China’s vast market presents an enticing opportunity for Nordic companies, particularly those in the B2B technology and sustainability sectors. However, it also poses unique cultural and strategic challenges. Although Nordic firms are renowned for their innovative, high-quality solutions, many struggle in China due to misaligned approaches.

To succeed in China, a good product is not enough; cultural alignment, local relationships and strategic adaptability are also required. This guide highlights some of the cultural differences, operational hurdles and strategic blind spots that Nordic business leaders must address to transform China's complexities into a competitive advantage.

Cultural differences: building trust and guanxi in B2B

For Nordic companies, entering the Chinese market means adjusting to a business culture in which trust, hierarchy and relationships play a far greater role than they do in the Nordic countries. Deals tend to develop gradually, often beginning with informal conversations and social interactions rather than negotiations. Building personal rapport and credibility is a prerequisite, rather than a by-product, of doing business.

The concept of guanxi (关系), or relationship networks, is central. Understanding mianzi (face), indirect communication and hierarchical decision-making processes is equally critical. Missteps in these areas can slow negotiations or undermine trust.

For Nordic companies accustomed to flat structures and direct dialogue, China’s relational approach may feel unfamiliar, but adapting to it is essential. Some key cultural differences that impact Nordic B2B operations in China include:

Relationship over contract
In the Nordic countries, business is usually straightforward, with trust being built through performance. In China, however, personal rapport and informal networks often take precedence over formal contracts. A Chinese partner will want to get to know the people they are dealing with on a personal level. This may involve sharing meals, socialising and exchanging gifts (within legal and ethical limits) to strengthen the bond.

Communication style
Nordic communication is typically direct and low-context – say what you mean. In contrast, Chinese communication is high-context and indirect, relying on reading between the lines. A Chinese partner may not explicitly say 'no', even if they disagree. Instead, you may hear a polite 'we'll consider it', or notice non-verbal cues of hesitation.

Nordic teams must learn to listen carefully and choose their words carefully. What may be perceived as transparent communication in a Danish boardroom could be considered rude or too blunt in Beijing. Adopting a more nuanced communication style — and perhaps learning a few phrases of Mandarin, or hiring interpreters — is crucial in order to avoid misunderstandings.

Hierarchy and decision-making
Most Nordic firms pride themselves on flat structures and empowerment. In China, however, corporate structures are often more hierarchical, and deference to authority is expected. Decisions may be escalated to senior management even when negotiating with someone at your level. This can be frustrating for a Nordic team expecting quick answers. It is important to show respect for the hierarchy, for example by addressing the senior leader first, using titles and understanding that a 'yes' at one level may still require approval from above. Expect longer sales cycles involving multiple approvals. One CEO of a Danish exporter quipped that, in China, 'every sale is a marathon, not a sprint'. Maintaining patience and demonstrating commitment over those long cycles will set you apart from competitors who give up too soon.

Trust-building activities
What may appear as non-business 'extras' in the Nordic countries are often integral to business in China. Sharing meals, engaging in small talk about family or local culture, and participating in business dinners and banquets are not wasteful diversions, but rather opportunities to cement trust. Chinese businesspeople often judge your reliability based on how well they know you personally. Nordic firms should budget time and resources for relationship management (guanxi), just as they do for technical training or product development. This cultural investment pays off: once you are in someone’s trusted circle, loyalty can be strong and partnerships can be very enduring.

Localization beyond B2C: adapting tech and sustainability solutions

In China, localization is often associated with consumer brands, involving adapting to local tastes, translating packaging and adjusting price points. However, in the B2B, technology and sustainability sectors, localisation is equally essential, albeit in a more structural sense. Nordic firms entering China must adapt not just their communication strategy, but also their product offerings and delivery methods. China's industrial landscape, procurement norms and policy environment can differ radically from those in the Nordic countries. What wins customers in Stockholm or Helsinki may fall flat in Shenzhen.

In the B2B sector, localisation involves reconsidering product specifications, regulatory compliance, service models and go-to-market strategies. For sustainability firms, China's policy priorities, such as carbon neutrality, water scarcity and industrial efficiency, can significantly impact demand. Aligning your solution with these national goals is not just smart positioning; it is often a prerequisite for gaining traction.

Product and solution adaptation
The needs of Chinese industrial buyers and end users differ from those of European clients. This could be due to factors such as scale (Chinese projects are often larger), operating environment or cost constraints. It is easy to assume that a top-of-the-line Nordic solution will win on quality alone. Often, Chinese customers are looking for 'good enough' products at a competitive price – a market in which domestic suppliers are very strong.

To hit the sweet spot, Nordic firms may need to create China-specific product lines or service packages. For example, the Danish pump manufacturer Grundfos, which has a strong presence in China's premium segment, was losing ground in the mid-range to local competitors offering 'good enough' pumps at half the price. Rather than conceding this market, Grundfos launched Emerco, a China-specific, mid-tier sub-brand sourced primarily from local suppliers and priced 20–30% lower. This move preserved its premium positioning while opening new volume channels.

The lesson to be learned here is that adaptation can mean redesigning your value proposition; smaller, simpler or more cost-efficient versions of your technology may be required. For example, Nordic sustainability start-ups might find that Chinese customers prefer a modular, easily serviceable product to the cutting-edge (but complex) version sold in Europe.

A willingness to innovate 'in China, for China' is often a hallmark of foreign companies that succeed. In fact, Finnish elevator giant KONE became China’s market leader by developing products for the Chinese market – adapting features, safety standards and design to local needs. This localisation strategy now generates over €3 billion in annual revenue, accounting for 30% of KONE’s global turnover in the world’s largest elevator market.

Local regulations and standards

Adherence to Chinese standards is non-negotiable. This encompasses not only government policy, but also technical standards such as electrical voltages, internet protocols, green building certifications, calibration standards and data reporting formats, as well as industry-specific norms. For example, a clean-tech firm entering China might find that the materials in its product require certification from a Chinese testing body, or that its software must integrate with local platforms. These are localization steps that are easy to underestimate. To prevent costly delays, one practical step is to hire local consultants early on to identify any differences between your product and Chinese requirements.

B2B marketing and sales localization

Unlike in Europe, where LinkedIn or email might suffice for B2B outreach, Chinese business development should leverage Chinese digital ecosystems. The most important of these is WeChat, China’s popular messaging and social media app, which also functions as a professional networking and marketing platform. Short videos on Douyin (TikTok) or participation in local trade shows (now often hybrid offline-online events) can also be crucial for B2B.

Furthermore, case studies and references carry significant weight; Chinese clients often require evidence that your solution has been endorsed by other companies in China. Some early Nordic entrants have partnered with a reputable local customer to secure a 'reference project' that can be used to build credibility. Essentially, localisation in B2B means speaking the customer’s language, both literally and figuratively. This may involve translating technical documents into Mandarin with careful attention to cultural nuances (a literal translation may be ineffective) and adapting your sales pitch to address the specific pain points of Chinese customers (which may differ from the priorities of European clients).

For instance, an IoT company discovered that its European pitch of 'labour cost savings via automation' was less effective in China, where labour is cheaper. The company therefore reframed its value proposition to align with the interests of Chinese factory managers in real-time data and AI analytics.

Differentiate from consumer localization
It’s worth noting that localising industrial or tech offerings differs from localising consumer products in one important way: the end-user experience may be less important than factors such as price, ROI and guanxi. For example, a Chinese factory purchasing a machine from a Nordic supplier may not care about the machine’s colour or an appealing brand story, but they will care about after-sales support, training in Chinese and assurances of a long-term supply of parts. This could involve setting up a local service centre, recruiting Chinese support engineers, and offering user interfaces and software in Chinese.

KONE's approach is again instructive: they established a nationwide presence in China, from tier-1 cities to tier-4 towns, not only for sales, but also for service coverage. This enabled them to be 'close to the client' both geographically and culturally.

Navigating regulations, compliance and state influence

China’s regulatory landscape is a critical factor for any foreign business. While it presents obstacles, it also provides direction. The government’s five-year plans and industrial policies often indicate where funding, approvals and demand will be concentrated. Nordic companies, particularly those specialising in sustainability and advanced technology, are well-placed to align with China’s climate, energy and industrial transformation goals.

Those who treat regulation as a strategic input, rather than an afterthought, stand a better chance of succeeding. Adapt early, engage with the government proactively, and design for compliance from the outset.

Regulatory compliance

China’s regulations are extensive and evolve quickly, often being industry-specific. Product certifications, import controls, data security laws and environmental standards may necessitate substantial adjustments. For example, a Norwegian biotech product may require local clinical trials and a separate approval process. Similarly, a Finnish SaaS provider may be required to host user data on Chinese servers in order to comply with localisation laws. These aren’t mere technicalities – they can determine the success or failure of your business.

Failure to comply can result in fines or even business closures, and there is little tolerance for mistakes. Nordic companies should therefore plan for compliance early on, allocating time, legal advice and resources to ensure that their offerings align with Chinese regulations and standards. Preparing Chinese-language documentation and securing local certifications should be seen as entry requirements, not afterthoughts. Bureaucracy and government engagement are also important considerations.

Setting up operations can involve multiple approvals, stamps and manual processes. Having a strong local team or partner can help you to navigate the system. Engaging with local authorities and aligning your solution with city- or province-level goals is also important. Demonstrating how your product supports national priorities, such as smart manufacturing or carbon neutrality, can ease regulatory friction and open doors.

Bureaucracy and local engagement

Beyond formal legislation, foreign firms often encounter administrative bottlenecks when setting up entities, registering IP or participating in tenders, as these processes may require multiple layers of approval. For example, government 'chops' (official stamps) may be required on every page of a contract, and processes that are digital in the Nordic countries may still be paper-based in China.

Working with a capable local partner or building a strong in-market team can help to navigate this complexity. So does government engagement. Aligning with national or local development goals, such as smart manufacturing or low-carbon urbanisation, can foster goodwill and reduce friction. For example, participating in municipal forums or pilot projects can increase visibility and facilitate smoother entry.

Selling to state-owned enterprises

State-owned enterprises (SOEs) control substantial procurement budgets in sectors such as energy, transport, heavy industry and infrastructure. Securing a contract with an SOE can be highly advantageous, but requires a different approach. SOEs value alignment with government goals and a proven long-term commitment, and they often prefer localised offerings. Partnerships, joint ventures or technology transfer arrangements are sometimes expected.

Decision-making is also more layered. Technical teams, procurement officers and senior leadership all play a role, and each group has different priorities. Building relationships at all levels is important, and Nordic firms should be prepared for lengthy sales cycles, high service expectations, and the need for a local presence.

Hiring and leadership: the local team advantage

Talent and leadership are essential for success in China. For Nordic companies, this means doing more than just deploying staff from the head office; it means building a capable and trusted local team that can navigate the cultural and operational realities of the market.

Local leadership matters

Rather than relying solely on expats, hiring Chinese managers can accelerate relationship-building, reduce missteps and demonstrate a strong commitment to the long term. Local leaders understand the unwritten rules, manage stakeholder expectations more effectively and can navigate China's complex environment more quickly. KONE’s success, for instance, was partly due to its highly localised leadership structure and talent pipeline.

That said, many Nordic SMEs benefit from initially hiring an experienced expat to establish operations and transmit culture, provided there is a clear plan in place for transitioning to local management. The most effective leaders are often returnees or bicultural professionals who can bridge the gap between Nordic and Chinese expectations.

Blending cultures

Values such as transparency, flat hierarchies and work-life balance, which are associated with Scandinavia, can differentiate you – but only if applied with cultural sensitivity. While Chinese staff may value empowerment and open dialogue, they also expect structured mentorship, clear career progression, and visible leadership. Don't assume that Nordic models will transfer seamlessly; adapt them where necessary to maintain engagement.

A hybrid approach works best: preserve core values, but respect local preferences. For instance, encourage team input, while also recognising norms around deference and group cohesion. Achieving this balance helps to build trust and improve retention in a competitive labour market.

Retention and development

China’s talent market, especially in tech, is fast-moving. Nordic firms must invest in development as well as recruitment. Providing training, clear career progression opportunities and even exchange programmes with the head office can boost loyalty and performance. Building a distinctive employer brand centred on Nordic values and purpose also helps to attract talent seeking more than just a transactional job.

HQ / China alignment

There must be constant, structured and culturally attuned communication between HQ and the local team. Time zone differences, language barriers and varying customer expectations can lead to misalignment. Regular updates, shared tools such as WeChat or Teams, and a culture of trust and empowerment are key.

China moves fast. Rigid approval processes at HQ can jeopardise deals. Give the China team clear decision-making boundaries and room to act, particularly with regard to sales, pricing, and partnerships. Trust, a hallmark of Nordic leadership, should be extended to local teams as a strategic asset.

Conclusion: Common blind spots and strategic missteps to avoid

Even the most seasoned international executives will find that expanding into China involves a learning curve. Based on the themes discussed and case studies presented, here are some common pitfalls that Nordic companies should be aware of:

• Overlooking cultural dynamics: Trust, guanxi and relationship building are not soft skills – they are hard prerequisites. Approaching China with a purely transactional mindset or assuming that a great product alone will sell is a critical mistake.
• Copy-pasting the home strategy: What works in the Nordics often doesn’t translate. Whether it's pricing, product design or sales channels, localisation is essential.
• Choosing the wrong partner – or none at all: Partnerships can accelerate entry, but only if they are well aligned. Rushed deals or a poor fit can damage your brand and stall your progress. Do your due diligence, align incentives, and build trust at multiple levels.
• Ignoring policy signals: Regulations and industrial policy shape demand. Whether it's data localisation, carbon goals or procurement criteria, aligning your offer with government priorities is not optional – it's a strategic imperative.
• Mismanaging HQ China alignment: Many setbacks stem from miscommunication between HQ and local teams. China requires faster decision-making, deeper investment and greater autonomy. Set clear guardrails, then trust your in-market leadership to act.
• Short-term thinking: China rewards consistency. Expect longer sales cycles, upfront investment and a lengthy ramp-up period. Firms that treat China as a long-term strategic market, rather than a quick revenue play, build a lasting advantage.

Shaeps can help you navigate the complexity. Reach out here.