have to go through, finding and securing a trusted partner is in many ways much harder. Personal connection, mutual trust and commitment to the China market are essential for a strong and successful partnership.

Jack Porteous of Samarkand Global – a company connecting British brands to Chinese consumers – credits a strong foundation of trust with partners as being something that can help companies working internationally to weather crises such as Covid-19. Samarkand Global Limited has a team of 25 based in China to manage sales and customer service.

Mutal trust is incredibly important, says Patterson, especially when collaborating internationally. “You need to walk the walk with your resellers and prove that you are capable of supporting them even at a distance,” he says. “And it’s also important to be able to react quickly, as slow response times can leave a partner feeling unsupported and can ultimately erode trust,” he says.

It’s important to be able to react quickly, as slow response times can leave a partner feeling unsupported

Organisations including the CBBC run trade missions that introduce British companies to potential Chinese partners, and while these can save a lot of time and add a huge amount of value, they are often the first step on a long journey. Individual travel and one-to-one meetings are essential in the follow-up for both sides to learn more about each other and build trust.

“It’s a two-way selection,” says Zhou. “Companies looking to enter the China market need to find out who is reliable and responsible and who actually has the power to help you build your brand in China, as everyone is promising you the whole world,” she says.

In addition to identifying the key partners needed to get your business off the ground in China, it is also important to localise your customer service offerings when setting up in a new market.

“The differences between expectations in China and the UK, is that in China there’s a lot of pre-sale customer service that’s required, in addition to the usual after-sale support expected in the UK,” says Porteous.

After-sale support can also look different when operating internationally. CoolLED has set up stock reserves in China so that its resellers have rapid access to replacement devices, a move which both ensures clients are satisfied and proves to partners that their UK counterpart can be trusted to deliver, says Patterson.

Selling in China has also been influenced in recent years by the rise of e-commerce – something that’s become even more important following the outbreak of Covid-19. It is common for consumers in China to scout out products in brick-and-mortar stores before searching for the best prices online. However, the lockdown following Covid-19 has deprived consumers of these opportunities and caused a hit to sales for consumer goods such as perfume, which rely heavily on physical interaction during the purchasing process.

Denied the opportunity to try out products in-store, consumers are unwilling to take the risk of making a purchase and finding that they do not like the product. However, brands are finding innovative ways to try and de-risk purchases for consumers.

In China there’s a lot of pre-sale customer service that’s required, in addition to the usual after-sale support expected in the UK

One example of de-risking consumer purchases might be to develop sample-sized perfumes at a low price, with the logic that “people can try it low-risk, low-price, and then hopefully come back and buy a bigger full-price option a bit further down the line,” explains Porteous.

The impact of Covid-19 has further accelerated consumers’ reliance on recommendations by key opinion leaders (KOLs), says Porteous. Influencers are just one of the ways in which e-commerce is tied to social media as part of China’s emerging social commerce phenomenon: companies can also get in on the action by developing their own social media presence in China to communicate not only with potential customers but also with other industry experts and partners.

Patterson’s company, which produces specialised, high-tech equipment and would not traditionally be expected to have a social media presence, has nonetheless invested time and resources into developing its digital channels. By posting translated industry-specific content and thought-leading material that isn’t just product-based, CoolLED has been able to engage industry stakeholders on a broader level and start a discussion on how its products fit into the wider industry, as well as relevant topics such as sustainability.

Denby Pottery is also expanding its social media presence to try to further add digital touchpoints.  “Pottery and ceramics typically require in-person interaction with customers,” says Zhou. “It is only through holding and feeling a product that the customer can fall in love with it” she adds. Denby Pottery, therefore, focused first on developing the experience of shopping in-store and is now using social media to advertise this experience and tell its story online. “This demonstrates our authenticity and develops digital touchpoints that are still focused on the experience and the products’ key selling points,” she says.

Covid-19 is accelerating the development of digital services such as virtual trade missions, meet-the-buyers, and meetings but it will still be important for businesses to travel to China in person to demonstrate their commitment and develop relationships with partners once international travel restrictions have been lifted.

However, the dominance of e-commerce is a trend that had been building even before the world entered lockdown conditions and looks set to continue on an upward trajectory moving forward. Companies looking to maximise cross-border sales can learn from some of the tactics employed by international brands during Covid-19 in order to develop long-term e-commerce strategies that can continue building their business from a distance.

The post How British companies find clients and partners in China appeared first on Focus - China Britain Business Council.

There are many ways of sourcing materials or products from China that can if tackled successfully, give UK businesses an edge. The different methods each offer a range of advantages and disadvantages.

Online: Websites such as Alibaba offer a searchable service that allows you to find suppliers for free. However, whilst ideal for finding benchmark prices, without visiting suppliers in person and seeing their facilities, it is an unreliable means of developing a solid relationship.

Social Media: Sites such as LinkedIn enable buyers to find suppliers but, again, building trust will be difficult.

Trade shows: There are a number of major trade shows such as the famous Canton Fair in China and the Spring Fair in Birmingham. Face to face meetings and seeing products in the flesh is a great way to meet potential partners and will often be worth the investment of time and money.

CBBC: CBBC provides a supplier and sourcing service where CBBC staff will shortlist potential partners, vet them and provide you with their contact details.

Specialist sourcing firms: Whilst they can offer more detailed vetting and more options, specialist sourcing firms can prove costly as they will be acting as an intermediary. 

Managing the relationship

Finding a supplier that you can work with is, of course, only the beginning. As you work together, it is important to manage the relationship that develops by being aware of key factors.

Your importance to them: If you’re only looking to source a hundred products then you are likely to be fairly low on the list of priorities for a major manufacturer. Do they have Minimum Order Quantities and can you meet them? If not, you might want to find a partner to reach those numbers. Larger orders will also often reduce shipping costs per item. And remember that if you need specific tooling or training to make your product then costs will also rise.

Importance of face to face meetings: It is essential to have a strong relationship between the two businesses and this can only be achieved with regular face to face meetings.

Quality Control: Whilst your supplier will have quality control responsibilities it is important to get an independent party to monitor your products. Any disputes will be much easier to resolve if independently verified.

Maintain relationships at several layers: By having a relationship with directors, managers and other staff you will avoid relying on just a single partner at a company, whilst having a better understanding of where the power in the relationship is held. Always keep communication open.

Putting together a contract

Make sure you have contracts in place for every stage of the process and that these are legal and enforceable in Chinese courts. Whilst much of these may be industry-specific, some issues need to be considered regardless of what you are importing.

• Will you have exclusivity on the design or a specific range?
• Who owns the moulds and tooling?
• What is the warranty period if a product breaks?
• What percentage of faulty goods is acceptable?
• Who is liable for faulty goods?
• Ensure that the port of delivery is specified
• Always ensure your trademarks and IP are protected and that you have your trademarks before you start manufacturing in China.
• Getting professional legal help at this point is essential.

Arranging payments

Ensure that payment terms are clearly expressed in any contract. The supplier will want a percentage paid upfront so don’t expect them to take on all the risk.

Payment can be complex when dealing with exchange rates and overseas transactions, and companies like Ebury can arrange international payments whilst handling currency exchange risk. They also can provide trade finance, helping you out if, for example, you have orders of £500,000 but only £100,000 in the bank.

The post Importing from China: Due diligence, solid contracts and effective finance management appeared first on Focus - China Britain Business Council.

It will ensure that the current policies on CBEC retail imports will continue and no requirements in licensing, registration or record-filing for first-time imports will apply to retail imports through CBEC platforms. Instead, these goods will receive more relaxed regulation as imports for personal use. The policy will be extended from the existing 15 cities to another 22 cities, which have just established comprehensive CBEC pilot zones.

The limitations for single purchase via CBEC will be increased from RMB 2,000 to RMB 5,000

The limitations for single purchase via CBEC will be increased from RMB 2,000 to RMB 5,000 and the yearly purchase amount is increased from RMB 20,000 to RMB 26,000 per year. Within the limitation, customers are exempt from duties and will only be required to pay 70 percent of (consumption tax + VAT).

Furthermore, products including cosmetics, health food and infant formula will not require compliance with Chinese regulations via CBEC. Specifically, this means that no product registration. filing or certification are required to sell through CBEC.

“Boosting cross-border e-commerce will contribute to high-level opening-up. It will promote steady growth in foreign trade, drive consumption and create jobs,” Premier Li said. “We need to take a holistic approach, exercise prudent yet accommodating regulation to fully unleash the growth potential of cross-border e-commerce.”

For more information on e-commerce and retail please contact Antoaneta.becker@cbbc.org

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