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Doing Business in China: Not Your Father’s Office — How China’s Workspaces Grew Into the 21st Century

By Doug Young

(Beijing) – “An office by any other name is still an office.”

That line may have worked for Romeo, Juliet and their roses, but their modern contemporaries would hardly have recognized anything called an office in China as recently as 30 years ago. Of course, much has changed since then, and now China’s top-tier cities are brimming with a huge range of office spaces far more diverse than anything in most Western countries, from top-notch class-A offerings all the way down to dank enclosures in converted old buildings.

That presents a challenge for foreign businesses looking to set up shop here, especially smaller ones that may not have budgets for prime space in Beijing’s Central Business District or Shanghai’s Lujiazui financial area. That said, I wanted to focus this week’s column on some of the options out there for smaller businesses and entrepreneurs just starting out, following my own experience sampling some fairly well-designed and affordable spaces in my former home in Shanghai.

Before I embark on that trip, I have to comment briefly on how vastly different today’s China is from the place I first experienced during a two-year stint in Beijing in the 1980s, including my first journalism job as a news assistant for two foreign correspondents. One of their apartments in the Jianguomen Wai diplomatic compound functioned as our office back then, since they really didn’t have much staff beyond me, a translator and a driver. Those compounds also had reasonably good infrastructure, like phone lines and reliable power sources, something that was much patchier outside.

My other part-time job was working at a trading company, Chindex International, which is still around today and runs a number of state-of-the-art medical facilities across China. But back in 1987, the company was quite typical of foreign firms in China, with our office in a musty annex of the Xiyuan Hotel near the Beijing Zoo. It always felt a little strange working in such offices, where desks co-existed alongside beds and sofas, and floors were covered with rugs that seemed more suited for living rooms than work areas.

Back then, most offices used by local Chinese work units were in low-level, dank and musty cement and brick buildings where everything seemed worn out and workers were frequently absent. In the Beijing of that time, the tallest building was the Friendship Store-adjacent Citic Building on Jianguomen Wai, which opened in 1985, and at around 30 stories high was one of the city’s only structures that resembled a modern office building.

Fast-forward to the present, when a wide array of options are available for both Chinese and Western businesses. During my six-year tenure in Shanghai through last year, I was impressed by the growing number of Western-quality, creative-type spaces catering to younger entrepreneurial types, including both shared work spaces and more-traditional offices.

I visited one such office a couple of years ago in an old converted building on the banks of Suzhou Creek, which was home to a young company that was doing some search-engine optimization work for me at the time. In a recent conversation, the company’s owner, Olivier Verot, was generally quite positive about the space, which cost 16,000 yuan ($2,340) per month for 80 square meters.

He advised anyone looking for similar situations to make sure to find a good agent who understands your needs, and have a Chinese partner negotiate on your behalf. He also noted the building manager was relatively good about taking care of daily issues and maintaining a good work environment, in contrast to state-owned older buildings that seem in constant need of a good cleaning. But he did note that occasional issues still occurred, like the time his office went for several days without air conditioning in the middle of one of Shanghai’s blistering summers. Such is the price of being an entrepreneur.

For companies wanting more flexibility, another new generation of shared and flexible work spaces is also rapidly moving into the local office scene. One of those, WeWork, made headlines last year when it got $700 million in funding from two Chinese groups, including hotel operator Jin Jiang.

Since then, WeWork has steamed full speed ahead into the market, and now has four locations in Shanghai, with a fifth set to open soon. It has two more offices in Beijing, with a third near opening. There’re all sorts of pricing and photos available on the company’s site, wework.com. But to give an idea, hot desks in both cities start at around 1,800 yuan per month, while dedicated desks cost 2,300 yuan and up, and private offices start at 3,500 yuan.

For anyone unfamiliar with these places, they often contain big common areas with coffee bars and casual meeting spaces, like a big Starbucks, along with private meeting rooms and all kinds of other work and leisure spaces. I was impressed by another such space called the Naked Hub last year, which was founded by some foreign entrepreneurs and now has eight locations in Shanghai and another two in Beijing. Their prices look pretty similar to WeWork, and locations are also equally attractive.

My contact who works at Naked Hub, solar entrepreneur Alex Shoer, was also quite positive about the experience, saying such spaces not only provide affordability and flexibility, but also opportunity to network with other entrepreneurs. Such networking even resulted in some new business for him, as the Naked Hub owner recently agreed to work with Alex’s Seeder Clean Energy to finance and install rooftop solar power systems on 30 villas at his company’s resort in nearby Zhejiang province.

Suffice to say that I’ve been impressed with both the office factory and more traditional creative office concepts these last few years, and hear such spaces are rapidly multiplying in major Chinese cities with the help of both foreign and local operators. They’ve certainly come a long way from my Beijing of the 1980s, bringing some new and much-needed energy to these cities’ entrepreneurial cultures.

Doug Young has lived in Greater China for two decades, including a 10-year stint at Reuters, where he led China corporate news coverage. Send your questions or comments to DougYoung@caixin.com.

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