Breakfast with China Video Conference

More than 30 individuals, representing 28 regional businesses and agencies attended an informative live video conference from China entitled: Breakfast with China and sponsored by George Hiller, International Business Development Manager, Southwest Virginia Higher Education Center in Abingdon, Virginia, on Thursday, July 31, 2003. On hand in Abingdon was Helen Lindsay Peterson, Principal Commercial Officer from the U.S. Department of Commerce’s Commerce Service in Chengdu, China.

Overview:

Since 1990, U.S. exports to China have grown almost 12% annually.

However, companies wishing to enter the China market need to make certain that an existing marketing, or market potential exists for their products.

American suppliers need to determine their competitive advantage, find a market niche, and understand the distribution channels.

The American companies that are successful in China are those that have thoroughly investigated the market, pre-qualified business partners, assured payment will be made and crafted contracts which minimize misunderstandings. Successful ventures are scrupulous in their “due diligence,” verify all claims made by potential partners, and receive extensive advice from lawyers, accountants, and even private investigators.

Problems in doing business in China:

• China often lacks predictability in its business environment

• China still tends to be mercantilist and protectionist

• China has the remnants of a planned economy

• Foreign businesses have been over-enthusiastic about China – lack of thorough due diligence is the primary cause of financial losses for American businesses.

Tips for doing business in China:

• Have clear contract terms

• Make certain that your project is economically viable

• Make sure you know your partner

• Make sure you get paid

• Do not enter into prohibited agreements

• Never agree to pay bribes of any kind

• Base your business on WTO compliant rules

• Search for problems before they materialize

• Limit your exposure

• Mind the store

Best Prospects for U.S. Exports to China

• Telecommunications Equipment

• Oil and Gas

• Medical Equipment

• Pharmaceuticals

• Audio Visual Equipment

• Pollution Control Equipment

• Insurance Industry

• Airport and Ground Support Equipment

• Computers and Peripherals

• Building/Decorations Materials

• Computer Software

• Education and Training

• Plastic Materials and Resins

• Agriculture Chemicals

• Coal Mining Equipment and Processing Technologies

For additional information on this or future videoconferences on International Business Development, contact George L. Hiller at ghiller@swcenter.edu or via phone at (276) 619-4374.