Doing Business In China

PayPal Finds a Niche in China

2010-05-18T07:35:00.000-07:00

EBay’s flagship consumer shopping service has struggled in China, but the company is more successful here than many may think, thanks to its fast-growing online payment business, PayPal.

The company’s legacy in the world’s largest Internet market by number of users has for years been tainted by losing the consumer-to-consumer e-commerce market to Alibaba Group’s retail website Taobao.com. But while Taobao and Alibaba’s payment platform, Alipay, still charge little to no sales commission to merchants — a strategy the Chinese company used to undercut eBay — PayPal’s China General Manager Alan Tien says the company has found a commission-based revenue model that works in China.

Tien, who oversees PayPal’s domestic Chinese payment platform Beibao as well as the acquiring of customers in China for the company’s international website, says he focuses most of his energy on the latter, because that’s where the revenue growth is.

Alipay’s rates still make it difficult for Beibao to post significant revenue from domestic transactions in China, and Tien says there’s nothing he can do about that so long as Alipay charges the way it does. Also, most consumers typically still use direct payments through their bank websites or cash-on-delivery for many of their purchases.

Rather than trying to compete with Alipay’s cutthroat rates for domestic sales in China, where the market for non-Taobao online sales is still small, PayPal China teaches Chinese small-business sellers how e-commerce works and how to sell their products to more than 80 million PayPal users world-wide, he says.

While Alipay has the advantages within China and continues to use low rates to build its local user base, Tien says, PayPal has a massive global network built over years and a fine-tuned system for detecting fraud and protecting customers, which is difficult for any competitors to replicate, and such advantages can be leveraged.

Part of this strategy includes linking up with e-commerce websites like DHGate.com or even Alibaba Group’s online wholesale Web site, AliExpress. PayPal China’s other customers include travel websites serving overseas travelers coming to China, or vendors of virtual goods like online game websites. The company also plans to begin accepting China UnionPay as payment this year, so Chinese consumers can purchase from PayPal’s global merchant network.

Convincing Chinese merchants to accept PayPal isn’t an easy process, however. While PayPal enjoys brand recognition in Western markets and can acquire customers largely through online advertising, it has very little recognition in China, where many sellers have never considered taking their businesses online. In effect, a crucial part of what PayPal China does is using a sales team to call potential international e-commerce merchants, like contract manufacturers who want to sell their own non-branded products, and convincing them that they can tap a larger market by listing their products in online malls or creating their own websites.

“In China, many people we call have no idea what we’re talking about” at first, Tien says. “But after you get the idea in their head, they may hear someone else mention it, and then maybe months later they will remember that they got this call from PayPal.” To further help its cause, PayPal China also advises Chinese customers on their options for online shopping software, and answers concerns about currency exchange (merchants must handle any foreign-exchange interactions on their own).

The result of all this: growth in the “high double digits” in China, Tien says, though he won’t disclose specifics. PayPal charges a 3.4% base rate to Chinese merchants.

When asked about the prospect of PayPal some day becoming eBay’s biggest business, Tien said the company has vastly more growth potential than online marketplaces do; while those businesses compete for a specific portion of consumer spending, PayPal could potentially serve all types of payments in all areas of spending, from retail to rental fees.

An insight into doing business in China

2009-04-19T07:27:00.000-07:00

CFO Guide to Doing Business in China
Author: Ching Mia Kuang
Publisher: John Wiley & Sons

NOBODY can expect to venture into a new country, set up shop and make profits without first studying the intricacies of doing business there, least of all, when the country is China.

China’s business environment is, after all, one of the most complex and competitive in the world.

There are constant changes in rules and regulations, while the enforcement procedures are vague, more often than not.

Things don’t get easier with the strong local government influence.

Enters a book about making things easier for the China novice. CFO Guide to Doing Business in China aims to alleviate the task of understanding the business environment of this Asian superpower by providing up-to-date and relevant information.

In the 205-pager, author Ching Mia Kuang, a China financial expert, addresses key aspects of doing business in China.

As the title suggests, the book is targeted at chief financial officers of companies, but anybody who has to negotiate the difficult business terrain in China can easily learn a thing or two as well.

It provides comprehensive overviews on the country’s business laws, accounting systems, taxation issues, labour regulations and risk management operations. These are areas that are often too complex to understand on one’s own.

Adding weight to the book are explanations of the various current business trends (such as mergers and acquisitions) relevant to the country and to the rest of the world.

There are also lots of valuable information, and facts and figures for the businessman in China, including tax rates of different countries and definitions of useful financial terms.

For the completely uninitiated, CFO Guide delves a little into the background of China as a country and traces the paths it took to become the major business domain that it is today.

It even touches on Chinese culture and beliefs, which makes a nice but relevant deviation from all the business talk.

One the best parts of the book is that it is interspersed with healthy doses of real-life case studies, which readers can draw upon for knowledge or even inspiration.

All in all, the concepts and explanations are presented clearly, albeit in a text-heavy format. The presentation could have been made more interesting with some colour pictures or illustrations instead of mere charts and tables, typical of business publications.

There are hordes of business books out there. So, if you have a good product, make it stand out, I always say.

This book offers a wealth of information. It is a great headstart for those who want to know more about doing business in China.

How do you start a business from scratch in China?

How do you close a business deal in China? You’ll find out after reading this book.

Business Owners Rally Against Lead Testing Bill

2009-02-06T16:56:00.000-08:00

Safety Bill Could Effectively Close Many Thrift, Consignment Businesses

A new law aimed at keeping lead-tainted products from children is facing stiff opposition from business owners and charities that say it’ll put them out of business.

The law is part of the Consumer Product Safety Improvement Act of 2008. The bill was written in response to the rash of lead-tainted toys that came from China.

Some business owners said that despite the bill’s good intentions, it could have some far-reaching effects that lawmakers might not have foreseen.

"It’s devastating. When you read through the law, you think to yourself, “There is no way this can be for real,’" business owner Karyn Ranzau said.

Ranzau said that when the bill takes effect on Feb. 10, she will no longer be able to run the hair bow business she spent years building.

The law will make it illegal to sell items in consignment shops or second-hand stores that contain certain levels of lead. That includes toys, clothing and accessories like Ranzau's hair bows.

"I love the craft and I love being artistic and I have a lot of fun with it but it’s something we've come to depend on as a source of income," Ranzau said.

Consignment shop owner Shelly Briones said it would cost her tens of thousands of dollars to test her goods -- which would force her to close her doors for good.

"When people walk in and see some of the clothes I’ve been pulling off the racks they're like, ‘You've got to be kidding me? It’s a child’s rain coat. Why can’t you sell it?’" Briones said. "In today’s economy people need us more than ever. They need the consignment and thrift stores. They don’t have the money to buy new," Briones said.

Briones and Ranzau held a meeting Wednesday night to recruit others to do something about the law.

"We are doing everything we can to get a hold of people and spread the word because in a week it will be a felony charge to sell what I sell," Ranzau said. "I’m not saying, ‘Lets not keep kids safe.’ We are all for that but give us some direction. How do we test, how do we make this feasible."

A senator from South Carolina argued in favor of the business owners’ position in Congress on Wednesday. The senator is pushing for a year-long stay on the bill to enable legislators to take a second look at the bill.

Congress still has to vote on the measure.

Local Business Man Back from China Impressed with Performance

2009-01-02T07:20:00.000-08:00

The start of the New Year was highlighted by another heart warming and magnificent performance by the Divine Performing Arts. The Chinese New Year Spectacular drew quite the crowd in Los Angeles. It will put on a total of five shows in Los Angeles as it continues to march up the West coast. Meanwhile two other groups are performing in New York and Canada.

Pasadena had their hands full with the Rose Bowl this weekend and the aftermath was apparent. But right across the street there was a buzz on the street as people milled about in anticipation of the New Year Spectacular.

Among the audience were many Chinese and American theater lovers, art fans, and local businessmen.
Mr. Van a local real estate executive commented on his experience with the Divine Performing Arts with,

“It’s a really terrific performance! We just got back from China and it’s very educational and inspiring,” he said.

“It’s traditional and very well done. I liked the last one about Tibet,” he said afterward.

During the hustle and bustle of the intermission, Frank R. took some time to comment on the show and said the performance was, “Fantastic and very impressive.”

“The first dance, the flower dance, was really nice. It was very good but I really liked that one. I went to China this past summer. So, I really like the Chinese culture and what they stand for,” he said.

Divine Performing Arts will be putting on over two hundred and sixty performances all over the globe and is making its way up the west coast, while two other groups are currently doing performances in Canada and New York.

U.S. self-insurance advisory body tours China

2008-12-03T13:51:00.000-08:00

The Self-Insurance Institute of America Inc is expanding its international efforts with a business tour of China that will explore opportunities in self-insurance and alternative risk transfer.

The tour, scheduled next year for May 31-June 6, will be held in partnership with XMei International, a Walnut Creek, California-based firm that offers advisory services for companies doing business in China. The tour will connect participants with insurance executives, government officials, representatives of multinational companies and others who will provide information on doing business in China, and opportunities for those who can provide self-insurance services there, Simpsonville, South Carolina-based SIIA said in a statement.

The event follows SIIA’s first international conference held this summer in Barcelona, Spain. The group said it is planning additional international events.

“Through international exposure, SIIA has learned that there is a great global appetite for American-style self-insurance and alternative risk transfer,” SIIA President-Elect Armando Baez said in the statement. “This tour is another example of how SIIA will promote cross-currents of opportunity among our members and people we visit.”

Information is available at www.siia.org

Doing business in China requires more than selling a good product

2008-11-19T18:24:00.000-08:00

Sometimes it’s not so much what you say but how you say it. It’s both, however, if you want to successfully deal with Chinese businesspeople. It’s saying the right things at the right time in the right order and with the right gifts. It’s about flexibility. Adaptability. From a Chinese perspective, it’s more about people than products. It’s culture.

That’s the advice Quanyu Huang was expected to deliver Nov. 13 at a seminar sponsored by the Ohio State University Chinese Flagship Program. The university brought Huang, director of the Confucious Institute at Miami University in Ohio and a specialist on Sino-American cultural and educational comparison, to campus to talk about doing business with China.

His appearance and subject came at a time when a faltering economy is working its way deeper into America’s fabric and many companies are looking for ways to survive.

Prior to the OSU event, Huang said Ohio companies do billions of dollars in trade with China annually, yet many of them and Western businesses are unsuccessful in China from a wholly Chinese perspective.

N.B.A. and Partner to Help Build 12 Arenas in China

2008-10-13T12:41:00.000-07:00

The N.B.A. and AEG will announce on Sunday plans to design and operate at least a dozen arenas in China, extending the league’s presence in its largest foreign market. The arenas could form the infrastructure of an N.B.A.-branded league in China.

Under their plan, the league and AEG will make modest cash investments in the arenas, but their expertise will give them substantial ownership stakes in the buildings.

The arenas are to be financed largely by local and provincial governments.

“We won’t do this without an economic return over time for AEG and the N.B.A.,” said Timothy J. Leiweke, the president and chief executive of AEG.

He and David Stern, the N.B.A. commissioner, will announce the joint venture before the Nets-Heat exhibition game at the O2 arena in London.

Stern said the league was looking to capitalize on a growing urban Chinese middle class with increasing disposal income.

“China is an enormous market with enormous potential, not only for basketball but for entertainment venues,” he said in an interview.

The league and AEG are partners in the Beijing arena where basketball was played at the Summer Olympics in August. They are looking at building arenas in major cities like Shanghai, Guangzhou and Shenzhen. The arenas will be designed to accommodate a broad range of uses beyond basketball.

“We see these venues as homes for basketball teams, hopefully, in a league that is a partnership between the N.B.A. and the China Basketball Association,” Stern said.

The arenas are envisioned as 19,000-seat facilities, some extravagant and some modest, that would be part of entertainment districts in some of the largest Chinese cities.

“Our issue is which 12 do we choose?” Leiweke said in an interview last week from Dubai. “I think we’ll have 30 or 40 of these opportunities, and 15 will make sense. Within a week, you’ll hear of some of the markets we’ll jump into.”

AEG, a subsidiary of the Anschutz Company, runs or owns more than 90 arenas and other facilities around the world, including Staples Center in Los Angeles, the O2 in London, the O2 World arena in Berlin and the Prudential Center in Newark.

Stern and Leiweke acknowledged the global credit crunch pushing world economies into a recession but said their arena-building goals were long-term.

“Projects like these are marathons, and whatever cycle we’re in, we’ll come out of it,” Leiweke said.

Stern said that Chinese officials had not yet shown skittishness at financing arenas in the face of the drastically altered world economy. Adam Silver, the N.B.A.’s deputy commissioner, said, “Hard assets like these in China might be good places for global investment.”

Although China has not been immune to the recession, “it has been one of the growth spots in the world economy,” said John Frisbie, the president of the United States-China Business Council, a nonprofit group that represents American companies doing business in China.

“The fundamentals of the Chinese economy seem good for U.S. companies,” he said.

Although the league expects slight growth in the United States this year, Silver said that it was looking for a 30 percent increase in revenue from China

“We’re taking advantage of the boom in basketball coming out of the Beijing,” he said, “Despite the terrible economy, the timing is good to make this announcement.”

The N.B.A.’s business interests in China have been growing for nearly 30 years. The league has 100 employees in four cities, and 15 marketing partners. A third of the online traffic to NBA.com comes from the Mandarin Chinese part of the site, and league merchandise is sold at 30,000 retailers in China, among them two NBA Stores.

In addition, N.B.A. games are available on 51 networks in China. where 1.6 billion viewers watched league programming last season. One of China’s leading exports, Yao Ming, is an All-Star center with the Houston Rockets, and Yi Jianlian, a 20-year-old forward, is seen as a liaison between the Nets and the region’s Chinese-American community.

Last year, the league created N.B.A. China, a subsidiary with five investors — the Walt Disney Company and four Chinese partners that paid $253 million. The league’s contribution to the arenas will come from that money.

“This is not only a content play, but a development, facility and real estate play,” Leiweke said. “The N.B.A. is thinking out of the box, beyond basketball. Its brand in China is amazing. If you go to China, you get an appreciation for what they’ve built.”

The league and AEG did not realize that they were each working separately on arena-development strategies until the Boston-Minnesota preseason game in London last October.

“We realized it made more sense for us to be partners,” Stern said.

The cost of doing business in China: Privacy

2008-10-02T14:49:00.000-07:00

There’s a good amount of scuttlebutt today on a report that highlights how the Chinese government is monitoring Skype traffic for keywords that may offend the Communist party.

The report in question (Techmeme), Breaching Trust: An analysis of surveillance and security practices on China’s Tom-Skype platform, details the activities of the Chinese government’s monitoring of Tom-Skype users. Tom Online and Skype have teamed up to offer a Chinese version of the messaging software in China.

The gist:

The full text chat messages of TOM-Skype users, along with Skype users who have communicated with TOM-Skype users, are regularly scanned for sensitive keywords, and if present, the resulting data are uploaded and stored on servers in China.

Here’s a look at the keywords China monitors:

china1.png
Meanwhile, personal information is stored on insecure systems and surveillance is based on keywords, but not entirely (user names may also be in play).

Koman: Chinese monitoring Tom-Skype messages

And eBay spokeswoman told the New York Times to talk to Tom Online about the security issues. There was no comment on the monitoring.

Yawn. Does this report surprise anyone? Here’s a headline that would be real news: China respects online privacy.

Sure, the monitoring stinks. But let’s get real here. China was monitoring taxi cab rides during the Olympics. So what’s the big deal if China checks Skype messages? Or your Web viewing habits? Or your personal data? Or anything else for that matter? China monitors your stuff. China doesn’t know the concept of privacy and it isn’t likely to care unless its people stand up and revolt–and they aren’t. If the biggest spotlight on the planet–the Olympics–isn’t going to put China on the good Internet behavior bandwagon it’s highly unlikely that a report by a group called Citizen Lab will.

And if you’re a U.S. vendor operating in China you try and straddle this line between our values and China’s. It doesn’t always work, but companies try to walk it anyway. Shareholders propose numerous human rights policies at their annual meetings with companies. Good luck with that folks.

In the end, it’s hardly shocking that China is reading Skype messages. It reads all of messages in the country. Privacy is the cost of doing business there. In an ideal world, that cost would be too high. But apparently the rewards eclipse the costs for now.

Larry DignanLarry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.

China's new prosperity fuels fitness craze

2008-09-08T20:37:00.000-07:00

Several days a week, Wu Ruiyao hits the gym, where she sweats on a treadmill, tones her abs in a group exercise or stretches under the guidance of a personal trainer.

The 90-minute workout is routine to Wu, a 36-year-old ad sales representative. But the surroundings — a four-story fitness club catering to different fitness levels and needs — would have been unimaginable just a decade ago.

"When I thought of a gym in the 1990s, it would be bare with dumbbells and maybe running machines in a room," said Wu, a small woman with big, smiling eyes. "My mom thought doing house chores was working out, but that's not a truly aerobic sport."

Their lives transformed by breakneck economic growth, many Chinese are embracing creature comforts which would once have been denounced by their communist bosses as bourgeois indulgences.

Fitness is largely an urban, middle-class craze. Most Chinese still rely on farming for a living, and hard, physical exercise is not their idea of recreation, nor was it for urban Chinese just escaping Mao-era poverty 20 years ago.

Now they are free to shape and pamper their bodies, and fitness clubs are moving in.

"Once the people have more time and more money, they will think of fitness," said Gu Haoning, who monitors the health and fitness industry for the government's General Administration of Sports. "It would be impossible if they are still trying to eke out a living and don't have extra money for fitness."

The national fanfare surrounding the Beijing Olympics is adding to the momentum.

A generation ago, most people exercised in parks and side streets. In the 1980s, Jane Fonda's aerobics videos began circulating. Now, in a country long shadowed by famine, food has become plentiful and there are even signs of an obesity problem.

Matt Lewis is a pioneer in Beijing's fitness market. The New Zealander came to Beijing in 1997 to manage an elite country club and immediately saw opportunities in bringing fitness to the emerging middle class.

Gyms back then were "either very, very expensive, or very, very cheap," he said, but with an initial investment of $500,000, Evolution Fitness opened in 2001 as one of the first private gyms in Beijing.

The gym on most work nights heaves with young Chinese professionals spinning on bikes, making waves in the pool or striking a triangle pose in yoga classes. It is making money, said the 37-year-old Lewis, the managing director, though he wouldn't say how much.

With China's economy having grown at double digits in recent years, urban Chinese have extra money to spend. Investment in sports and other recreational equipment leaped 8.5 percent in the first seven months this year compared with the same period last year, to $1.5 billion, according to government figures.

Wu, the ad sales executive, said stress from work and hours spent in Beijing's clogged traffic drove her to sign up this year at the Alexander City Club, an airy gym in an up-market apartment complex in the business district.

"I feel energetic and buoyant after working out," Wu said. "Otherwise I would be dragging my tired body home."

Wu, who is single, makes about $30,000 a year. She paid $1,150 for two years of membership and $70 an hour for personal trainers.

"It is money well-spent," Wu said. "As you get older, you realize health is important, and having a private trainer is more effective and timesaving."

Her mother, back in southwestern Yunnan province, would have never gone for it. "Raising two children, my mother never had the time, and there was no money or gym either," she said.

"Those who were born in the 1960s and 1970s have been working so hard. They have been pursuing success at any cost," said Yin Yan, the former editor-in-chief for the fashion magazine Elle in China and founder of the Yogiyoga Center yoga studio in Beijing in 2003.

"Now they have it — money or social status — thanks to China's economic development, but they also find their health worsened and their lives in a mess."

The newly stressed can visit spas for full-body rubs, foot massages and aromatherapy. They range from hotel chains to mom-and-pop operations.

One sensation is the mega-bathing center. Though descended from bathhouses that operated before homes had water heaters, many have more in common with Las Vegas. Oriental Hawaii and Oriental Venice bathhouses in Beijing employ hundreds and are twice the size of an average Wal-Mart Supercenter.

The one-stop pampering offers foot rubs, massages, pingpong, food, easy chairs and overnight stays.

Chinese families come there to spend time together, businessmen woo clients over a foot-soaking, and young people come to idle away a night.

"Whenever I am tired or drowsy, I go there to lie down," said Sun Desheng, 45, a businessman in the garment industry. "I like the ambiance created through background sound and lighting, and the services are great. I will relax and sometimes fall asleep."

Demand is so high that the Beijing Adult Massage Occupational Technical Training School, which opened in 1998 to train the blind as masseurs, has since had to admit sighted students. The school has trained more than 20,000 massage therapists, President Zhang Haiyan said.

Zhang estimates Beijing, with a population of 17 million, has at least 50,000 to 60,000 massage therapists, yet "Employers are calling for more students than we have."

Big cities like Beijing are far from saturated with gyms and spas while smaller cities are untapped, meaning the industry is sure to keep growing.

"Chinese people want to live forever, while Americans want to enjoy themselves, but it's all about being healthy," said Gu, the health official. "It's the kind of spending that comes from the heart of the people."

For China it is mission accomplished

2008-08-31T16:00:00.000-07:00

As the curtain fell on the Beijing Olympics on the evening of August 24 the joy written on the faces of the Chinese was palpable, and so too was the relief at the end of an event that marked their coming-out party as a sporting world power.

The Chinese confirmed it emphatically in the Olympics, grabbing 51 gold medals, eclipsing the 36 won by the world's sole superpower, which finished second. With its gold medals won deservingly, China emerged as the first Asian nation, since the modern Olympics began in 1896, to win the unofficial crown as the world's greatest Olympic power.

Three cheers for winning the "truy exceptional games of 29th Summer Olympiads," in the words of IOC President Jacques Rogge at the closing ceremony.

For China, the Games, that set 45 world records and the host's achievements therein, will firmly entrench here newly acquired stature after a century of humiliation at the hands of foreign powers.

Not surprisingly, one of the most discussed topics in the past few days was " the realisation of a century old dream." In 1908, the youth magazine Tianjin raised three questions with regards to its dreams about Olympic participation. When can China send an athlete to the Olympics? When can it send a team of athletes to the Olympics? When can it host the Olympics?

These questions could have been crazy at that time, but we know the answers now. In 1932, China sent a sprinter to the 10th Olympics games in Los Angeles. Four years later, a Chinese team took part in the 1936 Berlin Games. But neither won a medal.

Hence, the "sick man of East Asia" label was stuck to her Olympic credential. It wasn't until 1984 in Los Angeles that China bagged its first Olympic gold media. After that China didn't look back, and moved faster.

Yet, it took 100 years for the Chinese to host the games and to surpass the US at a major international sporting event. For the Chinese, the symbolic value of both the achievements is indeed enormous, and was aptly described by Orville Schell when he wrote in the Newsweek that "it is impossible to understand what the Games mean to the Chinese without understanding their history of humiliation."

American sports historian, Susan Brownell, saw the Chinese hosting of the games as the Chinese people's "collective redemption for the national suffering of the past century."

This partly explains why China was prepared to mount the most grandiose and expensive games in Olympic history, and did not tolerate any attempt from any quarter to spoil its party. At work also was the bruised inner psyche of a nation in the face of manifest disgrace.

Now China, winning the most gold medals, will unavoidably become a metaphor for the manner of its ascent as a sporting power. The world will have to adjust to its obsessional sense of competition, not only to its search for wealth-producing resources.

There are, however, aspects of their sports talent program that are not a model for other nations, chiefly the regimented nurturing of children of championship potential. Life is also about fun and freedom, which cannot be dispensed with -- even for national glory.

As for the handling of the dissent in Tibet and Xinjiang, the world will look for signs that a stronger China will find it easier to ease up a bit.

Nevertheless, the Beijing Olympics, which ended a few days ago in an outpouring of fellowship among the assembled, was a mission superbly executed by China.

The effect it will have on the rest of the world -- how well or poorly governments and people will view the real China that has been glimpsed, and how they will connect with an indispensable nation -- will be profound.

It is futile to think that the just-finished Olympiad was going to be anything other than a measuring gauge to evaluate a reawakened great civilisation, accompanying, of course, commensurate power and prestige.

The important achievement of the 29th summer Olympiad, it is observed, is that it helped promote mutual understanding between China and the world.

It is believed that this is something that will have a positive effect in the long run. Many even reckon that China's embracing of full-fledged democracy is now a matter of time. A rejuvenated China will not miss the opportunity to become stronger with an elixir of political and civic emancipation.

For Chinese-Americans, Beijing Olympics bring mixed emotions

2008-08-03T09:40:00.000-07:00

Amelia Lam, a 36-year-old teacher's assistant, emigrated from Hong Kong to San Jose five years ago. When she talks about how proud she is that China is hosting the Summer Olympics, she almost glows.

For Cher Fu of Santa Clara, all the hype about the Games is a daily reminder of her family's nightmare. Three years ago, she says, her parents were thrown into a Chinese forced-labor camp, tortured and brainwashed. Their crime: belonging to Falun Gong, a spiritual movement that the communist Chinese government has outlawed.

On the eve of China's first Olympics, as the world prepares to gaze more intently than ever upon this paradoxical country, many Chinese-Americans find themselves confronting complicated - and sometimes conflicted - attitudes toward their motherland.

After two decades of extraordinary economic growth and rising geopolitical clout, the world's most populous nation is determined to prove to the world that it deserves more respect. But China's critics maintain that, despite taking steps toward an open society, its government is clinging to its old authoritarian ways and still ruthlessly suppressing dissent.

Chinese-American views on the 29th Olympiad in Beijing often depend on where their families came from. Did they immigrate from the mainland? Or from Hong Kong or Taiwan? Or were their families part of the centuries-old diaspora that scattered Chinese across Asia - in places such as Vietnam, Indonesia, Thailand.

Their attitudes also depend on whether their families came to America as traditional immigrants or political refugees. Some do business in China, while others have linked up with U.S. human rights groups to protest political and religious persecution there.

Attitudes toward the Olympics also reflect the arc of Chinese-American politics since 1989, when the world was riveted and then horrified by the events in Tiananmen Square. As China in the past two decades has gone from international pariah to economic superstar, the country's critics have had to soften their tactics.

Immigrants who still have strong roots in China look at the Games as "a great honor and privilege - a chance to show the world how far they've come," said Albert H. Yee, a fourth-generation Chinese-American and scholar who helped President Nixon plan his historic 1972 trip to China.

Many Chinese-Americans marvel at how the Chinese finished a $40 billion upgrade to Beijing just in time for the Games - digging new subway lines, constructing behemoth stadiums and other structures, planting 3 million trees and relocating factories to help clear the city's notoriously bad air.

Peek at modern China

They're also hoping the Games will shatter stereotypes of China and, in turn, draw the world closer.

"It will bring a lot of world leaders and dignitaries to Beijing, and they can see how it is today," said Dr. Albert Wang, a Fremont physician. "Even people I work with, other physicians, still think China looks like what they see in the movies" - a land of peasants and rice fields fertilized with night soil.

"Beijing looks like New York," said Wang, 49, who immigrated to the United States as a child but has visited China often in recent years.

But some Chinese-Americans say China's progress has too often been at the expense of its people.

Jin Xiu Hong of Seattle said her parents' home in a Beijing suburb was bulldozed six years ago to make way for Olympic dreams. Her family "still has not been paid one cent in compensation," she said.

"The Olympics have become a disaster, because they bulldozed people's houses and created this fake boom," said Jin, a former journalist for the Beijing Review who left her homeland with her American husband after the Tiananmen massacre.

"Maybe the Olympics will bring China a good image to the world, but these goddamn Games have made people commit suicide," she said tearfully. "They made my mother have a stroke."

'Propaganda tool'?

Fu, the Santa Clara woman whose parents were imprisoned for practicing Falun Gong, said she is concerned that the government is stepping up its human rights crackdown before the Games to present a vision of order and harmony to the world.

"I don't like to see the Olympics used as an excuse for the Chinese Communist Party to persecute people," said Fu, whose lobbying efforts in Congress called enough attention to her parents' case that Beijing released them last year.

Chun-Yin Yu of Cupertino, a recent civil engineering graduate of San Jose State University, predicts a highly politicized Olympics, similar to the 1936 Berlin Games and the 1980 Games in Moscow.

"I'm concerned that the Olympics are being used as a propaganda tool," said Yu, 27, who emigrated from Hong Kong when he was 10.

But many Chinese-Americans - even those who say they don't like the government in Beijing - say they hope the "China bashing" will stop during the Games. Many say they were upset at the noisy demonstrations against China's policies in Tibet and Darfur when the Olympic torch passed through San Francisco and other cities around the world.

"I don't think making a mockery of the country is the way to go," said Roger Xu, 20, of Santa Clara, a premed student at the University of California-Santa Cruz. A native of Wuhan, China, Xu came to the United States at age 13. This summer, he's working as a teacher's assistant at the Yew Chung International School in Mountain View.

Other Chinese-Americans warn that protests surrounding the Games will backfire.

"If you just keep pounding the government, they'll just tighten up their security," said Lester Lee, president of Recortec, a computer hardware company in San Jose.

"The torch-run protests just gave the government a darn good reason to do that," said Lee, who came to this country in 1950 after graduating from high school in China.

Community evolution

Grace Chang, 31, a preschool teacher at Yew Chung International School who was raised in Taiwan, said she has mixed feelings about protests of the Games. She disagrees with the recent crackdown in Tibet, but still thinks China has made great progress in recent decades.

Her elementary school textbooks depicted the country as a totalitarian dictatorship where people were starving in the streets; today, relations between Beijing and Taipei have warmed as Taiwanese investment in China has skyrocketed.

"I'm proud that China is doing everything it can to make the Olympics the best they can be," Chang said. "I think the whole world is very excited about it."

The evolution of Chang's feelings about China in some ways echo broader sentiments throughout Silicon Valley.

Nineteen years ago, after Chinese troops massacred young activists, the valley was a hotbed of pro-democracy activism organized by Chinese-Americans. But the movement has mellowed over the years. Its main activity these days is to send Christmas cards to Chinese dissidents.

In 2004, China even gave a visa to Cupertino's Barry Chang, the Taiwanese-American co-founder of Silicon Valley for Democracy in China, after other local Chinese-American leaders assured Beijing he wouldn't cause any trouble there.

"As the monster becomes bigger and bigger, it gets harder and harder to force the monster to change," said Chang, 56. "So I think it's better to force the monster to change from the inside, until the point where it's not a monster anymore."

China: only the start?

2008-07-26T13:47:00.000-07:00

No discussion on global sourcing is complete without mentioning China. At last count, 450 of the Fortune 500 companies were doing business there, while countless small and medium-sized firms are tapping the country for everything from auto parts to zinc chloride.

Of course, sourcing here is never easy — from finding the right partners to navigating culture, language and rapidly changing regulation, to say nothing of rising labor costs and all those horror stories (toys with lead paint, poisonous dog food and tainted pharmaceuticals, to name a few).

But according to Jimmy Hexter, a director in McKinsey & Co.'s Beijing office and a co-author of the book "Operation China: From Strategy to Execution," the real risk for U.S. companies is not doing enough in China.

CRAIN'S: Why do you say U.S. companies aren't doing enough sourcing in China?

MR. HEXTER: We work with clients who have moved product to China — maybe they've moved it into their own factory, maybe they've given it to a supplier — and they've saved 20% or 30% on cost. But what they find over time is there's at least another 20% or 30% to go in cost savings because manufacturing in China is not as efficient as it is elsewhere. Most local facilities don't yet have lean manufacturing in place, so there's much more potential in China than people realize.

What's holding companies back?

To take advantage of China you're talking about changing the location of decision-making in companies, you're talking about resources moving from this place to that place. And that's very difficult for a company. The other thing that's getting in the way is talent. There's an enormous stress on the local talent pool in China today, whether it's people to man the factories, manage the factories or run the sales force.

Aside from higher labor costs, what does that lack of talent mean for U.S. managers thinking about China?

The CEO of a Global 50 company recently told me, "I just have to get used to the fact that when I go to China the person I'm talking to in my company is 10 to 20 years younger then the same person in the same role back home." You have to get comfortable with that. Then it's a question of how you manage it, how you train for it. On the plus side, we're going to see a lot of innovation in talent management coming out of China that can be applied globally. Often the place in a global corporation that's under the most stress becomes the source of the greatest innovation.

How will China's rise affect U.S. business practices?

Not only will it get bigger, but in most industries at least some of the functions will find their global best practices deeply embedded in China, whether it's the sourcing function, the supply chain or the way products are developed. Entire industries will be reshaped.

Really?

This will happen in almost every industry. I know that sounds crazy, but imagine it's 1990. You're sitting in Silicon Valley and you say, "Guys, here's where we're going. We need to just design the computer chips here in California. There's going to be a Taiwanese company that's going to design the motherboards. We're going to take all of that into Kunshan (China), and then a different company is going to assemble the product after buying a bunch of the components from Chinese companies and Japanese guys that have factories there." You would have been fired — there's no question. But that's how notebook computers are made today.

What else will change?

China has 650 million urban residents. Over the next 20 years, 350 million more Chinese will move to the cities, so we're going to have a billion urban residents. If you take rising wealth and more kids in the cities, there's going to be 150 million piano students in China. They are going to want to buy a $100 piano. Now, the $100 piano doesn't exist today. So who's going to design and manufacture the $100 piano?

It's going to be somebody who's thinking about China right now, whether it's a Chinese company that's looking at that market or a U.S. company. Now apply that to other industries. They need energy, they need health care. Who's going to provide it? If you're not thinking about it until later, you're too late.

Many Chinese exporters now turning to imports

2008-07-08T14:14:00.001-07:00

Liu Xuefei, a trader in the southern city Guangzhou, quit his old job of selling Chinese ceramics to Australians and Americans and started to import wine in 2005.

China's exports in general were skyrocketing at the time but he decided to change his business anyway for two reasons. One, he found more and more rich people around him, and two, the United States was urging China to raise the value of the yuan. "I studied economics at college, and felt imports will be a promising business," said Liu.

Three years on, Liu's vision turns out to have been true. He now sells wine to Chinese city slickers who have just started to appreciate the drink, long seen as a mark of Western upper-class lifestyle in a country traditionally dominated by baijiu, or white spirits.

China is now the fastest growing market for wine in the world, and Liu's small company sells nearly 60,000 high-end bottles to Chinese companies eager to satisfy the newly acquired taste of their customers, among them high-end restaurants, airlines and five-star hotels.

Liu is not alone. More and more small and medium-sized Chinese companies have turned to the import business as China's exporters grapple with rising costs. China's domestic demand is also rising fast as deep-pocket urban consumers try to keep up with the latest trends in the world.

Ni Liang, a manager of Alibaba Group, the largest e-commerce trading company in China specializing in global trading, said among the members doing business through his company's online platform, many enterprises that were once in the export business have now moved to import.

Importing consumer goods including foods, high-end textiles and garments are increasing rapidly. Ni sees a lot of potential in the consumption goods import business as Chinese preferences become more international.

One of Alibaba's members is a small trader in Shanghai. Each quarter, the company's employees fly to South Korea to procure the latest designs and sell them to the swish set in Shanghai.

Chinese companies are also purchasing more hi-tech equipment and materials as they move up the value chain. So imports in these sector is also on the rise, according to Ni.

Meanwhile, many small and medium-sized foreign brands, eager to tap into the vast market here, are keen to enter China through local traders. According to a research by Alibaba, 22 percent of its foreign members have sold their products in China, and 65 percent said they have potential buyers in China.

U.S., China agree to talks on an investment treaty

2008-06-20T19:36:00.000-07:00

The two countries, concluding a round of economic talks in Washington, announce that they'll pursue a pact that could dismantle many barriers that U.S. firms face in doing business in China.

The United States and China, concluding high-level economic talks, agreed to launch negotiations on an investment treaty that holds out the promise of greatly expanded opportunities for U.S. companies in China's vast market.

The two countries also pledged greater cooperation to deal with energy shortages and global pollution.

The agreements were announced Wednesday by Treasury Secretary Henry M. Paulson Jr., who said he believed the initiatives would produce "significant progress" on two priorities both nations share.

The announcements came as the two countries concluded two days of talks aimed at defusing simmering economic tensions. Paulson and Chinese Vice Premier Wang Qishan participated in a joint signing ceremony in the Treasury Department's ornate Cash Room to wrap up the fourth round of a series of talks known as the Strategic Economic Dialogue.

The announcement Wednesday represented a fleshing out of details of an agreement that was initially announced at the last round of talks in Beijing in December. Paulson said the framework would focus on five major areas -- electricity, air, water, transportation and conservation of forest and wetland ecosystems.

The decision to pursue an investment treaty with China offers the prospect of dismantling a multitude of barriers that U.S. firms now face in their efforts to do business in China.

With Karaoke, A Deal For A Song

2008-06-08T19:13:00.000-07:00

In East Asia, karaoke nights are common—and help seal business deals. But, they can be daunting for the uninitiated.

The first deal Paula Beroza ever struck in China was sealed after she sang "Red River Valley" at a luncheon. Her solo followed one by the chairman of the Chinese company she'd wooed.

"I sang an American song that I knew they new and he sang a Chinese song," she said. With karaoke performances under their belts, their bond was solid.

Karaoke plays an important in the interactions necessary to solidify good business relationships in China, Taiwan, South Korea and Japan. It helps relax business contacts and bridge language barriers. It is so beloved by people in East Asian countries that Ms. Beroza, who runs an investment banking and consulting firm with offices throughout China, has noticed karaoke machines in the executive dining areas of some Chinese companies.

But most of the revelry does not occur during business hours. A night out at a karaoke club is a common chaser to the hallmark business banquet companies in China are fond of hosting. Eating, drinking and singing together helps build trust in a society in which written contracts mean less and personal interactions are far more important.

"When we do business in New York, we arrange a meeting, we speak to each other, we say our terms and conditions, we shake a hand and we sign our deal," said Cathal Conaty, who runs a company that sources manufacturing for American and Irish companies in China. "[But in China,] you don't just sit down and say 'I'm looking for this product at this price.' The manufacturer wants to get to know a person and get to know what you're like. One way to do it is when you go to a bar and you have drinks and you sing."

Chi Chen, an engineer who splits his time between China and the U.S., says karaoke plays a big part in entertaining clients. "If I'm meeting a customer, dinner is almost guaranteed, and entertainment afterward is almost guaranteed as well," he explained.

"It's not how we do it over here where...it's kind of a funny thing," Ms. Beroza added. Karaoke in East Asia is serious, and its practitioners are far more earnest in their art than a group of giggling Americans belting out "Sloop John B" might seem.

In the age of globalization, understanding of local custom is invaluable for business executives representing their companies around the world. Faux Pas, written by Emily Flitter, looks at how to avoid the false steps.

Have you had a similar experience in East Asia? How has karaoke helped your business dealings, and how have you handled late-night outings? Share your thoughts in an online discussion.

For the unseasoned American doing business in East Asia, there is occasionally a darker and somewhat confusing side to a night of karaoke. First-time travelers could be in for a shock when they find themselves in a private room in a karaoke club -- common in Thailand, Taiwan, Japan and mainland China -- being asked to choose from a lineup of young women brought in to serve them. A visitor's first thought might be that the women are sex workers.

They are young, often dressed in revealing clothes and ready to finger-feed customers fruit or whatever else they may be eating. In some low-end clubs, the women may indeed be sex workers, but foreign business travelers are unlikely to be taken to these places. At most places business guests end up, the women are simply club hostesses whose presence conveys luxury.

"There's a whole class of women who are just hostesses," explained Ted Fishman, a former commodities trader whose book, China, Inc. offers tips on doing business in the country.

"The hostessing is a very traditional way of dealing with being kind to guests," said Tracey Wilen-Daugenti, a director at Cisco Systems who often advises women on how to do business abroad. "Many of these establishments have hostess women and I have gone to dinner and had my own hostess woman and been very embarrassed, but [my hosts] actually thought they were being kind."

The most important thing to remember is that the evening's focus is on karaoke above all else.

Still, the experience can be shocking. Nancy Fox, while serving as the vice president of merchandising for the American division of a Japanese apparel company, found herself inside a karaoke club with female hostesses during a visit to Thailand with her Japanese colleagues. The rest of her team was made up entirely of men, and they appeared to be thoroughly enjoying themselves, but to her, the place looked like a den of vice.

"They gave me a woman, a young woman to keep me company," she said, "while they were being entertained by the other Thai women."

"I was furious," she said. "I asked them to leave."

Even if the hostesses in a karaoke club are not prostitutes, the experience may be too much for some first-timers to handle. Despite the importance of karaoke in Chinese and other East Asian cultures, bowing out gracefully from a night at a club will do no harm to any business relationship. Women may find it especially appropriate to leave, or they may not be invited at all.

"The businesswomen's side is we find that doing the dinner can suffice," she said. Most women say leaving early doesn't hurt their business dealings. Going out afterwards and doing excessive drinking isn't considered very feminine." She added that it felt easier to duck out of a late-night trip to a karaoke bar as a woman.

"I traveled with a guy who was a Mormon and happily married with a lot of kids and didn't drink," she recalled. His hosts wanted to stay out late with him. But he and his other team members found excuses to slip away.

There are plenty of acceptable excuses. "Do not be negative in excusing yourself," Mr. Fishman advised. "Just say 'I'm tired, I'm jet lagged.' " Mentioning a family waiting back home for a phone call also works.

But karaoke remains important, and experienced travelers to East Asia add that it never hurts to relax and try to belt out a tune or two. Karaoke can actually be comforting. "You're in China and everything's so different," Mr. Conaty mused. "All of the sudden your favorite Brian Adams song comes on and you feel like you're home again."

Westerners should be patient in business dealings with China

2008-05-26T17:37:00.001-07:00

The International Resource Group hosted a networking luncheon on Tuesday that featured the presentation "China Business Protocol and Etiquette" by Qihong Lou, CEO of Cross China, a company that facilitates mergers and acquisitions between American and Chinese companies.

The event: The IRG's monthly luncheon was held at The Inn on Broadway with lunch provided by Tournedo's.

The afternoon kicked off with casual networking and introductions by Sharon Badenhop, an IRG board member who was not above busing tables after lunch.

David Lee, an independent consultant who facilitates overseas trade who lives in West Irondequoit and travels frequently to China, was there to make contacts with others interested in doing foreign business, suggested a tortoise-not-hare mentality.

"My last visit, talks broke down. It doesn't always work out, but making contacts and developing relationships" make up the overriding currency in China and many other Asian markets.

In her presentation on how properly to conduct business in China, Lou advised westerners to be patient, letting a business relationship develop at its own pace.

"Colleagues are frequently brought into a family dinner, business is not so separate from family life" as in the United States.

During her interactions in China, Raquel Silverberg of Rochester had difficulty distinguishing "what needs to be done right away from what can wait."

Lou described concepts such as "GuanXi, MianZi and ZongYong," or long-term interaction, reputation and harmony, as being elemental to successful business negotiation.

The crowd: Twelve representatives or owners of businesses with international bureaus attended. Said Sharon Badenhop, who is also president of USA East: "We had seven no-shows today, but like the little engine that could, we keep chugging along."

Annual membership dues for the IRG start at $50, or $25 for students, and events are open to nonmembers as well.

When consulting with companies expanding into foreign markets, director of global HR for Providium Kristin Sampson says she will "always strongly recommend cultural training to understand cultural norms."

Find out more about the IRG online at www.irgnet.org

A Window into the Chinese Pharmaceutical Market

2008-05-19T15:14:00.000-07:00

Hu Kun Ping, Vice President, Reed Sinopharm Exhibitions Makes The Case For Doing Business In China

In an interview with Pharmaceutical Processing, Hu Kun Ping, Vice President, Reed Sinopharm Exhibitions, discusses key trends, opportunities and challenges in the Chinese pharmaceutical market, while citing important regulatory and economic changes taking place in the country. In making the case for doing business in China, Hu Kun Ping describes the benefits of participating in API China & INTERPHEX China conference and exhibition and highlights what new features and events the Spring 2008 edition will offer.
Can you provide details on the pharmaceutical market dynamics in China?

According to industry publication, Medicine Economic News, China is the hot spot for the global bulk pharmaceutical market with 22 percent world market share, a growth rate exceeding 15% with annual sales of approximately USD 70 billion, and export turnover of USD 600 million. It is the second largest market for active pharmaceutical ingredients.
?
The rising middle class and living standards in China have resulted in an enormous demand for pharmaceutical products1. The Economist Intelligence Unit reports that China’s total pharmaceutical sales will be doubled to USD 28.3 billion by 20102. Surging global demand for better quality yet cost-effective pharmaceutical solutions is making foreign direct investors eager to tap into China’s extensive labor market and profit from this bullish economy2.
?
According to the latest report released by the China Pharmaceutical Industry Association (CPIA), almost half of the top 100 drug-manufacturing enterprises (based on sales figures) are foreign-invested entities or Chinese-foreign joint venture organizations. Of the Top 10, seven companies are foreign-invested enterprises while only three are domestic manufacturers3. This clearly demonstrates the fact that international players are taking up a bigger piece of the Chinese pharmaceutical market pie.
What are the plus points of the Chinese pharmaceutical market?
?
China offers international pharmaceutical conglomerates a rich plethora of cost-effective and quality raw materials, and an opportunity to leverage the country’s rapidly growing biotechnology, natural ingredients, CRO (Clinical Research Organization), and outsourcing sectors. Because China boasts strong manufacturing capabilities and a highly-skilled workforce, an increasing number of multinationals are setting up research and development centers in the region. In addition, the market outlook for formulations exports is positive and will be one of the major trends shaping this industry.
Can you throw some light on the pharmaceutical R&D scenario in China? Can lack of regulatory rules and IPR pose as a major problem?

The growth of multinationals has helped fuel China’s economy and raised the bar for manufacturing quality. The Chinese government has taken active steps to calibrate domestic research and development capabilities with world-class standards. Starting 1 July 2004, China’s State Food and Drug Administration (SFDA) imposed a regulation for all pharmaceutical manufacturers to observe Good Manufacturing Practices (GMPs)4. As a result, companies that could not meet these criteria were eliminated, while reputable large organizations saw their production capacity increase dramatically. In addition, three national laws were passed to protect intellectual property rights in China, and the country has strengthened its legal framework to be consistent with the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)2. The State Council of the People’s Republic of China announced in their 11th Five-Year plans that they will be devoting significant amount of resources into developing frontier technologies, particularly in sectors such as biology and advanced manufacturing technology. By 2020, investments in research and development are expected to be 2.5% of the country’s GDP5
.??
Please share your thoughts on India and China’s emerging pharmaceutical markets.

Both India and China show tremendous economic prospects and increasingly, we are seeing greater interdependence. CPIA reports that India is the largest importer of Chinese pharmaceutical products3. Demand from India continues to grow rapidly, up by 61.2% in the first three quarters of 20073. Chinese exports to India have exceeded those of the United States (which is ranked second) by more than US$100 million3.
?
To strengthen bilateral exchanges, Reed Sinopharm has held two editions of the Sino-Indian Pharmaceutical Co-operation Forum at API China. Hot topics addressed at the conference included collaborative efforts between the two regions for meeting global API demand, and creating successful business models for foreign exporters.
Reed Sinopharm organizes one of the largest and most reputable pharmaceutical trade event in China, API China and INTERPHEX China. Please tell us more about this event.
?
The API China and INTERPHEX China shows truly offer comprehensive a business platform. The essence of both shows is to provide a one-stop business destination for international and domestic buyers and sellers of ingredients, intermediates, fine and specialty chemicals, excipients, raw materials, packaging materials, processing and packaging machinery to trade, source and network.
?
API China’s 43-year history in China and INTERPHEX’s worldwide brand equity combine to provide international companies with a unique opportunity to network and trade in the Chinese pharmaceutical market. Also, as co-located shows they provide an ideal venue for global organizations to connect with Chinese decision-makers and uncover new business opportunities. ?China is one of the world’s largest producers of a wide range of high-quality and cost-effective pharmaceutical products, and big international players recognize this. That is why we are seeing an increasing number of foreign bellwether organizations such as Pall Life Sciences, Honeywell, Colorcon, Novasep Process, and United Industries among others, exhibiting at the event. Top executives and key decision-makers make it a high priority to personally attend these shows.
?
At the autumn 2007 show, we invited a group of pharmaceutical engineers and technical experts to encourage peer-to-peer exchange of market innovations and technical know-how. We hope to see a greater pool of these industry professionals at our event in 2008. This year we also plan to expand its global outreach efforts by introducing innovative marketing strategies, which focus on educating the international community on the tangible benefits of connecting with Chinese decision-makers at a trusted venue like API China.
Reed Sinopharm will be celebrating API China’s 60th edition anniversary in May 2008. What can we look forward to at this event?

2008 is a critical year for China, largely due to the Olympics being staged in Beijing. As such, we will be planning several initiatives to help domestic firms leverage these exciting internationalization opportunities. With the world’s focus on China in 2008, we see the need to constantly outdo ourselves and break into new frontiers. As part of our extensive international media hosting program, we’ll be inviting a group of prominent international trade media to attend the show and participate in exclusive interviews with key exhibitors. We are also planning several commemorative events and high-profile networking sessions to bring together the industry’s luminaries. You can look forward to additional updates as the events draw closer.
For more information about Reed Sinopharm and its services, visit www.reed-sinopharm.com.??
References:

1. Judy Zakreski, September – October 2001, The China Business Review, “Reaching China’s Middle Class Through Retail Pharmacies”??2. PricewaterhouseCoopers, June 2007, “Gearing up for a global gravity shift: growth, risk & learning in the Asia pharmaceutical market”??3. China Pharmaceutical Industry Association, January – August 2007, “Market Analysis on Chemical Pharmaceutical Industry”??4. Eliza Yibing Zhou, June 2006, Contract Pharma, “Biopharma CMOs In China”??5. China.Org.Cn, February 9, 2006, “China Mapping Out The 11th Five-Year Development Guidelines: Sci-Tech Development Guidelines”?

Reed Exhibitions
51 Changi Business
Singapore

High Test: China Oil Producers

2008-05-10T05:23:00.000-07:00

BEIJING -- Surging global oil prices are bleeding China's integrated oil companies as they get squeezed by government policies to insulate the nation's consumers from higher energy costs. But analysts say shares in Chinese companies that specialize in exploring for oil still may be attractive to investors.

China has two big integrated oil companies that both produce oil and sell refined fuels: PetroChina and China Petroleum & Chemical, or Sinopec. They are feeling the pinch, caught between international crude prices breaching $120 a barrel and domestic fuel prices capped at much lower levels.

China's oil companies are ultimately controlled by the state and face political pressure to keep domestic markets supplied despite losses.

The rise in oil prices has been especially hard on the bottom line of Sinopec, China's biggest seller of fuel. Sinopec has to buy 72% of the oil it refines from other producers, leaving it dangerously exposed to state policies that prevent it from selling fuel for a higher price abroad.

In the first quarter, Sinopec's net profit fell 69% from a year earlier, its biggest decline since doing an initial public offering in 2000. Sinopec would have posted a loss for the January-March period if not for a 7.3 billion yuan ($1.04 billion) government subsidy.

PetroChina, China's biggest oil producer by volume, fared little better, with first-quarter net profit tumbling 31% -- even though it pumps most of the oil it sells, rather than having to buy it from other producers. It also is under political pressure to keep domestic markets supplied, even if it means losing money.

China-based oil production and exploration companies that aren't involved in refining or retailing fuel are getting attention because they are less exposed to domestic energy policy.

A top pick is Cnooc Ltd., China's main offshore-oil producer. It doesn't disclose quarterly net profit, but it has said first-quarter revenue rose 61% from a year earlier.

Last year, Cnooc had trouble hitting some of its production targets, partly because of bad weather such as a typhoon that damaged an oil field. But this year, the company looks on track to increase oil and gas output 15% from 2007.

Another company well-positioned to take advantage of China's oil demand without the burden of continued government price caps is Citic Resources Holdings Ltd., whose primary asset is an oil field in Kazakhstan.

While the oil industry faces challenges stemming from rising costs of harder-to-produce oil fields, the Chinese face the added risk of government owners that sometimes put social goals ahead of the bottom line.

"We believe forecasting PetroChina and Sinopec's earnings has become an art form as widening refining losses have precipitated frequent policy adjustments," Kevin Koh, an energy analyst at Goldman Sachs Group, wrote Tuesday.

New China visa rules to hit business travel

2008-04-21T20:32:00.000-07:00

San Francisco business travelers wanting to go to China will face more time-consuming and rigorous visa requirements at least through the Olympics in August, a spokesman for the Chinese Consulate in San Francisco told the Business Times.

The new rules require companies to provide proof of hotel reservations, airline tickets, and specific contact information for the entity the American firm is doing business with, said Defa Tong, spokesman for the Chinese Consulate in San Francisco. In some cases, business travelers seeking visas will be required to go to the consulate for an interview.

Travisa, a business travel agent that helps secure visas for American companies, sent a letter April 15 to clients explaining the change. Recipients included Gene Schnair, managing partner for Skidmore Owings & Merrill's San Francisco office.

SOM designed the new U.S. Embassy in China as well as Beijing's China World Trade Center Tower and its employees frequently travel to China. The firm just last week signed a contract to design a 3 million-square-foot mixed-use development in Hang Hou.

For a new generation, the land of opportunity may lie in China

2008-03-30T20:22:00.000-07:00

TAIPEI, Taiwan -- When Marvin Ho co-founded a Chinese language school in Taiwan in 1957, his only students were a handful of Western missionaries.

Five decades later, it's a different story. Ho's classrooms are packed with scores of people clamoring to learn what they believe is the next global language: Mandarin Chinese.

China, having traded socialism for capitalism, is emerging as an economic power, perhaps the only one that could rival U.S. dominance in the 21st century. For a new generation of students, business people and even artists, the land of opportunity now lies to the East, not the West.

Drawn to its promise, many are seeking ways to navigate the often rough-and-tumble Wild West atmosphere of working in China. The clearest barometer of this trend is a booming appetite for learning Chinese.

Worldwide, about 40 million people are learning Mandarin, China's official spoken language and its most common dialect. Nearly 100,000 foreigners went to China to study Mandarin in 2006, more than twice the number five years earlier.

"In my generation, the U.S. was the first choice," said Ho, whose Taipei Language Institute now boasts 2,400 students at 16 branches, nine of them in mainland China itself. This generation "thinks their future is in China. Why bother going to the U.S.? My friends encourage their children to go to China."

The rise of the Middle Kingdom has clear parallels with America in the last century, when it became a magnet for people from around the world, said James McGregor, author of the best-selling book, "One Billion Customers: Lessons from the Front Lines of Doing Business in China."

"This is a continental-sized economy being built from scratch," he said. "Everyone used to go to America because it was the global happening place. Now this is the global happening place."

McGregor, a former journalist who runs a business consulting firm in Beijing, advises those who want to head to China to bring an open mind, a sense of adventure and an appreciation for the absurd.

The other key to making it? Solid language skills.

"If you're going to be an entrepreneur, you need to sink into the culture," he said. "Any 20-year-old American thinking of doing business in China one day and not thinking of learning Mandarin is not thinking."

America has been infected by China fever. At U.S. colleges, the number of students studying Mandarin jumped 51 percent between 2002 and 2006 to 51,600, according to a Modern Language Association survey. The increase is significant, although many more students -- 800,000 -- still study Spanish.

Last year, more than 3,000 high school students took an Advanced Placement exam for Chinese language offered for the first time. And some 500 U.S. high schools, junior high schools and elementary schools offered Mandarin, nearly double the number in 2004, says Shuhan Wang, executive director of Chinese Language Initiatives for the Asia Society.

Illinois, Ohio, Minnesota, Wisconsin, Utah and Indiana are the states pursuing Mandarin instruction most aggressively, a sign of how seriously China's economic and political rise is being taken, she said.

It's a message that 26-year-old musician Skot Suyama from Seattle has taken to heart.

Suyama, whose clean-cut boyish looks hint at his mixed heritage -- half Swedish, half Japanese -- has spent the last several years in Hong Kong and Taiwan, creating a mix of hip-hop, pop and grunge music. His skills are in demand, because there are fewer people in the region trained in creating and producing music than in the U.S.

With only rudimentary Chinese, he penned the lyrics for "Duibuqi, Xiexie" (Sorry, Thank you) a few years ago, which became a big hit for Hong Kong pop singer Eason Chan in mainland China and elsewhere. However, Suyama has held off diving headlong into the Chinese music scene in part because laws protecting music copyright and guaranteeing royalties are simply not enforced.

"Musically, everything in China is wide open. 'Duibuqi' was huge, but I didn't get any royalties from it (in mainland China). Only in Taiwan, Singapore and Hong Kong," he said.

For now, he is focusing on improving his Chinese. He and his Vietnamese girlfriend, Tran Ngoc Binh, spend three hours a day in a class of nine students at the Taipei Language Institute. Their classmates are from Australia, Belgium, France and Austria.

As their teacher goes over the grammar lesson for the day, they painstakingly repeat her phrases, careful to enunciate the rising and falling tones that make Mandarin so difficult. Suyama believes the payoff will be worth the pain.

"If I could go to the mainland now, I could make money," he said. "Right now in China, there's people who don't know the price of a song. You could find someone to pay you $50,000 to write a song. If you've made a name for yourself, you can make it big there."

It's something that entrepreneur Joseph Green, 36, saw coming a decade ago, when he first moved to Taiwan to study Mandarin after getting an MBA in 1997.

A native of Houston whose heavy southern drawl disappears when he speaks rapid-fire Mandarin, Green said he feels lucky that he concentrated on Chinese when "China wasn't even on the map." Now, his friends and family congratulate him on being farsighted.

Green, who has worked in China and Taiwan, launched an Internet Web site (www.chinglish.com) recently that seeks to make English-Chinese communication easier.

Chinese "won't supersede English but it's so big that it stands a chance of being integrated into the mainstream in the way that English is," predicts Green, who is now pursing advanced Mandarin at the elite National Taiwan University. "Even the normal person in Texas is saying, 'Holy cow. This is it. I've got to learn Chinese.' "

Can China Be Ignored?

2008-03-07T19:15:00.000-08:00

If Not, Can Your Firm Afford to Do Business There?

By Joan Keston, Keston & Associates

Editor’s note: “International Business Corner” is a weekly column written by Joan Keston that provides information for people involved in or considering international operations. Keston is an international business consultant. Over the next several months she will be writing about important issues that international businesses face as they compete in the 21st century global business environment. This article discusses costs of doing business in China, and effects for small and medium sized businesses.

When discussing the cost-benefit analysis of how to do business in developing countries, one factor that is extremely critical and especially significant for small- and medium-sized businesses is the initial cost to enter that market in either a direct approach, i.e., establishing a subsidiary or becoming part owner of a company, or an indirect approach, i.e., contracting with a representative, distributor, etc.

This cost analysis is also important in the case of outsourcing, whether you establish your own production or purchase from independent sources.

Can China Be Ignored?

China, and India to a lesser extent, cannot be ignored in current and, increasingly, in future business situations. Other developing countries, while presenting opportunities and undergoing tremendous growth, do not have the population and thus the sheer market force that the China has. Free-trade discussions and debates are irrelevant when considering China. We cannot unilaterally or even multilaterally impose restrictions or control the impact of China on global business. The development road that China is on will not be a smooth ride. China faces extreme domestic challenges that will affect its growth. However, it appears that China is here to stay.

One factor that must be considered when weighing the costs and benefits of doing business with or in China in developing your corporate strategy is the future of your business if you ignore China. Global business has been changing drastically over the past five years and will continue to do so. Where will your company be five to 10 years from now? Can you afford to ignore China for now? If you wait, will you be too late?

Can You Afford to Do Business in China?

Regardless of how you plan to do business in China, you must realize that China is a relationship-based country and factor this into the costs for your strategy. Having a written contract, even one written and negotiated by the best and most expensive attorneys, may not help you when it comes to enforcing the terms and conditions of your transaction. Who you know is critical in ensuring that your business dealings are successful. It is important that you begin to develop critical relationships from the very beginning, not when problems arise.

An added factor is that the government has the ability to change laws and affect your business in ways not accepted or even imagined in the U.S. The rule of law is not a well-established concept in China’s business culture. You can lose your business advantage overnight to a local Chinese enterprise supported by the government. Relationships are critical in establishing your venture and ensuring the viability of a successful one.

The costs of developing those relationships can be quite high, given the logistics of China (e.g., the cost for an economy ticket, to say nothing of business class, which is often a requisite of professionals needed in your business), the language barrier and differences in business culture, for example.

Challenges for Small- and Medium-Sized Businesses

Given the realities of doing business in China, how does a small- or medium-sized business address or handle the challenges?

The costs of international business are a hurdle that companies must overcome to become global. Small- and medium-sized companies must carefully analyze their readiness for global business before they begin. If entry into the global business arena is inevitable, then they must be prepared and creative.

About the author: Joan Keston is the Managing Principal of Keston & Associates, Ltd., an international business consulting firm located in Raleigh, NC, and a Partner at Paladin and Associates, Inc. She has 25 twenty-five years of experience with mature as well as entrepreneurial companies, domestically and internationally, coupled with an executive managerial and legal background. Her firm facilitates international business transactions, and assists companies establish, grow and integrate their international operations. She can be reached at (919) 881-7764 and jkeston@kestonassociates.com.

Doing business in China By the Book

2008-02-01T10:02:00.000-08:00

Choose wisely from the torrent of books on doing business in China!

BUSINESS books on China are published so frequently these days, it seems there is a secret factory churning them out. Too many read like the mass produced goods for which the country is famous—and too few are written from real experience of living in China.

Managing the Dragon (Crown; $27.50), Jack Perkowski's story of his almost 13 years running Asimco, an automotive components maker, in China is therefore a rare treat—a first-hand account of the struggle to build a business there. Tim Clissold, Mr Perkowski's former colleague, has already described how Asimco's Chinese partners cheated it out of millions, in his riveting 2004 book, “Mr China”. But Mr Perkowski hung on, and his wise and ultimately optimistic account should be required reading for anyone starting a business in China. Mr Perkowski is sensible on every issue—from the need to nurture (and listen to) local managers to the relative importance of local over central government relations. Most of all, foreigners must not shun the impossibly cut-throat local market because the price paid for a product in China today will be its price globally tomorrow.

This is what The China Price (Penguin Press; $25.95) is all about. As a former Financial Times journalist covering the Pearl River Delta, Alexandra Harney visited scores of factories in the workshop of the world, talking to owners, workers and Western buyers. Her account, packed with local colour, helps readers smell the sweat on the shop floor. But Ms Harney's bleak conclusion that cheap Western goods are bought at the cost of worker exploitation in China is predictable and naive, flying in the face of the migration of millions from rural misery to the comparative riches offered in a Guangdong factory.

There is a gloomy message too in Beware the Dragon (André Deutsch; $37.25 and £18.99). Erik Durschmied, a veteran war correspondent, gallops through 1,000 years of Chinese history and sees only misery and bloodshed, from Genghis Khan to the Korean war. Apparently, the mainland was even responsible for the bubonic plague in 14th-century Europe, which spread west from unburied corpses after an earthquake in southern China. Mr Durschmied concludes that China will cause more upheaval in future, though he cannot decide whether it will attack a rival, such as Japan, start a trade war that becomes a real war, or simply implode and drag others into its civil infighting.

A more reassuring perspective on whether China can rise peacefully to superpower status is provided by David Kang, a professor at Dartmouth College, New Hampshire. He argues convincingly, if dryly, in China Rising (Columbia University Press; $24.95 and £14.95) that while the ascent of a great power should be destabilising, China's economic rise since 1978 has anchored East Asia's prosperity—and that most other countries in the region prefer a strong China to a weak one. Even Japan and America, he predicts, will accept this reality in time.

Of less value to students of China are two books that purport to provide the most value of all. Both A Bull in China (Random House; $26.95, John Wiley; £14.99) by Jim Rogers, who shot to fame as the “investment biker” and From Wall Street to the Great Wall (Norton; $26.95 and £16.99) by Burton Malkiel and Patricia Taylor, claim they will help readers to profit from China's boom. But their tutorials on the merits of various mainland assets are cursory and Mr Rogers's virtual tipping of individual shares for an American audience seems downright irresponsible. If proof were needed that there is a bubble in Chinese stocks, this is it—and that goes for books on China too.

US Firms Say China Costs Rising

2007-12-16T07:01:00.000-08:00

SHANGHAI, China (AP) — China may be losing its competitive advantage, mainly because of rising costs, according to a survey of companies compiled by the American Chamber of Commerce in Shanghai.

Rampant product piracy was another persistent problem highlighted in a report released Friday that was based on a survey of the group's 1,600 corporate members.

"Some companies mentioned plans to move offshore to India or Vietnam," said Norwell Coquillard, president of Cargill Investments China, an investment holding company of agribusiness giant Cargill Inc.

Still, he noted that most companies with operations in China were still planning to expand capacity on the Chinese mainland, often while moving factories and offices inland to smaller cities where costs are lower.

For many U.S. and other foreign companies, finding, paying for and retaining good employees remains the biggest challenge, the report said.

"More investment has come in and stretched the supply of talent," said Stephanie Liu, human resources director in the Asia Pacific for Armstrong World Industries, a maker of flooring and building products. "There's no sign of easing in the short term," she said.

Meanwhile, a new labor law, due to take effect next year, has increased uncertainties over hiring and firing practices.

The Labor Contract Law, which takes effect Jan. 1, gives employees who have worked at a company for more than 10 years the right to sign contracts protecting them from being fired without a legitimate reason.

Some companies worry that the law might restore the "iron rice bowl" of lifetime employment practiced by China's state sector during the era of central planning that followed the 1949 communist revolution, said Kent Kedl, general manager of the consulting firm Technomic Asia.

But Kedl said most U.S. companies had little to fear because their employment policies were general in line with international standards, unlike those of smaller local companies that often dismiss workers en masse to avoid paying bonuses, among other things.

"We don't foresee a huge impact here," he said.

The report also said that the recent spate of product recalls of products ranging from tires to toothpaste due to safety and quality concerns is prompting U.S. businesses to become much more vigilant over how their products are made.

Virtually all the companies surveyed were raising standards, stepping up inspections and requiring more detailed specifications, though few said they would stop using products or materials made in China.

Problems with piracy of technology and products remained more or less unchanged from earlier surveys. Such problems are a perennial headache for both domestic and foreign companies operating in China: U.S. businesses say they lose billions of dollars each year due to the lack of effective enforcement of copyrights, patents and trademarks.

Despite the difficulties of doing business in China's unpredictable, fast changing markets, most companies said they were profitable in 2007 and that their profitability improved.

"Business performance and financial results show many firms are realizing the market potential that China has long promised U.S. companies," the report said.

MegaMeeting.com Video Conferencing Allows Novum Structures, LLC to Meet Simultaneously with Germany, China and Florida Offices

2007-09-14T13:08:00.000-07:00

Never before has it been easier and more cost effective for Novum Structures, LLC to conduct meetings with their international and local offices. Prior to implementing MegaMeeting.com's browser based video and web conferencing services, the company had to incur enormous travel expenses and their employees' time was not used as effectively due to their travel schedule.

Heidi Johnson, Novum Structures' Office Coordinator, finds MegaMeeting's Presenter feature valuable in their meetings. “The Presenter feature has been extremely useful during technical meetings with our colleagues in China . Our team can ‘present' an AutoCAD drawing and use the markup tools along with audio to make sure everyone is on the same page. It helps bridge the gap created by great distance.”

Novum Structures is a specialty contractor for high-technology spatial architectural structures and enclosures. The company has 20 years of experience with close to a thousand projects performed in 16 countries.

Novum Structures currently uses MegaMeeting to conduct meetings for their purchasing and engineering departments, as well as for their executives. In addition to conducting company meetings using MegaMeeting video conferencing software, they also use the products to train employees and for quality assurance by using the products to diagnose issues.

The specific features of MegaMeeting that Novum Structures implements most often are the video conferencing capabilities that allow meeting attendees to see each other, the built-in audio (VoIP) and the screen sharing. Novum Structures chose MegaMeeting over other web and video conferencing companies because of the screen sharing feature. In the future, Novum Structures anticipates using MegaMeeting products to conduct meetings with their clients.

About MegaMeeting.com

MegaMeeting.com is a leading provider of 100% browser-based Video & Web Conferencing solutions, complete with real time audio and video capabilities. Being browser based and working on all major operating systems – Windows, Mac & Linux; MegaMeeting.com provides universal access without the need to download, install or configure software.

MegaMeeting.com web conferencing products and services include powerful collaboration tools that accommodate robust Video & Web Conferences, including advanced features such as desktop/application sharing, i.e. Word and Excel documents and PowerPoint presentations without the need to upload any files. MegaMeeting is ideal for multi-location web based meetings, virtual classrooms, employee trainings, product demonstrations, company orientation, customer support, product launches and much more.

For more information please visit MegaMeeting.com or call (952) 955-6346

Thunderbird's Online Doing Business in China Program Fills Unprecedented Need in Today's International Business Education

2007-07-11T20:32:00.000-07:00

TAMPA, Fla., July 11 /PRNewswire/ -- In the current wake of tainted Chinese imports, it's more important than ever professionals understand the unique nuances of the world's fastest growing economy. Thunderbird School of Global Management, repeatedly ranked #1 in international business by major publications around the world, is addressing this distinct demand with its new Doing Business in China program.

This comprehensive, one-of-a-kind online certificate program teaches the dynamics of contemporary Chinese business, and comes at a time when more and more companies are facing challenges in this largely unknown, developing market. A recent article by USA TODAY shed light on China's product safety issues and its rapid economic growth. "China is in the midst of an enormous transformation from an isolated, centrally planned, mostly rural nation into a fiercely competitive economic dynamo. Since joining the World Trade Organization in 2001, the country has overhauled thousand of laws and regulations to bring itself in conformance with the global economy's dictates." *

While businesspeople in China work to initiate quality initiatives, it's imperative they fully understand the country's government, its culture and its politics. Olivier Bouclier, Thunderbird's senior director of Corporate Learning and Executive MBA program said, "The cultural, geographical and economical challenges in China differ significantly from those of any other civilization. Therefore, companies and their executives need to learn how to interact with Chinese people, companies and administrations."

Learn How to Do Business in China - From Anywhere in the World

Doing Business in China is an eight-week program, offered 100% online and, comprised of four components: The Cultural Navigator(TM) and three lectures including interviews with businesspeople addressing challenging topics and critical case studies.

Dr. Roe Goddard, associate professor of global business at Thunderbird and a highly respected and frequently published scholar on the Chinese business environment added, "With the right training and preparation, foreign companies can and will be successful in China. ... Companies operating in or considering business in China will stand greater chances of success if they understand certain nuances of the Chinese economy, its political climate and its social and cultural environments."

The program's online multimedia technology is provided by the University Alliance Online. Students experience an interactive online learning environment through streaming audio/video lectures, faculty-monitored chat rooms and message boards. Students can log in at anytime, anywhere they have access to the Internet.

For more information about Doing Business in China, please call 800-605- 5278 or visit http://www.thunderbirdglobal.com/.

About Thunderbird School of Global Management and the University Alliance Online

Founded in 1946, Thunderbird is the first and oldest graduate management school focused exclusively on global business. It is regarded as the world's leading institution in the education of global managers and has operations in the United States, Latin America, Asia and Europe, including Russia.

Ranked No. 1 in international business by Financial Times, U.S. News & World Report, and The Wall Street Journal/Harris Interactive 2006 Business School Survey, Thunderbird is dedicated to educating global leaders who create sustainable prosperity worldwide.

The school's programs facilitate the development of the global mindset which is critical to managing effectively in different social, economic and political environments. More than 38,000 students have graduated from Thunderbird, and its alumni live and work in more than 140 countries. For more about Thunderbird, please visit http://www.thunderbirdglobal.com/.

University Alliance Online, with more than 300,000 enrollments to date, is America's largest exclusive provider of online certificate and degree programs from the nation's leading universities including Villanova University, the University of Notre Dame, Tulane University, Thunderbird School of Global Management, Saint Leo University, Regis University, Jacksonville University, The University of Scranton, the University of South Florida and Florida Institute of Technology. Program offerings include a broad range of professional certificates, as well as associate's, bachelor's and master's degrees.

*Lynch, David. "Do cheap Chinese goods have to mean trade-off in quality?" USA Today 3 July 2007. http://www.usatoday.com/money/world/2007-07-02-china-risks_N.htm Bisk Education

CONTACT: Natalie Speechley, Director of Marketing Services of Bisk
Education/University Alliance Online, +1-813-621-6200

Web site: http://www.bisk.com/
http://www.thunderbirdglobal.com/

Top-Ranked U.S. Business School Offers Entrepreneurial Immersion Trip to China

2007-06-18T06:53:00.000-07:00

The University of Chicago Graduate School of Business, ranked #1 in the latest business school ranking by Business Week, is offering an entrepreneurial immersion trip to China August 26 to September 4, 2007.

The University of Chicago Graduate School of Business, ranked #1 in the latest business school ranking by Business Week, is offering an entrepreneurial immersion trip to China August 26 to September 4, 2007. (http://ChicagoGSB.edu/entrepreneurship/immersion)

"The trip will help facilitate meaningful business networking and help novice entrepreneurs overcome some of the major obstacles to doing business in China," said Linda Darragh, director of entrepreneurship programs at Chicago GSB. The obstacles include cultural norms, business regulations and processes, financial practices, language issues and transportation, she said.

The trip, offered by the school's Polsky Center for Entrepreneurship (http://ChicagoGSB.edu/entrepreneurship), will also familiarize participants with key cities in China including Dalian, Beijing, Shanghai, Hong Kong and Macau. Participants will learn from U.S. companies already operating in China, meet with Chinese government officials and U.S. trade directors, and network with Chinese entrepreneurs and investors.

The trip also includes a tour of Chinese entrepreneurial companies to learn the benefits and challenges of working with local partners in China, and a visit to a major research park to understand incubation strategies offered to Chinese entrepreneurs by local economic development organizations.

A signature event of the trip is a visit to the Shanghai Knowledge and Innovation Community, where high-tech entrepreneurs, educators, researchers, and venture capitalists will meet, network and work together. The facility, now under construction, is scheduled for completion in 2010. Vincent Lo, developer of the facility and one of the leading entrepreneurs in China, will speak to participants.

Chicago GSB has been teaching courses in Asia since 2000 when the school opened a permanent campus in Singapore for its Executive MBA Program (http://www.chicagogsb.edu/execmea/index.aspx).

For more information about the entrepreneurial immersion trip to China, or to register, contact Linda Darragh at 773-702-9108 or by e-mail.

The University of Chicago Graduate School of Business is one of the oldest and largest business schools in the world. The school's faculty includes many renowned scholars and its graduates include many business leaders across the U.S. and worldwide. The Chicago Approach to Management Education is distinguished by how it leverages fundamental knowledge, its rigor, and its practical application to business challenges.

Chicago GSB offers full-time and part-time MBA programs, a PhD program, open enrollment executive education, and custom corporate education. The school has campuses in London and Singapore in addition to two campuses in Chicago. More information about Chicago GSB can be found at http://ChicagoGSB.edu.

The new entrepreneurs

2007-05-28T06:00:00.000-07:00

Study links immigration to growing trade with China

The Cheung Kong Graduate School of Business in Beijing is only five years old, but it is quickly catching the attention of China's top executives.

The CEO of the country's largest property-development company is a few months from finishing his executive MBA there. The owner of Yahoo! China is a graduate.
Recently, the school chose Vancouver as the home of its first overseas alumni chapter and celebrated the occasion with a reception at the Westin Bayshore Hotel.
Many in the little hub of about 30 guests that gathered represent a new breed of immigrant entrepreneur, one that darts back and forth, building business on both sides as trade between China and Canada grows.

A new report by two University of Toronto sociologists, released by the Asia Pacific Foundation, examines the recent influx of immigrants from China, such as these Cheung Kong alumni, and their role in helping Canada tap China's rising economy.
Wenhong Chen and Barry Wellman found that there is a positive relationship between the inflow of immigrants and bilateral trade. Between 1995 and 2005, each increase of 1,000 in the number of immigrants from China was associated with about a $700 million increase in Canada's trade China, Chen said in a telephone interview.
"The research started with discussion that it is often hard for skilled immigrants to find jobs that fit their qualifications.

"Mostly, it has been commonly accepted that immigrants should just adapt. The value of their connections to their home country has been ignored. But these are contributing to business."

She did much of the field research by infiltrating business association meetings, monitoring Chinese chat rooms and websites, conducting almost 70 personal interviews and coordinating larger random sample surveys that yielded more than 300 replies in Toronto and Beijing.

What she discovered was that these new immigrant entrepreneurs are not necessarily the same as their counterparts a generation ago.

Back then, many were nicknamed "astronauts" because they spent so much time flying back and forth between Canada and China, including Hong Kong; but, really, many left their families in Vancouver or Toronto and stayed overseas for longer periods, usually returning just in time to meet minimum residency requirements.
This new generation of immigrant entrepreneurs still clocks plenty of air miles; however, the difference now is that their success depends on doing well in both China and Canada, Chen said.

"They are sometimes caricatured as calculating opportunists who obtain citizenship as a travel document or an insurance policy against potential social or political turmoil in their countries of origin," Chen and Wellman wrote in their report.
"Our interviews with returnee entrepreneurs in Beijing suggest that this view may be exaggerated. Just as they did not cut off their home country ties when they emigrated to Canada, most returnees keep close social and business relations with Canada."

A quick scan through some business cards suggests as much. James Wang, vice-president and marketing director of Canadian Overseas Holdings, runs various businesses aimed at the mainland Chinese market in Vancouver. He also oversees the Blenz coffee brand in China.

When he is not at his Marine Building office in downtown Vancouver, he is often on business in Beijing or in his hometown of Xian in central China. So, his business card very practically lists one active cell phone number for Canada and one for China.

"I have many friends who put their China cell numbers on their business cards as well . . . . We try to keep the connections. I can even receive Chinese text messages (here in Vancouver) from my friends in China," Wang said in an e-mail.
Rui Feng, CEO of Silvercorp, the Vancouver-based, TSX-listed company that produces silver in China, also has two numbers on his card.

It is telling that when a reporter tries to track down a few of the Vancouver-based Cheung Kong alumni after their inaugural event, the contact details are all China cell-phone numbers, even though they might ring through just down the block in Vancouver.

Some of these execs keep their China and Canada cell phones on round the clock, to cover all the bases -- that is, who might call and from which time zone.
It's definitely a hazard of what Chen calls "glocalization."

"They have to have global connections, but they also have to maintain local interactions too," he explained.

Dean Xiang Bing of the Cheung Kong Graduate School of Business in Beijing put it this way in en e-mail: "Many of our EMBA alumni are at the peaks of their careers, and represent the best and brightest entrepreneurs driving the Chinese economy.
"While opportunities abound within China, we encourage our alumni to go global. With globalization, entrepreneurs are free to operate beyond national borders, so a back-and-forth movement between China and destinations such as Vancouver is becoming more established business practice."

China on Slow Journey to Win Western Outsourcing Business

2007-05-04T09:30:00.000-07:00

Lots of observers have speculated about China’s ability to challenge India’s outsourcing supremacy and concluded that China has a pretty good shot at doing so.

China is working hard to move up the outsourcing food chain, by forging relationships with tech heavyweights like Oracle, Microsoft and IBM.

Yet more than half of China’s total $1.4 billion offshoring market still involves low-end tasks such as software testing, according to CCID Consulting, an analyst group sponsored by the Chinese government that focuses on the country’s IT sector. Chinese outsourcing providers are performing more sophisticated chores for companies in Japan and Korea, which together account for 60 percent of China’s offshoring business.

Western markets seem less interested in China. The country finished a surprising third – behind India and Russia but ahead of Brazil — in a recent silicon.com survey that gauged the interest of readers (largely Brits, we assume, based on the site’s strong UK slant) in offshoring to those locales. India, cited by 38 percent of respondents, finished well ahead of China’s 18 percent.

Protecting intellectual property is a key concern for Western firms doing business in China, as well it should be, notes SandHill.com blogger David Scott Lews. “The key problem is that Chinese people don’t perceive that they’re doing anything wrong when they use/borrow/steal someone else’s IP,” says Lewis, whose company offers offshore development in China. That’s why software piracy is such a big problem there.

Despite these concerns, most Western corporations won’t be able to resist the lure of marketing goods and services to China’s huge consumer market. Most experts agree the country will see a big influx of business from companies that see the need to establish partnerships with Chinese firms, in order to cost-effectively manufacture and sell goods there.

A similar trend is already playing out in India’s more mature market, where the number of electronics companies that manufacture goods in the country is expected to rise by 63 percent over the next two years.

Doing business in the global economy

2007-02-25T20:24:00.000-08:00

Executives from some of the nation’s leading companies discussed the ins and outs of competing in a global economy as members of a panel at Campbell University’s Lundy-Fetterman School of Business. Included on the panel were Tom Rabon, executive vice president of Corporate Affairs for Red Hat; Diana Allen, senior counsel at Cree Inc.; Richard Kahler, former president of Caterpillar’s China operations; and David Robinson, an attorney with extensive international legal experience with operations in Mexico and South America.

Sharing their views on everything from how to build business relationships to the importance of learning how different cultures shake hands, the panel concluded unanimously that global negotiations can be tricky.

Diana Allen, of Cree, is a graduate of Duke University law school who speaks German and Japanese. Cree is the leading innovator in the manufacture of semi-conductors that enhance the value of light emitting diodes or LEDs. The LEDs have many applications, including cell phones, computers and parking lights. Approximately 80 percent of the company’s revenue comes from international sales.

“Global sales are key to our company’s success,” said Allen. “We’re trying to expand sales through new distribution methods and people on the ground in Europe and Asia. There is an old Japanese proverb that says to catch a tiger cub you’ve got to go into the tiger’s den, that’s what we’re trying to do by subcontracting overseas. We’re always looking at what we should do next to be successful in the global market.”

Richard Kahler, who spent nine years in Hong Kong as president of Caterpillar’s China operations, helped create a worldwide marketing arm for Caterpillar in China. He emphasized the importance of learning a country’s language and culture before you begin negotiations.

“In the Chinese business environment culture and heritage are everything,” he said. “The public perception of the Chinese work ethic is that it is never-ending, but the whole country shuts down for a week to celebrate the Chinese New Year. The word ‘yes’ doesn’t necessarily have the same connotation in China as it does in America either. The Chinese say ‘yes’ to acknowledge they hear what is being said.”

Still the growth rate of the Chinese economy is very dramatic, Kahler said. Just a few years ago the average per capita income in China was only $1,000 a year; today it is 10 times that, but it is still a fraction of what the average American earns.

“That is the Chinese labor advantage today and why they’re so extraordinarily competitive in the world market,” Kahler said.

Founded in 1993, Red Hat is one of the largest manufacturers of open source software in the country and one of the fastest-growing according to “Fortune Magazine.” Yet, Tom Rabon, executive vice president for Corporate Affairs, said intense global competition makes him worry about the ability of his 10-year-old son to get a good job in the future.

“The competition in the world today is very tough,” Rabon said. “However, there is no better place than America for people to be free, curious and passionate about an idea. That’s our defense against global competition.”

According to Rabon, Red Hat is now helping to develop a lap-top computer that will be affordable to everyone and used by governments of developing countries.

“Education is the great equalizer,” he said. “America is one of the few places where you can climb the ladder of success no matter who you are or what level of society you are from.”

Attorney David Robinson agrees. “We’ve won the cosmic lottery by being born in this country,” he said. “You’re part of the economic elite of this world.”

Robinson, who is also president of BGA USA, the American subsidiary of a Canadian company that converts waste into energy, said he sees the “green” alternative to fossil fuel revolutionizing the global economy.

“Farmers in China are already growing crops to sell for energy,” he said. “Eventually, cows are going to be more valuable for their waste than for their meat.”

The panel on globalization was part of Campbell’s second annual RBC Centura Business Week, Feb. 12-14. The week also featured a dinner for seniors and 3/2 MBA students at the RBC Center in Raleigh, round-table discussions with representatives from the business community and friendly, recreational competitions.

Photo Copy: Dr. Derek Yonai, Lundy Chair, and David Robinson, an attorney specializing in international business, chat during RBC Centura Business Week activities at Campbell’s Lundy-Fetterman School of Business.

China Trade Magazine Debuts

2007-01-13T14:38:00.000-08:00

New Publication Will Profile Success Stories of Small as Well as Large Western Companies Operating in China

The founders of Latin Trade Magazine and Latin CEO today announced the January, 2007 launch of China Trade magazine, the first mainstream publication exclusively dedicated to the world of trade and investment between U.S. companies and the People’s Republic of China. Western businesses with an interest in the Chinese marketplace can now look to one source for all the crucial information they need to know about this burgeoning marketplace. Presented with stunning photography, graphics and text, the glossy publication will bring Chinese commerce and culture to life and provide a balanced approach to conducting business in this intriguing country.

China Trade will also showcase the successes of small-to-medium-sized enterprises (SMEs) in China as well as the major multinationals. As the largest growing segment of American business, SMEs are rapidly making China a top priority target for sourcing and selling. While Fortune 1000 companies have been operating in China for more than 20 years, the current wave in Sino-American business involves tens of thousands of mid-size companies entering the Chinese marketplace. A must-read for Western SMEs, China Trade will tell the story of how these organizations are successfully navigating the dynamic and often intimidating landscape of the vast Chinese marketplace.

“China Trade is an indispensable tool to help SMEs and larger U.S. companies access this growing economy,” said J.P. Faber, editor-in-chief, China Trade. “Opportunities within China are exceptional not just for the major players, but for small and medium sized businesses as well. And for all US companies, China is no longer just an export market – its rapidly expanding middle class has a growing appetite for Western products.”

The new magazine will also report on the latest regulatory, political and legal issues. “The goal of China Trade is to arm Western companies with all the information necessary to succeed in China,” said Faber.

China Trade will go beyond the usual offerings of dry business magazines to discuss Chinese art, executive dining and entertainment, travel options, and various aspects of Chinese society. It will provide in-depth information about specific Chinese cities that are up-and-coming business centers, from Cheng Du to Wuhan, and enlighten its readers about regional Chinese culture and ethnicities.

China Trade will also address current misunderstandings and misperceptions surrounding U.S./China relations, explaining why such factors as the trade imbalance, Chinese holdings in U.S. foreign reserves, and the west-to-east transfer of wealth actually benefit the American economy.

“The reforms taking place in the Chinese marketplace are incredible,” said Faber. “As China conforms to international standards and continues on the path of expanding economic freedom it becomes an increasingly attractive opportunity for U.S. Companies and investments.”

Blending an insider view of leadership trends, business execution, financial news and economic policy, China Trade is the definitive read for anyone interested in doing business in the world’s biggest market. Each month, China Trade will:

• Track all the key industries relating to China, providing insight into the ideas and innovations of the marketplace.

• Demonstrate how such trailblazers as Wal-Mart, General Motors and KFC have successfully entered the Chinese marketplace – and how smaller companies are following suit.

• Monitor the important economic indicators about China and its relationship to the world economy, including the latest activities of Chinese equities.

Loaded with engaging photos and stimulating writing, the inaugural issue of China Trade will be available in January, 2007. With an initial circulation of 88,000, the magazine will reach over 50,000 corporations throughout the US, Canada and Europe and will be found in over 2,000 offices of US/Western companies in the PRC and Hong Kong – as well as on the newsstands of key trading cities.

For more information, please contact: B. Perkins bperkins@chinatrademag.com
786 472 9088

Airlines vie for profitable China route

2007-01-05T20:17:00.000-08:00

KAI RYSSDAL: The capitalist world is beating a path to China's door. But it's having a tough time booking a flight. There's booming demand for seats to Beijing and Shanghai. There just aren't enough of them. The Chinese government has approved one additional route from the States. And the Department of Transportation is about to give it to one lucky U.S. airline. Ramy Inocencio explains a lot's riding on thin air.

RAMY INOCENCIO: An air ticket to China is a rare commodity. The simple reason is the country rations the routes it grants to foreign airlines in order to protect its own carriers. So, when a new direct U.S.-to-China air route was opened for bidding, U.S. airlines lined up.

Airline analyst Darryl Jenkins, says it's a potentially huge cash cow.

DARYL JENKINS: The demand for travel to China is growing by leaps and bounds. There are more people willing to pay very, very high fares than there are seats right now.
A first-class or business round-trip ticket can run as high as $12,000. Prices like that could add as much as $150 million annually to the bottom line of the winning bidder. In the running are United, Continental, Northwest and American Airlines.

UNITED AIRLINES PROMO, ROBERT REDFORD: "United. It's time to fly."

Flying highest, says Jenkins, is United with its proposal to connect Washington, D.C., to Beijing.

JENKINS: Anytime you hook up both capitals, that generates an incredible amount of public interest.

The capital-to-capital connection will likely be a big factor: 28 countries in the world have nonstop service from their capital to Beijing. So far the U.S. doesn't.

United's Senior Vice President Mike Whitaker plays up the trade benefits of a D.C. to Bejing connection.

MIKE WHITAKER: Washington has over a thousand high-tech companies. Most of those you can expect are doing business in China.

But Continental also a strong contender, with its Newark to Shanghai proposal. The company only has a few routes in Asia which may work in its favor, says Jenkins, because the D.O.T. likes to keep the field competitive.

JENKINS: Certainly if I were Continental and I were lobbying on their behalf, this is the thing that I would be bringing up.

Jenkins' pick for a third-place finish is Northwest and its Detroit to Shanghai route with American Airlines dead last. The company had asked its pilots to add an extra hour flying time for a direct Dallas-Beijing flight but couldn't clinch a deal. The unfortunate result: a stopover on the way.

JENKINS: When everybody else is direct and you have a one-stop going over, your chances decrease pretty, pretty fast.

The new flights to China take to the skies on March 25th. And the Chinese will open only two more new routes over the next four years, despite ever-rising demand. That means ticket supply will continue to be limited, and the prices sky high.

National City introduces consulting service for doing business in China

2006-12-18T08:35:00.000-08:00

National City Corp. has established the National City China Advisory Service, a consulting practice to help medium and large corporate clients with business affairs in China.

The practice, which operates under National City's Global Trade & Treasury group, will be led by Alfred Ho, formerly National City vice president and manager for Asia Pacific and executive vice president for National City Trade Services.

"Given the size of its work force, consumer market and its unprecedented economic growth, China represents a dynamic opportunity for clients who wish to initiate or expand business internationally," Ho said in a news release. "At the same time, though, doing business in China can be daunting, and many unanticipated challenges can arise."

Consulting services cover a range of areas, including supply-chain management, market penetration and expansion, brand management, labor practices and patent law and international banking and treasury management.

Cleveland, Ohio-based National City Corp. (NYSE: NCC) is the largest bank in the Louisville area based on total deposits, according to Business First's list of banks, published Jan. 27. The company operates about 50 branches in the area.

2006-12-07T13:01:00.000-08:00

What this is
Instantly show your computer screen to anyone online. Everything you see, your guests can also see – in true color quality.

Give professional presentations and online product demos
Show your computer screen online to up to 20 guests. You can easily show any presentation or document and demo any software application.

Provide remote support and remote maintenance
Switch presenter rights to see the computer screen of your customer. Request remote keyboard and mouse control and solve problems fast and easily.

Organize secure online meetings
Collaborate online, jointly edit documents, coordinate teams remotely, save on travel costs and time.

Conduct online training and webinars
Train coworkers and customers over the Internet. Reduce training costs and distribute knowledge faster throughout the company and with customers.

Our program is incredibly fast, unbelievably easy, and completely secure. Boost your productivity, save time and money. You can use it much as you want for one low flat fee.

Check it out!

Doing business in China: what to do and what not to do

2006-11-19T10:27:00.000-08:00

By Craig Reeder

The nine years I spent living and working in China were the richest and most rewarding of my life. But coupled with the excitement and exhilaration of learning about a new land, were numerous awkward moments, misunderstandings, and embarrassing blunders, through which I learned much about Chinese customs, culture and etiquette.

Let's start with basic greetings. Shaking hands is a western custom the Chinese have adopted, but take care to avoid unnecessary physical contact aside from that. Furthermore, in business, you will always be expected to exchange business cards. Always present and accept cards with both hands, which is considered respectful.

Just as we have difficulty with Chinese names, they also stumble over our western names. If at all possible, you should take a Chinese name for yourself. In China, the business card typically has English on one side and Chinese on the other. Avoid using a Chinese name chosen to sound like your English name. That seems strange and artificial to Chinese ears. It's far better to have a Chinese friend pick out a real Chinese name for you; the simpler the better. My Chinese name was comprised of two simple and familiar characters that were easily remembered by my Chinese friends, and made greetings and introductions more comfortable for them. Anything that lowers barriers is a help.

Probably the most critical cultural concept to grasp is that of giving face, which means being respectful, and also reflects the great importance that Chinese culture places on appearances, even when they are in blatant contradiction to reality. In its extreme form, this means you should never say anything to a person's face that makes them look bad to others. To cause someone to lose face is unforgivable, and you will be burning your bridges if you commit this error.

One aspect of this cultural phenomenon that constantly causes misunderstandings and drives Westerners crazy is that Chinese people will rarely refuse something outright, or give a direct no answer to a question, even when the answer is clearly and unequivocally no. For Chinese, this would be considered rude, and cause a loss of face. For example, if you ask to arrange a meeting with a company executive, and you are told that it might be a bit inconvenient. That is the Chinese way of politely saying that it is completely out of the question and totally impossible. You will encounter this situation constantly in China. As long as you understand the Chinese custom of the indirect reply, you can avoid the common experience of westerners in China, namely, going insane with aggravation when people tell you one thing and mean something completely different.

Another useful thing to know is the importance of hierarchy and status. This goes back to Confucian values which remain the core of Chinese social values today. When you present your business card, you will notice your counterpart scrutinizing it closely. He or she will be looking to see what your title or position is. This allows him to determine how high or low in the hierarchy you are, and what degree of deference to show. In China, you must always be deferential to someone at a higher level in the hierarchy, or to someone senior in age.

It is because of this custom that a person's title is so important. If in doubt, it is always safe, if not wise, to address your Chinese counterpart by his or her title. This may sound stiff and formal to our ears, but in China, it is just being polite and respectful. Another tip: always escort your guests to the door when they are leaving. Chinese custom dictates that the higher the position of the guest, the farther out the door the escort should go. Little things like this seem insignificant in our informal culture, but they will have a great bearing on how you are perceived in China.

It may also be useful for you to understand what the Chinese think of us - what their stereotypes and prejudices are. Quite simply, they look on Americans as being good-natured simpletons, na•ve, crude and arrogant. By contrast, they see themselves in the context of a sophisticated culture that has thrived for millennia. We impulsively blurt out whatever is going through our minds. They keep their thoughts to themselves and speak in measured and carefully calculated words. These are only stereotypes, of course, but they can help you understand how the Chinese perceive our actions and behavior.

There is another key concept you need to know: the importance of food. If there's one lesson I learned more than any other in China, it is that food and eating are the most important part of life for Chinese. Dinners, banquets, and meals all take on great importance. Chinese people love food, and they love to talk about food. If you are ever stuck for small talk, talk food. If you are at a business dinner, do not rush into business topics before eating. Small talk, particularly about food, should always precede business.

One of the most embarrassing mistakes I made was when I invited an old Chinese friend to lunch. We Americans may not place much significance on a simple lunch, but that is never true in China. I wanted to eat at a rustic neighborhood dumpling place that day, but as soon as we walked through the door, I saw my friend's face flush. I was dishonoring her by not taking her to a more expensive restaurant. In China, how fancy the restaurant is, and how much you spend, sends a clear message about how highly you esteem your guest.

One very handy thing about eating out in China is that you never have to fight over the check. It is an ironclad rule in China that whoever makes the invitation is the person who will pay. No exceptions. There will thankfully never be a misunderstanding on that score.

Now, when it comes to business dealings, there are also some large cultural differences. Negotiations are long and drawn out; they demand enormous patience. I learned an important lesson on business negotiations from a cheerful hulk of a peasant at a Beijing marketplace once. He was showing me how they traditionally bought and sold merchandise. He demonstrated how his customer would place his hand into the pocket of his huge overcoat and make the hand signs for the offering price. Then the seller would reply with his hand in the same way, so that onlookers would not know what the final price was. The moral is this: there is no transparency in Chinese business, and everything - let me repeat that: everything - is under the table. By Chinese thinking, any other way of doing business would simply be foolish.

Furthermore, our western concepts of contracts do not apply in China. A contract is simply the outline of a general agreement, and it is subject to change and re-negotiation at any point in time. Never rely on a contract alone. On the other hand, what really counts is the personal relationship. Establishing strong personal relationships will take you farther along the way than a stack of contracts.

I learned this lesson from my last boss in China, a very astute Canadian guy who was the master of this game. He spent much time with the top managers of our Chinese Joint Venture partners playing golf, having dinner, and most importantly, pounding back massive amounts of liquor in karaoke bars. At one time, he challenged his counterpart to a dare: if their joint venture project was approved, they would both shave their heads bald. Some months later the project was approved, the ritual performed amidst much revelry, and a deep and sincere relationship was cemented. Over time, I witnessed the power of this relationship repeatedly. I saw many doors opened, important connections made, thorny problems resolved, and a successful and mutually profitable venture carried out smoothly.

A few more pointers may help, before I offer my final tidbit of wisdom. Chinese people are extremely ambivalent about their own government, but they possess a fierce national pride. Be wary of political topics. Never bring up Tibet, Taiwan, or human rights. Women should dress modestly and never show too much skin, and couples should avoid public displays of affection beyond a simple peck on the cheek. Be respectful, be modest, and don't take anything at face value. Chinese culture runs deep, and there is always more than meets the eye.

Editor's Note: Mr. Reeder now teaches accounting at Florida A&M University.]

Small Business Center and Business Incubator nurture entrepreneurs

2006-11-12T17:17:00.000-08:00

Lance and Carol Johnson don't just manufacture another fancy racing bike. They make what they call "bespoke bicycles," one-of-a-kind creations that start at $18,000 and can go well past $30,000 with everything from custom ceramic bearings, nitrate coatings, hand detailing and painting, anything a cycling enthusiast can dream of.

The Johnsons moved from the Bay area of California to Asheville for a lifestyle change. Now they're moving their company into the new Small Business Center and Business Incubator at Asheville-Buncombe Technical Community College's Enka campus.

New incubator
The new incubator, with 141,000 square feet and eight new tenants, officially opens its doors Thursday with a ribbon-cutting ceremony. Besides bikes, the incubator's businesses will be churning out new solutions in software and data management, custom cookbooks, electronic paging devices for restaurant patrons and other services.

With so much space, Russ Yelton sees the potential for the largest incubator on the East Coast.

"The beauty of the building is we have both a biotech center and a food kitchen. We have room for light manufacturing, executive offices and labs. We can support any type of business, with the exception of retail," said Yelton, the Small Business Center director.

The Enka campus once housed the research and development labs and factories of BASF before it was donated to A-B Tech in 2000. About $7.5 million has gone into the campus, renovating the old spaces for new offices and modern labs.

But what Yelton really wants to see is new jobs. With room now to house between 40 to 60 emerging companies, the incubator could be creating between 50 to 100 jobs annually for the local economy, with wages of at least $11 an hour.

Resources
Along with a cheaper rent on office space, the incubator supplies business training and resources to the entrepreneurs. That network was what appealed to Lisa Fournier of Shepherd Medical Solutions. A graduate of Western Carolina University, Fournier had been keeping an eye on the facility at A-B Tech over the last few years, watching the program slowly evolve.

When the incubator program officially open, Fournier wanted to headquarter her company here. A software developer based near Virginia Tech, the company has a new patent-pending program for medical data-sharing between physicians' offices. Fournier has already raised more than $1 million in investment.

She liked the idea of accountability, or opening her books to the Small Business Center staff, which is part of the lease agreement. With an extra set of eyes, Fournier thinks the company has a better chance for growth and success.

While only 20 percent of new companies are in business after five years, the survival rate for incubated businesses goes up to 87 percent, according to the National Business Incubator Association.

Trevor Lohrbeer, head of Lab Escape, is moving his Asheville software company into the new space as well. With just two years on the lease, the incubator prepares companies to grow up fast and leave. "We are aiming for five times our revenue growth, so we're going to have to hire on the sales side and the tech side," Lohrbeer said.

With its new partnerships with incubators in China and Mexico, the A-B Tech facility can also offer advice on doing business overseas, Yelton said. MBA students at the University of Fudan in China and now in Guadalajara, Mexico, will do market surveys, paving the way for Western North Carolina businesses.

With sales already in five countries, Lab Escape can use that kind of expertise, Lohrbeer said.

Fournier likes the company of other entrepreneurs, and finding encouragement maybe only a door down the hall with other incubator client. "A lot of people don't realize it's lonely. It's a hard road, and entrepreneurs are famous for working 24 hours a day."

Opening event
Asheville-Buncombe Technical Community College will have a ribbon cutting and open house at the new Small Business Center and Business Incubator at the Enka campus at 3 p.m. Thursday.

Seminar provides course on doing business in China

2006-10-29T15:50:00.000-08:00

The Minnesota Trade Office will offer China Practicum: A Compact Course on China on Wednesday, Nov. 8, from 8:30 a.m. to 3:30 p.m. in St. Paul.

The China Practicum is a day-long immersion course that quickly provides a basic understanding of China’s economy, culture, and business climate for those interested in doing business in China.

Date: Wednesday, November 8, 2006.
Time: 8:30 a.m. to 3:30 p.m. Registration begins at 8 a.m.
Location: Minnesota Department of Employment and Economic Development, 1st National Bank Building, 332 Minnesota Street, St. Paul, MN.
Cost: $75, if pre registered, $95 at the door, includes light breakfast, lunch and materials. Advance registration is highly recommended.

For more information contact Li King Feng at 651-297-1443 or by e-mail at li.king.feng@state.mn.us or Matthew Abbott at 651-296-4282 or by e-mail at
matthew.abbott@state.mn.us

To register, contact Gloria Henck at 651-297-3920 or e-mail mto.edu@state.mn.us

More information is available online at http://www.exportminnesota.com/PDFs/CP11-06WEB_1.pdf

Listen To Li Pan’s Promotion For eComXpo!!!!

2006-10-18T19:58:00.000-07:00

Click Here…

For Free Education,
Great Door Prizes!

Register For eComXpo And Win Great Door Prizes!

2006-10-17T15:57:00.000-07:00

Sign up at eComXpo, the online virtual trade show for eCommerce Marketers, October 24-26, 2006. eComXpo features all the benefits of a top traditional tradeshow without the cost, travel or hassle associated with traditional events.

Attendees and exhibitors will be able to interact with over 7,000 people via chat or email, attend educational presentations by top industry experts, visit over 300 booths in the exhibit hall and enter to win fantastic prizes.
Click below

For Our Great Door Prizes!

Call 800-771-4767 (ext.123) Today For

Special Pricing -- All 19 Programs
Your FREE $250 Online Shopping Spree!

Click Below For A Special Interview With Li Pan, CEO of Pan Trade

2006-10-09T17:27:00.000-07:00

Introductory Broadcast By Mr. Li Pan

2006-10-04T16:42:00.000-07:00

Please click below for the introductory Online Radio Broadcast by Mr. Li Pan, CEO of Pan Trade Business.

Case study: Smiths Group - doing business in China

2006-10-04T13:12:00.000-07:00

The local quirks of doing business in China

John Lytle the chief technology officer (CTO) of Smiths Group, a global engineering company, needed to expand his networking capabilities into China after the company entered the region.

China represents an increasingly important area of business both as a manufacturing location and a sales hub, according to Lytle.

‘We have made a strategic decision to go into China, driven by the size of the opportunity in that market as it emerges as a global consumer,’ says Lytle. ‘China represents a huge opportunity for most multinational corporations. We just can’t ignore it.’

As China opened its markets, Smiths moved in to explore where China stood from a business and consumer standpoint. ‘Historically, we’ve had a few small operations there,’ says Lytle. ‘Mostly they were joint ventures, low-cost manufacturing centres, but we are now opening our Asia-Pacific corporate headquarters in Shanghai. The purpose of that office is to grow our presence there as a producer, as a consumer, as a supplier.’

But doing business in China is not always plain sailing. The Chinese have a concept called guanxi (pronounced gwon-shee), which roughly translates as ‘relationships.’ To get things done in China, personal connections matter a great deal, but developing them takes time. In China, they cannot be hurried.

‘From a networking standpoint, you have to work with someone who has done it before,’ says Lytle. ‘You cannot assume that you can walk in there and get things done as quickly as you can in other markets. You need to work with people who know how to get things done in China.’ These people are often referred to as old China hands.

Patience is a key virtue if you want to succeed. Not only because of guanxi, but also because the country is still suffering growing pains. ‘There are some place we can’t go, not because the Chinese government won’t let us, but because the infrastructure cannot support the levels of rapid expansion,’ says Lytle. ‘So we have to move somewhat slowly as the government builds their infrastructure.’

Another challenge Lytle faced was IT security – one of China’s key weaknesses. ‘We do a lot of defence aerospace work with a number of different governments, so we have concerns around security of intellectual property,’ says Lytle. ‘Security concerns are being pressed on us by our other government customers, so we have to isolate our Chinese business from the rest of the organisation.

‘We have to set up a firewall between China and the rest of our organisation, just to assure other governments that Chinese nationals will not have open play into our virtual private network. So far, it’s been successful, but we are constantly monitoring traffic to know what is going on and to ensure the firewall is not being breached.’

Lytle’s recipe for working successfully in China is to move very slowly and do a lot of due diligence. ‘It does not hurt to get your feet on the ground and look around,’ says Lytle. ‘You cannot assume that from a couple of conversations or a few written articles, you can understand what goes on there.’

Reports Find the Pace Of China's Overhauls Lure Foreign Investors

2006-09-23T11:27:00.000-07:00

Conducting business in China is easier than it was a year ago and the country is likely to lead emerging markets for foreign-direct-investment inflows through 2010, according to two reports issued yesterday.

The reports' findings indicate China remains an attractive place for domestic and foreign investment, despite risks economic imbalances pose to the country's rosy outlook.

China has picked up the pace of its overhauls and moved up 15 spots to 93rd place out of 175 countries in terms of the ease of doing business, according to one report co-sponsored by the World Bank and its International Finance ...

Don't fear China, exec says

2006-09-16T10:23:00.000-07:00

By Mike Ivey

Wisconsin business executives got an inside glimpse of China Friday and the bottom line was this: It's better to compete in the marketplace than on the battlefield.

Greg Hallberg has spent the past 15 years working in the Asia-Pacific region both in plant operations and more recently as an inter-cultural business relations consultant. From that perspective, he understands the fear many Americans have with the growing influence of the world's most populous nation.

Those concerns run the gamut - from intellectual property issues and copy-cat products to the lingering specter of a communist government with nuclear weapons.

But all of that is trumped, Hallberg said, by a country of 1.3 billion hard-working people with a burgeoning high-tech sector that is quickly moving beyond shoes, toys and textiles.

"There is lots of nervousness, lots of angst but the growth potential so overshadows everything else," Hallberg told attendees at the Fall 2006 Economic Outlook at the Fluno Center sponsored by the UW-Madison School of Business.

An industrial engineer by training, Hallberg now maintains homes in both Minneapolis and Shanghai, and advises others on doing business overseas. For those interested in understanding the Far East, he suggests starting with a bit of history.

"All of Asia has been divided and conquered, taken over and abused, colonized and manipulated," he said.

China, in particular, has endured tremendous hardship over the past two centuries. Even today, some 800 million to 900 million Chinese live in poverty in rural areas.

But that is changing at a pace never seen before, Hallberg said. While Japan took 40 years to build itself into a world economic power following World War II, China is bent on doing it in just 10 years.

And China enjoys many advantages, not just in its vast labor market and natural resources. It has a personal savings rate approaching 30 percent, which frees up capital for investment and relieves consumers from crushing debt loads. Its companies take a longer view and don't feel pressured by Wall Street to make quarterly earnings projections.

Moreover, Hallberg said the Chinese culture and the "Confucian Way" puts an emphasis on ethics and cooperation versus immediate gain.

"You don't have the 'me too' mindset," he noted.

Not that there aren't problems. With rapid growth has come environmental degradation. Hallberg said 70 to 80 percent of Chinese waters are so polluted they no longer support marine life.

"The air in Beijing some days is so thick you can chew it,' he said.

Hallberg also said the Chinese banking system is crumbling while the nation limits foreign investment. Its service sector remains hugely inefficient or even non-existent, with Hallberg recounting the struggles of getting a flat tire changed on a drive to the Shanghai airport.

"There is no motor club there, not even a Jiffy Lube," he said.

Still, there is no doubt in Hallberg's mind that the 21st century will belong to China. In some ways, he said it resembles the U.S. 50 to 100 years ago when this country reduced agricultural employment.

Hallberg also downplayed the growing U.S. trade deficit with China, noting that more than half of the products being exported by China are from foreign nationals who have set up shop there. That includes many major U.S. companies including General Motors, General Electric, Boeing and Microsoft.

"The best GM products are the Buicks built in China," he said.

Slow growth ahead?: Attendees also got a rather bleak economic forecast from Marc Miles, senior fellow at the Heritage Foundation. Miles predicted the U.S. economy will increase by only 1 percent in 2007, an estimate based on the history of interest rate moves by the Federal Reserve and the recent move to start loosening credit.

Miles provided numbers showing the economy actually slows when the Fed cuts interest rates - the exact opposite of what is intended - because companies start doing less business because they are waiting for borrowing costs to fall further. Conversely, when rates are rising, companies rush to do more business before the borrowing costs rise too high.

"If the Fed wants to even things out, it should minimize the changes," he said.

Miles said 2007 could be an "interesting year" adding that the impact of the war in Iraq and global terrorism will continue to be a drag on the economy.

"I just look at all the executives standing in line at the airport," he said. "That is a lot of time when no business is getting done."

E-mail: mivey@madison.com

Lest We Forget.....

2006-09-08T21:07:00.000-07:00

Monday, September 11, 2006, is the 5th anniversary of the attack on the World Trade Center Twin Towers in New York City. In addition, there were attacks on the Pentagon and subsequently - all over the world - including Madrid, Bali and Mumbai, to mention just a few. Here is a poem, written anonymously, to help us remember not only September 11, 2001 but all the other terrorist attacks on democracy.

Two thousand one, nine eleven
Five thousand plus arrive in heaven.
As they pass through the gate,
Thousands more appear in wait.
A bearded man with stovepipe hat
Steps forward saying, "Lets sit, lets chat."

They settle down in seats of clouds,
A man named Martin shouts out proud,
"I have a dream!" and once he did
The Newcomer said, "Your dream still lives."

Groups of soldiers in blue and gray
Others in khaki, and green then say
"We're from Bull Run, Yorktown, the Maine"
The Newcomer said, "You died not in vain."

From a man on sticks one could hear
"The only thing we have to fear.
The Newcomer said, "We know the rest,
trust us sir, we've passed that test."

"Courage doesn't hide in caves
You can't bury freedom, in a grave,"
The Newcomers had heard this voice before
A distinct Yankees twang from Hyannisport shores.

A silence fell within the mist
Somehow the Newcomer knew that this
Meant time had come for her to say
What was in the hearts of the five thousand plus that day.

"Back on Earth, we wrote reports,
Watched our children play in sports
Worked our gardens, sang our songs
Went to church and clipped coupons
We smiled, we laughed, we cried, we fought
Unlike you, great we're not"

The tall man in the stovepipe hat
Stood and said, "Don't talk like that!
Look at your country, look and see
You died for freedom, just like me"
Then, before them all appeared a scene
Of rubbled streets and twisted beams
Death, destruction, smoke and dust
And people working just 'cause they must

Hauling ash, lifting stones,
Knee deep in hell, but not alone
"Look! Blackman, Whiteman, Brownman, Yellowman
Side by side helping their fellow man!"
So said Martin, as he watched the scene
"Even from nightmares, can be born a dream."

Down below three firemen raised
The colors high into ashen haze
The soldiers above had seen it before
On Iwo Jima back in '44

The man on sticks studied everything closely
Then shared his perceptions on what he saw mostly
"I see pain, I see 20 tears,
I see sorrow - but I don't see fear."

"You left behind husbands and wives
Daughters and sons and so many lives
are suffering now because of this wrong
But look very closely. You're not really gone.

All of those people, even those who've never met you
All of their lives, they'll never forget you
Don't you see what has happened?
Don't you see what you've done?
You've brought them together as one."

With that the man in the stovepipe hat said
"Take my hand," and from there he led
five thousand plus heroes, Newcomers to heaven
On this day, two thousand one, nine eleven.

Beyondsoft's Senior Vice President on 'Doing Business in China'

2006-09-03T13:09:00.000-07:00

CBTA's President, Mike Lian, and Beyondsoft's Senior VP, Philip Lew, advised CBTA members on the topic of "Doing Business in China" in downtown Bellevue on August 17.
Senior VP Philip Lew introduced Beyondsoft's business profile in addition to an overview of the software outsourcing situation in China.

Mr. Lew commented on the opportunities and issues in China regarding leadership, management, and entrepreneurship. Finally, Beyondsoft's Senior VP gave insight into the hot topic of today's business world -- the challenges and conflicts of culture when doing business in China, and how Chinese IT outsourcing firms such as Beyondsoft are overcoming these challenges.

The 2-hour meeting with more than 20 members of CBTA shed light on the fact that the members, who were of Chinese origin are more willing to do business with the Chinese. However, one hindrance is that these people lack the type of information essential to decision-making when doing business in China.

As last, Philip Lew and Mike Lian, the President of CBTA, agreed to further their mutual relationship and co-development in satisfying the software outsourcing requirements of Chinese people and their firms in Greater Seattle.

About Beyondsoft

Established in 1995, Beyondsoft Co., Ltd. is a leading China based provider of end-to-end software engineering services, spanning software development, software testing, localization, BPO, and China market entry.

Headquartered in Beijing, Beyondsoft has domestic branches in Shanghai, Tianjin & Wuhan, as well as overseas offices in Silicon Valley, Seattle, Fort Collins in the United States, and Tokyo, Japan. Beyondsoft is recognized as one of the top 3 US & Europe oriented outsourcing companies in China by IDC (Feb. '06). For more information, please visit http://www.beyondsoft.com .

About CBTA
CBTA (Chinese Business and Technology Association) is a non-profit organization in Washington. Its mission is to promote and support overseas Chinese businesses and technological development in the United States and China, through improvement in information exchange, promotion of business and technological cooperation, and establishing a coherent platform to integrate personnel, market and capital resources.

For more information, please contact:

Lorita Liu
Beyondsoft Group
Tel: +86-10-8282-6100 x5102
Email: liuye@beyondsoft.com
Web: http://www.beyondsoft.com

China's train station advertising opens to foreign company

2006-08-26T15:35:00.000-07:00

Business Media China (BMC), a wholly-owned German company, has become the first foreign company to get involved in the outdoor advertising business in China's railway stations.

Under an agreement signed between BMC and China Railway Century Media (CRCM), a subsidiary of the Beijing Railway Bureau, BMC will have exclusive operation rights for outdoor advertising at Beijing West Railway Station, Beijing Central Railway Station, Tianjin Railway Station and Shijiazhuang Station for six years.

"The move breaks the long-standing monopoly of railway projects by state-owned enterprises," said Director Zhang Jie of CRCM advertising department. He refused to disclose the cost for the transfer of exclusive rights, saying it was a business secret.

Zhang admitted that BMC was introduced to spur sluggish advertising business at the four stations. Over the past two years, annual aggregate advertising income was 50 million yuan at most. BMC's projection, however, is 150 to 200 million yuan.

BMC Project manager Liu Yining said that the projections were based on a massive renovation plan ahead of the 2008 Beijing Olympics.

Under the plan, more than 80 percent of existing 20,000 square meters of advertising space - billboards, electric signs, flat screen TVs - will receive a face-lift. Up-to-date facilities such as neon arc lights and laser shows will be installed to create stronger visual impact.

Upon completion, the four train stations are expected to present a new look and a more people-oriented design to facilitate passengers, Liu noted.

Sources close to the deal said that what appealed to BMC was that Beijing's train stations, which are key gateways to the 2008 Olympics venue, had not been affected by last May's outdoor advertising overhaul.

Dozens of outdoor advertising facilities were dismantled last year for fear of defacing the city landscape, turning Beijing's railway stations into "prime resources" for more and more advertisers.

Currently, the four stations receive about 90 million passengers annually. Traffic flows are expected to surge during the Olympics, according to a study by the Public Opinion Institute of the People's University of China,

"The advertising revenue of these four railway stations could hit 150 to 200 million yuan, but such figures are impossible without revamping", Liu said.

He said that BMC was highly interested in the China market. When it went public at the Frankfort stock exchange in Stuttgart, Germany years ago, the German corporation had included "China" in its name to stress the "China Concept".

Apart from BMC, a number of other foreign media companies are also keen on China's public transport advertising opportunities. The U.S. media giant Viacom, for instance, has taken over advertising on all buses run by the Beijing Bus Company.

Lawyer has insider's advantage on China's laws

2006-08-21T22:03:00.000-07:00

Amy Xu still laughs when she recalls a particular case in which a Chinese maker of floppy disks used a logo that was a bit similar to that of Maplewood-based 3M Co., a client of her law firm. The Chinese company called its brand "3W," Xu said, noting that a W is just an M upside-down.

Such blatant rip-offs have frustrated U.S. companies trying to tap into the vast potential of China's red-hot economy. As a top intellectual-property lawyer for Minneapolis-based Dorsey & Whitney, one of the city's largest law firms, Xu helps Minnesota companies doing business in China protect themselves from trademark infringement, patent violations and piracy -- issues that have bedeviled the relationship between the world's largest economy and the world's fastest-growing one.

Copyright violations cost U.S. companies $2.3 billion in sales last year, according to the bipartisan Congressional International Anti-Piracy Caucus.

"China is so massive, a lot of people who are pirating CDs have no idea about intellectual property," Xu said. "They don't understand, because the system is so new. The government is trying to educate the people. You can constantly see in the Chinese media about IP [intellectual property] education. These kind of situations don't change overnight."

Aside from her William Mitchell law degree and a career that spans Dorsey & Whitney and Merchant & Gould law firms, Xu, 37, also boasts another impressive credential: Her dad, Yiping Xu, helped write China's first intellectual property laws.

"She understands the idiosyncrasies of China," said Bryan Root, president of Celadon Systems Inc., a Burnsville-based maker of semiconductor equipment that does extensive business in China and has worked with Xu since 2001. "That's a huge benefit for us."

Born in Shanghai, Xu had no intention of following in her father's footsteps, or even of leaving the country for that matter. While Chinese parents generally encouraged their children to spend time overseas, Xu said she was perfectly content to stay home near her family and friends.

Her dad, however, was a different matter. In 1979, the Chinese government sent him to the United States and other Western countries to learn about intellectual property laws.

Yiping Xu's work resulted in China's first patent laws, in 1984.

At the time, Communist China was just beginning to open its economy to foreign investment.

"Chinese people don't [officially] have property, so what is intellectual property?" Amy Xu said. "Back then, China tried to push foreign investment in China. In order to attract lots of biz into China, they had to develop a system that would track with the world."

Encouraged by her mother, Xu did eventually come to America and graduated with a degree in electrical engineering from the University of Minnesota. But her plans to get a doctorate in that field fizzled when a fellowship fell through. To make some money, Xu got a job working at Merchant & Gould, a Minneapolis firm that specializes in patent law.

Torn between law and electrical engineering, Xu decided to study both, which she now admits was "a little too much."

Xu says the biggest obstacle to U.S. companies doing business in China is not piracy, but ignorance. For instance, some companies don't even bother to register their intellectual properties.

"The one single question I will ask [companies] is, 'Do you even have the rights over there?' " she said. "Have you registered the trademark or copyright? If you don't have anything, how do you go after anybody? Those are the exclusive rights to prevent people from copying you. Otherwise, it's a free-for-all."

And contrary to popular belief, China does have a sophisticated legal system in place to protect intellectual property, Xu said.

For instance, the government has established special district court panels to hear cases involving foreign companies.

China also recently created a special court to enforce piracy laws.

Still, China has a long way to go, Root of Celadon Systems said. "It still is the Wild Wild West if you are not careful," he said.

Does Xu ever ask her father for help? "If it is a China-related issue and I need one more resource, I can just make a phone call and he will tell me about it," Xu said. "But [it's] not the type of advice to make a decision."He would love to give me that sort of advice," she said, laughing. "But he knows that I am too independent."

Helping Chinese Consumers Online: Ker Gibbs, CEO of MyETone.com

2006-08-13T10:50:00.000-07:00

Trust is an important component in conducting online commerce in China, and a new online company hopes to put trust into a new light. MyETone.com is an online Chinese community providing consumer product reviews and discussion. The website helps consumers leearn from other netizens about good and bad products.

Originally from the United States, Ker Gibbs is the CEO at MyETone.com. He first came to mainland China in 1985 and has also spent time in Japan and Korea, Hong Kong and Taiwan. Before joining the company, he worked for Apple Computer, Infoseek, NBC Internet, and most recently Secure Computing Corporation.

Q. How did you become involved with MyETone and what is the value of the company's services to its users?

A.When I first came to China in 1985, there was literally nothing in the stores to buy. The big joke among foreigners was that all the stores must be selling mayonnaise because when you asked a clerk for something they all said "mei you." On special days we would ride our bikes down to the Friendship Store for consumer products. It was pretty grim.

Today the situation is completely reversed. There are thousands and thousands of products, some of them very good. But there is a lot of junk out there too, and fake products and products that don't do what they claim to do.

This creates the need for a place where people can get unbiased information and recommendations. The Internet is perfect for that. Before committing to purchase a product people can do a quick check to see which brand other people bought, and why. They can check prices and follow a discussion of certain brands and products. MyETone exactly fills this need.

Personally, I got involved with MyEtone just recently, through the investors. The main investor is a VC from the Valley whom I've known for many years. He and I talked when I was back in California and I got excited about the idea. It's a good space to be in--consumer products/user-generated content/community--and we can do a lot with it. The team is really solid.

Q.How does MyETone make money?

A. We're an early stage start-up, so still technically pre-revenue, although we have already put some revenue producing programs in place. Part of our revenue model will be basically the same as it is for these types of sites in other markets -- online ads, click-to-action, and taking a percentage of transactions that originate on our site.

However, we have plans to develop other revenue streams that do not depend on the actual transaction to take place online. We have the ability to play and important role in the shopping experience because we touch the customer at the time when they are actively making a decision about what product to buy and which brand to choose. We can earn revenues on that transaction even if it takes place offline.

Q. Why is there a need for Chinese consumers to evaluate products online?

A. The Internet is simply a better medium than any other to get information about products. This is true in China just as it is anywhere else. The difference here is that while there is already a lot of online SHOPPING, there isn't as much online BUYING here in China, and there are a number of reasons for this.

Of the many reasons people give for not buying products online, over 70% of the people state some type of "lack of trust" as the main reason. It may be trust in transaction security or product quality, but the issue is fundamentally lack of trust.

It's true that the extent to which this issue can be addressed, this will help increase the e-commerce BUYING. Still, an enormous number of people today do a lot of online SHOPPING, in the sense that they are looking for and evaluating products online.

In fact, the low trust environment is one of the big reasons why the China market needs a site like MyETone. In a low trust environment, people look to people within their own personal network for information. They ask their relatives, friends and neighbors for advice about what to buy, which vendors to trust. MyETone is the online version of exactly this type of community. Using the MyETone community people can see other people's opinions, and they can see what other people in the community said about those opinions. Isn't this exactly the same type of behavior you see among friends and neighbors? Certain people get a reputation for giving good advice about certain topics. Therefore everyone seeks them out when they need to make a decision on that topic.

Q. Are you currently looking for more financing?

A. We raised Series A from individual investors--many of them are quite active in the China market, so not typical "angels" that you never see. Some of them have been tremendously helpful to us. At this point we are raising Series B, but it looks as if that is mostly taken. We believe we can get to revenue and profit with just Series B, but it's impossible to say for sure!

Q. How many staff do you currently have and what sort of people do you look to hire?

A. Currently we have 28 people, all local Chinese people, other than me. We look mainly for people we have a good chemistry with. Almost anyone with some creativity and an open mind can figure out how to work on the Internet, but we put in long hours so we want to pick people we enjoy spending time with.

We also make a point to go out and have fun as a group once in a while. Last time we went out for go-kart racing at the Formula One track here in Shanghai. We are thinking about doing the indoor skiing next time, since now it's summer and hot as hell.

Q. How do you filter comments on your site and what sort of safeguards do you have for user-generated content?

A. Your question gets right to the formula for our special sauce! We don't filter or even rank the content--our users do. You are absolutely right to point out that the whole problem with user-generated content is how to filter and sort it for quality.

First, the content does go through a filter for obvious things like obscenity, irrelevant content, that sort of thing. But once we've determined that it's a legitimate consumer product review (or blog entry) then it goes up on the site. The first person who reads it gets to evaluate it. If they rank it low in terms of helpfulness, then the content gets immediately dropped down lower for the next person.

Users can set their own filters so that they ONLY see content that has been rated by other users. Naturally, members who have written content that has been ranked high get more power--their vote counts more when they rate other content, and so on. We call this our Inter-trust system, and it was built using what we learned from the ePinions experience.

Q. What type of additional services does MyETone plan to unveil over the next 3-6 months?

A. Our users have been asking for wireless functionality, so this is a high priority for our development team now. Again, we see a lot of people shopping online, but the buying experience is still mainly in the shops where people are not in front of their computers. They do have the mobile phones, however. Therefore we are development functionality to allow our users to send an SMS and get price information in real time. This will help them decide whether to make the purchase or keep shopping, or perhaps negotiate a better price.

Lately we've put up new functions, like the "PK" section that supports active debate on any subject, as long as it relates to consumer products. We are also doing more in terms to direct question/answer functionality.

Q. How do you differentiate yourself from your competitors?

A. The competition falls into two categories. There are "verticals" that tend to focus just on one or two categories, then there are the pure price comparison sites.

The verticals tend to use professional editors. There is nothing wrong with that, and we believe there will always be a role for those sites. But that's different from going out to the community and asking other consumers what they think about the products they bought. It's an entirely different type of content. The smart shopper is going to look at both types of content, as well as the content from the product manufacturer.

Second, there are the price comparison sites. We have this function on our site, but it's not all that we do. We are fundamentally a content site, and a community where consumers can exchange information and advice. The pure price comparison sites are useful too, but they are approaching things from a different perspective.

Q. What sort of challenges do you face in running an online business in China?

A. Like any business in China, but especially a creative business like ours, it all comes back to the people. We put a lot of effort into finding the right people and we try to create a working environment where they can have fun and be creative. At the same time, we need to achieve certain goals as a company, so there is a lot of pressure as well.

For me as a foreigner here, especially coming from the Silicon Valley work environment, I need to strike a balance between the typical California hands-off style, which allows managers the freedom to experiment and make their own mistakes, versus providing the management that Chinese staff expect. They tend to look for more specific instructions and rules.

Q. What type of advice can you provide to someone looking to invest in China's tech sector?

A. One of the big discussions is about the ecommerce numbers, and when consumer buying is going to take place online in big numbers. We think it will, but we are not counting on it by depending entirely on ecommerce transactions for our revenue model, the way this type of business does in the US.

MyETone can play an important role in the shopping experience and generate revenues without actually selling products on our site. The Internet is playing an important role in the shopping experience here in China, there is no doubt about that. It would be a mistake to not invest just because actual B2C ecommerce transaction numbers are currently low.

'Doing Business in China' seminar planned

2006-08-04T06:35:00.000-07:00

Businesses seeking to expand overseas can learn more about entering the Chinese market as a number of experts convene for a seminar in Evansville next month.

The Tri-State World Trade Council, the Indiana District Export Council, the U.S. Department of Commerce and the Institute for Global Enterprise at the University of Evansville will host “Doing Business in China,” from 8 a.m. to 1:30 p.m. Aug. 17 at the University of Evansville.

The seminar will explore topics such as protecting intellectual property rights in the U.S. and abroad, navigating China’s legal environment, learning about Department of Commerce resources and a discussion on China’s evolving marketplace.

Presentations include:

• Lisa Rigoli, international trade specialist with the Department of Commerce’s Office of the Chinese Economic Area, will provide an overview of how American firms can protect their intellectual property around the world.

• Angela Castille, partner with Baker and Daniels, will discuss strategies for navigating China’s legal environment.

• Representatives from regional companies conducting business in China will take part in a roundtable discussion about their experiences in the Chinese market.

• Oded Shenkar, professor of international business at Ohio State University, will present the keynote address, “China’s Evolving Marketplace and Its Strategic Implications.” Shenkar is the author of several books analyzing trade in China and east Asia.

Registration for the event is $75 and includes a copy of Shenkar’s book, “The Chinese Century.” Registration is accepted on the Internet at www.indianadec.com. For more information, contact Mark Cooper at (317) 582-2300.

Greater China VoIP Product Exports Projected to Top 22 Million Units in 2006

2006-07-30T19:54:00.000-07:00

Greater China manufacturers are expected to produce 29 million VoIP products in 2006.
Exports are estimated to hit 22.66 million units -- an increase of 14 percent over 2005 estimates, according to Global Sources.

Report publisher, Mark Saunderson, said: "Telephony solutions are expected to drive growth in the worldwide VoIP market. Telephony product exports for 2006 are forecast to increase 52 percent year-on-year, revolving around the integration of wireless technologies, led by Bluetooth and WLAN.

"The convergence of voice and video applications is also expected to gain ground this year. Several companies in Taiwan already are including VoIP videophones in their product line-ups," he said. The report indicates that buyers sourcing VoIP products from Taiwan, Hong Kong and mainland China can expect a growing yet very dynamic supply market in the coming year. Findings are based on in-depth manufacturer
interviews, factory visits and surveys.

Mainland China, Hong Kong and Taiwan Manufacturers Face Challenges China Sourcing Report:

VoIP Products notes that while Greater China's production and exports are growing, competition from makers in North America and Europe could reduce its worldwide market share. Taiwan's Market Intelligence Center forecasts that Greater China's share of the global market in 2006 could drop from 82 percent to 61 percent.

The report also shows:

-- Worldwide subscriptions for residential VoIP are expected to hit 197.2 million users by 2010, up from 4.8 million in 2004

-- Taiwan leads product development and production in Greater China with VoIP gateways, phones, terminal adaptors and routers

-- USB phones, USB gateways and high-end IP PBXs dominate VoIP production in mainland China

Hong Kong makers are positioning themselves in the middle ground between the high-volume capability of mainland China companies and the technological strength of the Taiwan makers.

China Sourcing Report: VoIP Products examines trends in manufacturing, design and pricing in the rapidly expanding VoIP industry. It provides in-depth profiles of 30 leading manufacturers in mainland China, Taiwan and Hong Kong, plus prices and specifications for 123 top-selling export products.

Industry Giants Welcome European Traders To Business China Expo

2006-07-22T08:41:00.000-07:00

At the Business China Expo (http://www.businesschinaexpo.com) – which takes place September 28-29 2006 in Cannes, France - any size of company burning to get the competitive edge in China can experience a tailor-made opportunity to strike deals and hobnob with over 200 Chinese government and industry leaders.

China Business Expo - the biggest event of its kind in Europe - offers the chance for head-to-head talks with representatives of the top ten regions for foreign investment, alongside over a dozen other significant trade regions including Shanghai, Guangdong and Beijing, specialising in industries from furniture manufacture to engineering and IT.

Industry captain Dr Zhang Suixin, executive vice president of Volkswagen Group China, says of the event: “Business China Expo will provide unparalleled opportunities to companies who are keen to start doing business with China. Attempting to travel to China and track down the wealth of business contacts that the Expo will have under one roof is just out of the question for most small businesses.”

Regional governmental officers with direct responsibility for foreign business, development zones and commercial enterprises will offer expertise indispensable for understanding regional industry speciality and the different incentives – which range from tax breaks to specific projects - available in each province. The representatives will even assist in hooking up a company with a local partner or setting up a factory.

Bespoke itineraries are available to ensure that companies are matched with relevant contacts in their industrial sector. Businesses can also be confident that the contacts they make are reputable and low risk.

Business China will be held September 28-29 2006 at the Palais des Festivals in Cannes, France. Registration can be completed at http://www.businesschinaexpo.com/registration.html

Hotel and travel arrangements can also be booked online.

- Ends -

Business China takes place September 28-29 2006 at the Palais des Festivals, Cannes, 06403, Cedex, France, and is presented in association with the Chinese Government through the Chinese Council for the Promotion of International Trade (CCPIT) and the China Chamber of International Commerce (CCOIC).

Industries represented at Business China include: aerospace, agriculture, automotive, chemical, construction, electrical and electronic manufacturers, energy / oil / gas producers, engineering, glass, information technology, retail, manufacturing technologies, medical technology, biotechnology, pharmaceutical, mining, plastics, pulp and paper, rubber, steel and metal processing, telecoms, textiles, woodworking and furniture.

Business China works with European industry associations, commercial associations and government chambers of commerce including the Austrian Federal Economic Chamber, Belgium Chinese Economic Commercial Council, China-Britain Business Council, Ireland China Association, OAV & DCW (Germany), Portuguese Chinese Chamber of Commerce, Spanish China Business Cooperation Committee, Sweden China Trade Council and China Council of the Netherlands Council for Trade Promotion.

For further information, please contact:
Scott Gray, Director, Business China Expo
Tel: +44 (0)20 7917 9524
Email: scott@businesschinaexpo.com
Site: www.businesschinaexpo.com

Doing business with China: Winning hearts and minds

2006-07-16T08:13:00.000-07:00

To succeed in the world’s fastest-growing market, international companies must develop very special relationships with their stakeholders.

The importance of China as a “must win” market for multinational companies can be seen in the amount of money pouring into the country. By 2007, annual foreign direct investment is expected to hit $65 billion.

But China can pose problems for ambitious outsiders. The Chinese economy is one of the most competitive in the world. Chinese employees and consumers are notoriously demanding, while local companies are quick to adapt to imported technologies.

Foreign companies also face an unstable operating environment. China does not have a strong tradition of the rule of law; regulations are vague and frequently rewritten; and law enforcement is sometimes weak – especially in the case of intellectual property rights.

It is these challenges that a new book – “China CEO: Voices of experience from 20 international business leaders” – seeks to address.

Based on interviews with 20 senior executives running multinational operations in China, it advises companies on what to expect and how to adapt to a very different market.

The key lesson from the book is that to succeed in China, firms must understand “guanxi” – what it calls “Chinese-style networking”, or relationships based on favour-swapping.

For example, you meet a fellow executive on an MBA course who helps you find some information for an assignment. It would not be unusual to receive a call months later from your acquaintance, requesting that you provide his son with an internship.

Networking is integral to business. But in China this sort of mutual assistance is deeply ingrained in the culture. To succeed, international businesses must develop very close relationships with all of their stakeholders.

Employees, for example, have high career expectations. Managing these expectations means developing “good guanxi” between employers and employees. Chinese workers, the book says, tend to work hard for a particular supervisor. Managers must also be mentors, the company a second family.

Guanxi is especially important when dealing with government. According to one Chinese saying, “no one man can approve a project, but any one man can veto it”.

Building up guanxi – or a stockpile of favours that can be cashed in with the authorities later – is essential for companies operating in China. The managers questioned for the book insist that building relationships with government need not entail corruption.

Companies are advised to involve top executives – for reasons of “face”; hire Chinese nationals to help in negotiations; and to adopt a co-operative rather than confrontational approach when dealing with government.

Combating copying

An area where multinationals need to work closer with government is in safeguarding intellectual property. China is notorious for counterfeiting, while the government is poor at prosecuting offenders, especially when foreign companies are the victims.

Ultimately, counterfeiting will not stop until more domestic companies are affected. Meanwhile, international firms can work to convey the importance of intellectual property to employees, be selective on giving partners access to core technologies, and in some cases, leave the manufacturing of critical technology at home.

These problems cannot detract from the desirability of China as a target for foreign investment. As outsider-executives develop a “multicultural mindset”, possibilities for profit in the region will not diminish.

“China CEO: Voices of experience from 20 international business leaders” by Juan Antonio Fernandez and Laurie Underwood is published by John Wiley & Sons.

More information at www.eu.wiley.com

Business center in China designed to help market state's products, services

2006-07-10T20:55:00.000-07:00

The state Cabinet for Economic Development this month opened the Kentucky China Trade Center in a modern skyscraper near the U.S. Embassy complex. The office has a Chinese-speaking staff of four that can assist Kentucky companies in marketing their products and services in China, as well as promoting Chinese investment in Kentucky.

Plans call for the center's staff to provide market intelligence, regulatory updates and advice on travel, language and cultural issues, as well as help Kentucky companies find sales opportunities, distributors and agents. Kentucky businesspeople may use the facilities, which include wireless Internet, as a temporary office while in China.

Planning for the office began more than a year ago. Gov. Ernie Fletcher led a trade mission to China in May 2005, and cabinet officials sought advice from executives of more than two dozen of the 180 Kentucky companies already doing business in China.

"I think we're really going to be able to support Kentucky companies well," John Larkin, a former commercial officer at the U.S. Embassy, told a delegation of Kentucky leaders at a July 1 briefing.

After reviewing 25 proposals, the cabinet chose Larkin's Virginia-based company, Larkin International Trade Associates, to set up and initially staff the office.

Kentucky companies last year exported more than $400 million worth of goods to China, up from less than $40 million in 1997. Those exports included chemicals, machinery, electronic equipment and metal products and scrap.

Larkin said he thinks future opportunities include project management services and equipment sales to China's huge coal-mining industry.

This is Kentucky's fifth foreign trade office; the others are in Tokyo; Brussels, Belgium; Guadalajara, Mexico; and Santiago, Chile.

Kentucky China Trade Center

For more information on the Beijing office, e-mail the cabinet's International Trade Division at chinatrade@ky.gov or call (502) 564-7140.

Some purchasing in China gets outsourced

2006-06-28T21:49:00.000-07:00

There are many low-cost sourcing opportunities in China, but there are also many risks as well. Risks include poor quality, substandard manufacturing processes, counterfeit components and potential loss of intellectual property, among others.

Despite those risks, many mid-sized OEMs would like to take advantage of the opportunities in China, but don’t know how to get started. Some are turning to licensed procurement services companies for help. Such companies are often staffed by China natives who have a deep knowledge of the capabilities of both global suppliers doing business in China as well as indigenous suppliers.

One of the better known procurement services companies is China Procurement Company (CPC), a wholly-owned subsidiary of IBM based in Shenzhen.

CPC has been doing business since 1996 sourcing for IBM brands. In 2004, it began offering its procurement services to outside companies as well. Its customer base includes computer, medical, industrial and consumer electronics equipment OEMs.

CPC buys about $3 billion of goods and services per year for IBM and outside customers, says Joseph Gianatassio, CPC general manager and purchasing manager for Asia Pacific for IBM. CPC buys bare printed circuit boards, printed circuit board assemblies, motors, sheet metal, plastics among materials.

“We get the most inquiries on electronics manufacturing services suppliers. In some cases, an OEM wants a board built and in other cases a complete system,” Gianatassio says. CPC buyers find the right match for the customer, he says.

“China is not an easy country to do business in,” he says. “A lot of companies started doing business here and got disillusioned and left.” He says government regulations for licensing, permits, exporting and logistics can be daunting.

In addition, there is a wide variation in the capabilities of suppliers in China. The suppliers that CPC uses have been evaluated and qualified.

“Within my organization is a combination of commercial skills and engineering skills,” says Gianatassio. “There are procurement engineers and quality engineers so we help qualify the product.”

In addition, CPC also checks suppliers from a social responsibility perspective. “We make sure they don’t use child labor, and that they obey overtime and environmental laws,” he says.

CPC monitors the performance of the supplier.

Companies will use CPC initially to source a portion of their bill of materials or to find a manufacturer for a product or two in their portfolio, not to entirely outsource procurement.

Made in China: Toys, Clothes and Now Cars?

2006-06-15T15:41:00.000-07:00

Are Chinese automobiles set to be the next import to flood America? According to Malcolm Bricklin, one of the key businessmen leading the Chinese auto import race, the anticipated arrival will be delayed until 2008.

"I'll take it back a little,'' Bricklin told Bloomberg News of his earlier goals.

In 2005, Bricklin and his New York-based Visionary Vehicles LLC forged a partnership with China's state-owned Chery Automobile Company Ltd. Though Chery is not one of the top-five Chinese car manufacturers in size, the ambitious company is China's first auto exporter, selling cars to neighboring countries in Southeast Asia.

Bricklin, an eccentric industry veteran, had caused a stir last year when he forecasted that Visionary Vehicles would be importing 250,000 Chery sedans, SUVs and coupes to be sold at 250 new dealerships by 2007.

To date however, only 75 franchise dealerships have signed on, leaving the distribution network immature. The prototypes are also yet to be in production.

Visionary and Chery's setback is no surprise to industry analysts who expressed doubt that the company could more than triple its production capacity up to 250,000 units from 80,000 units in 2004.

Last week, Bricklin re-adjusted the initial forecasts and clarified his intended target market.

"We want the guy who's driving a Honda or Toyota, but would really rather have a Mercedes but can't afford one," Bricklin told Knight Ridder News. "We're not looking at selling the cheapest car in the market. We're looking at selling the cheapest in the top-end segment."

In Bricklin, Chery teamed with a bold American car industry veteran with a history of successfully launching new automobile brands and dealer franchises. The gold star on Bricklyn's résumé is establishing Subaru of America in the late 1960s.

In some circles, however, Bricklin is regarded as a fast talker with big ideas but faulty execution. He's infamous for the bankruptcy of his futuristic SV-1 sports car, the flat sales of Fiat imports and the flop of the cheap but unreliable Yugo.

Despite Bricklin's track record, it can't be denied that his business model has the ability to succeed in the American market, and follows the trend of Asian companies from Japan in the 70s and South Korea in the late 90s. The business model leverages the low cost, hard working Asian labor force, efficiencies in shipping and the U.S.'s pro-competition business climate and enormous market potential for low- and mid-priced cars.

"I'm real skeptical about Bricklin. But the reality is we'll soon be seeing Chinese-made vehicles coming over here. Bricklin's could be the first to reach the U.S. market,'' said auto analyst Jim Gillette of market researcher CSM Worldwide of Northville, Mich.

Adding an extra dose of theatrics to Malcolm Bricklin's Chinese import adventures, his son Jonathon has been following him around filming his business dealings and unorthodox conduct—from the day-to-day operations in Visionary's trendy Tribeca, New York office, to franchise dealership sales calls and trips to China.

The film will showcase the unpredictable personality of the 67-year-old businessman. The film appears to emulate other business reality programs, such as the documentary "Startup.com" filmed in the heyday of the Internet boom and Donald Trump's current successful television show, "The Apprentice."

The Plight of Chinese Auto Workers

Though the adventures of Malcolm Bricklin have been the most pulp news coming out of the Chinese auto industry, there are other industry trends consumers should know.

Ford, Volkswagen and BMW all have plants in China. In some respect, they have little choice in outsourcing there if they want to remain competitive. Because the Communist regime prevents its currency from appreciating, Chinese goods and labor remain artificially cheap.

For example, Chinese assembly line workers earn approximately $2 an hour. In South Korea, the same worker earns $22 and the comparable U.S. wage is approximately $60 an hour. As China becomes wealthier, naturally the value of the labor wages should also increase. However, the Communist regime intentionally prevents the Chinese currency from appreciating; this unnaturally prevents the standard of living of the working class to improve and has resulted in large trade surpluses.

This economic tactic benefits the regime at the expense of the working class. More car manufacturers are thus forced to invest in China to utilize the cheap labor to keep costs down in an ultra-competitive industry.

Realities of China's Auto Industry

To access the Chinese market, foreign businesses must accept the Communist regime's restrictions. Companies often remark that they have no choice but to conduct business in China, despite many unfavorable factors.

Here's one example of the obscure laws for foreign enterprises in China: in an attempt to jumpstart the national auto industry, the Communist regime enacted protectionist measures for international manufacturers interested in establishing production facilities in China.

China only allows foreign automakers to enter China by setting up joint ventures with Chinese state-run counterparts. Chinese companies would then quickly learn the necessary skills of running an auto company. In order to protect their intellectual property and long-term interests, foreign companies often kept their own design and R&D away from their Chinese forced marriage partners.

According to industry expert Michelle Krebs' recent column at Edmunds.com, it was rumored that the Communist regime is even considering legislation to force foreign automakers to supply their previously protected designs and research to their Chinese counterparts as well.

"And then there's China, where international standards for intellectual property rights are not only flagrantly disregarded, but now appear to be sanctioned by the Chinese government. Word out of Beijing is that the government is considering a policy that could force foreign automakers, if they want to expand in China, to hand over auto designs and tooling to their Chinese partners," states Krebs

Similar to the entertainment and fashion industries, piracy of intellectual property is also a problem in the auto industry. Currently, General Motors is in a bitter lawsuit against Malcolm Bricklin's partner, Chery. GM claims Chery's top-selling vehicle, the QQ, is a direct copy of its Chevrolet Spark.

Even Bricklin sidestepped a question in an interview with Paul and Anita Lienhart in 2005 when they probed about the issues involved in working with a company which ultimately answers to the Chinese Communist regime. They asked: "Is it a good thing that the provincial government owns Chery?"

Bricklin responded, "This is the most wonderful thing that ever happened in my life. I'm going to sell a quarter of a million cars. I don't give a damn what everybody else thinks."

State rep taps China’s bounty

2006-06-09T15:44:00.000-07:00

State Rep. Fran Wendelboe and her business partner are behind a custom clothing business for plus-size women that uses tailors in China as suppliers.

Ten years ago, state Rep. Fran Wendelboe, the staunch conservative deputy House majority leader from New Hampton “wouldn’t have dreamed of doing business China.”

Even now, as a “pro-life person,” China’s encouragement of abortion and its one-child policy, “absolutely makes me sick.”

Yet Wendelboe and her partner are today doing business in China — a custom clothing business for plus-size women called Fit and Style — that went online in March.

Over the past few years, Wendelboe has been repeatedly traveling to one of the few countries that remains run by communism in an attempt to get her company off the ground. She briefly ran a factory there, and now plans to lead “escorted” shopping trips to Shanghai, beginning this fall.

“Shanghai is the fashion capital of China,” raves one of her Web sites. “You will find incredible buys on custom-made clothes, handbags, silks, pearls, jewelry … Almost anything you can think of can be purchased in Shanghai at prices you will not believe.”

Wendelboe has changed. Once she – along with critics of China, both left and right – wanted to isolate China and routinely lambasted those who promoted free trade with the country. For instance, in a U.S. Senate primary in September 2002, former Sen. Bob Smith critisized then-Congressman John Sununu in a New Hampshire Right to Life newsletter because he “rolls over for China,” voting for trade benefits, “even though China forces abortion on their young mothers every day.”

Wendelboe appeared in the same Right to Life newsletter in an advertisement that boasted that she was the only true conservative running in her congressional primary. She didn’t mention China in the ad, but, she said, she once echoed many of those anti-China sentiments voiced by Bob Smith.

But, said Wendelboe, “having gone there and seen what capitalism has done for the Chinese people for their attitudes, I have concluded that the way to stop communism is to let the masses taste capitalism.”

Thinking big
Wendelboe started her odd Asian odyssey almost on a whim, a vacation trip to Hong Kong with her friend, campaign finance manager and future business partner Linda Luhtala, several years ago.

Wendelboe had just endured a frustrating run for Congress, not just because she lost the primary, but because she couldn’t get enough business suits that fit her, even in plus-size clothing stores. The problem wasn’t just a matter of size. Most stores, she said, don’t sell clothes that fit well, and match people with a large top and smaller waist and vice versa. Often she had to buy two suits – if she could find two that matched – to assemble one suit that fit.

But in Asia, custom suits were both available and affordable, and she soon was filling a closet that – she said — was the envy of the legislature.

Wendelboe — who once worked for Montgomery Ward, had a few businesses under her belt (day care, real estate, floral design, not to mention assisting her husband’s plumbing business) – saw an entrepreneurial opportunity: import custom clothing for heavy-set woman.

Wendelboe and her partner thought big, perhaps too big. They bought a factory in Shenzhen (which they since sold), they invested in an expensive computer program to design patterns for larger women (which they no longer use) and they went in on a deal with a larger fabric company in another plant in Shanghai (abandoned after the would-be partner moved to Beijing.)

But through all these fits and starts, they got to know the country, and in particular Shanghai, better. Wendelboe remembers the first time she ventured into a Shanghai restaurant without a translator and had to walk around with the waiter and discretely point to what other patrons were eating. She ended up with turnips, tripe soup “and some kind of dish I think was chicken.”

Since then, she has translated a list of her favorite Chinese dishes and just hands it to a waiter.

She also learned to direct taxi drivers by pantomime, though she is about to break down and take a course in Mandarin.

More importantly, she learned that local Shanghai tailors can make custom clothes better than any computer – and after spending nine months finding several computer-savvy and reliable tailors – set up her Web site, fitandstyle.com.

At the site, one can either use a chart to click on some 30 different types of measurements or just send in an existing suit that fits to allow the tailors to create another one.

But the very restrictions in trade that China critics have advocated in the past have become what Wendelboe calls her “biggest headache.”

Once there were no quotas on imports, and Wendelboe could ship as many suits as she desired. Now businesses can apply for a portion of the quotas in increments of 100,000 suits, leaving niche businesses like Fit and Style out in the cold. Such quotas don’t apply, however, when delivering clothes in person. So that means less shipping and more tripping off to Asia. And that’s how the escort business idea got started.

To piggyback on these trips, Wendelboe is inviting her customers to come along. While the customer will pay for the airfare – and what they actually pay for clothes – Fit and Style will do the rest. For a $1,200 flat fee, Wendelboe said, her company will pick you up at the airport, set you up in an apartment, feed you – including some stops at some choice restaurants – measure you and go shopping with you, topped off with a river cruise.

Wendelboe doesn’t expect to make much on these trips. Only three or four are scheduled a year – with the first leaving in October — and fewer than half a dozen patrons are expected for each trip. But they hope to build a customer base for repeat Internet business, she said.

Some of Wendelboe’s legislative colleagues are a bit bemused by her endeavors, but reluctant to criticize the deputy majority leader.

Rep. David L. Buhlman, R-Hudson, recently co-sponsored a resolution last year condemning some of the movement toward free trade. The resolution – which was passed by a voice vote in the House, only to be permanently tabled in the Senate — specifically mentions China, which it said, had “engaged in a wide range of unfair trading practices, including the manipulation of currency and dumping below-cost subsidized products into the United States market.”

Buhlman said he thinks that there should be some limits on what is being shipped over from China, though he added, “I don’t know about plus-size dresses … but there should be room to do that over here.”

Wendelboe said she looked into that, but said that tailors simply don’t do the kind of custom work here for competitive prices.

Buhlman replied that “they used to make them here, but business has fallen off because we can’t compete with the wage level over there.”

The resolution, he said, was not just aimed at China, but “various trade agreements that hurt workers, not companies. The companies make out just fine.”

Wendelboe, however, anticipated such concerns about the low wages in China. The mostly transient workforce is happy to send money back to their families, she said.

“What we consider slave labor rates support many people back in their villages,” she said. “You have to see it to understand.”

For example, she said, the workers who make fabric for suits work in small groups of five or six in various homes. She stopped off in one person’s home, and it wasn’t some big capitalist exploiter, but a small entrepreneur. “We have opened doors for so many people,” she said.

Those who fear competition with China once feared competition with Japan, she said. But it works two ways. China is a huge market, and if capitalism results in an increased living standard there, the Chinese people will buy more goods from the United States.

“They all want to buy American stuff,” she said.

Buhlman didn’t want to be drawn into an argument with Wendelboe.

“Fran is right. Introduce them to capitalism. Everything she says is right,” he said.

TNS head promotes market research

2006-05-27T21:15:00.000-07:00

MARKET research is an important element for any company entering a new industry or a new market like China as they need to know market demand before going into actual production, said Jim Sailor, a veteran of the industry.

Sailor, managing director of TNS Corp in China, is trying to sell market research services to his clients on China's mainland and Taiwan.

"The most exciting work is that we are seeing the trend and the change before anybody else. We are researching the most interesting and fastest changing market in the world and our job is to help our clients," Sailor noted.

He has spent 13 years in the market research business, most of the time in Hong Kong and Taiwan, with TNS, the world's second-largest market research firm.

The long experience not only exposed him to different research skills and techniques but also gave him an overview of the industry in China, one of TNS' fastest growing markets.

"The marketing research sector has already spread well beyond the big three cities and the progress of many more cities and regions has become important for market watchers," he said.

Sailor wonders which Chinese cities will become the Los Angeles, San Francisco and Miami of China, if Beijing is regarded as Washington, Shanghai as New York and Guangzhou as Chicago.

China's double-digit economic growth has seen many other cities blossom such as Chongqing, where many new companies have sprouted.

They need more market research services to identify business opportunities and expand nationwide which, in turn, brings a brighter future for Sailor's research business.

Viewing the huge potential in China, foreign research giants have also entered the market which intensifies the competition. Most of them are busy fighting for international clients.

However, Sailor has other plans to meet the competition such as paying more attention to doing business with less known Chinese firms although its major clients are still international firms in the Fortune top 500 list.

"Our work is help them to navigate the market and we like to grow with them too. When they become famous and successful, they could be our regular, big and important clients in the future," Sailor explained.

TNS has tapped into China since 1980s and set up its first office in 1992 with more than 350 employees doing research in China's mainland and Taiwan.

The company now has developed a client base of more than 100 companies, about 10 percent of which are domestic firms. Last year, its sales revenue jumped more than 30 percent.

"It's not only about our plans in China, the reason we are really building up is because there are more and more companies that require our business in China, an exciting place going through so many changes in the economy," he said.

TNS' business scope includes customized research, media research, TV audience measurement, and consumer panel, which could help clients gauge demand and market situation of various products and services in China.

Besides basic scientific templates to follow as a way to ensure the efficiency and accuracy, TNS also needs good researchers to interview people to collect first-hand information.

A research company needs the ability to present a trend, for example, of an industry or product, for its clients.

"What we have to ensure is that the way we grow our company does not ever sacrifice our high standards even if that means investing more time, more effort, and more money into what we do," Sailor said.

DOs and DON'Ts of doing business in China

2006-05-22T21:12:00.000-07:00

Global sourcing deals can be lost by the simplest of mistakes. Don't let it happen to you!

Successfully negotiating new supply markets is the top priority for many procurement organizations today. Some of the most promising supply deals have been crushed by the simplest faux pas or inadvertent offense. With that in mind, Purchasing recently polled a group of procurement professionals about the dos and don'ts of doing business in China.

"Don't be in a rush" was one of the major themes that came out of the survey. Procurement professionals in a variety of industries and locations said doing business in China happens at a much slower pace than it does back home.

"Make your first trip or first several trips to China with no intention of buying or negotiating anything," recommends one buyer responding to Purchasing's survey. "Wait until you better understand the business climate. Do not rush into a deal."

Communication issues are the highest hurdles for buyers looking to work with suppliers in China. Certainly, language is an issue when a U.S.-based company is doing business in China. According to Purchasing's survey, very few buyers (less than 2%) polled going to China consider themselves fluent in the language before going there. Most said they knew a few expressions in Mandarin or Cantonese and about one in five hired a translator for their first trip. But even hiring a translator can impact your deals.

"When hiring a translator, be sure they have experience in negotiating and/or doing business in China," says an international trade consultant responding to the survey. "Just because they speak the language doesn't mean they can do business and translate industry-specific terms correctly."

Another buyer responding to the survey says, "I'd recommend making arrangements to hire a graduate student from a Chinese university that speaks clear English as your translator—engineering students and MBAs are best. The student will be cheaper, more reliable than translators provided by suppliers and the student will benefit by learning from you, the foreigner."

Several survey respondents said they bring a Chinese co-worker with them on trips, even if that co-worker is not in procurement. Gus Herrera, purchasing manager at KRh Thermal Systems in Irvine, Calif., says: "Our senior mechanical engineer is Chinese and he accompanies us on all trips to China. He's there for both translation services as well as quality audits."

But communication is about more than language. According to the U.S. Commerce Department's website, www.Buyusa.gov, "Traditionally, conversations in China, even business conversations, start out with innocuous topics, to set a mood of friendliness. Eventually, the small talk might become quite direct, which is not meant to be offensive. It is quite common on short acquaintance to be asked about personal matters, including questions about your family status."

Yes means....

One of the biggest points that came out of the Purchasing survey is that when dealing with Chinese companies, "yes" does not always mean "yes." Buyers and supply chain professionals doing business in China warn that Chinese companies and suppliers may act in meetings as if they understand and agree with what is being discussed, but in truth they may not, which can create major potholes down the road. Nodding of the head does not, in fact, indicate that they can provide the products or services you're asking about—only that they are listening and following you.

"Culturally, Chinese companies and workers do not like to say no," says a buyer at U.S.-based manufacturer. And another says, "We spent months trying to get out of a supplier what we thought they agreed to in a meeting."

The solution, say most experienced buyers in China, is to get as much in writing as possible and structure meetings so there is a short review or "quiz" at the end of the meeting to confirm everything. Buyers should have some questions in mind to help determine if the supplier has, in fact, understood everything and has a firm grasp of what is needed and when.

For example, questions should not be phrased as, "Can you do this for us?" But a more effective question would be: "How will you do this for us and when will it be done?"

"Be precise and never leave anything open for interpretation because it will come back to haunt you," says one survey respondent. Several others suggested more face-to-face communication and "relationship-building" discussions are required to create partnerships in China than is typically the case in the U.S.

Know the org chart

Chinese companies are extremely hierarchical—knowing the seniority/rank of all of the players in every meeting will help buyers interpret the responses received. In meetings, all Chinese staffers typically defer to the highest manager in the room, so knowing who that is can help to understand the progression of the discussion.

"It can be very difficult to know immediately who the real decision maker is at a Chinese company," says one experienced global sourcing manager. "You have to build relationships and work to understand the dynamics of interactions in order to understand the hierarchy."

Survey respondents also said maintaining a single point of contact at a Chinese supplier is nearly impossible because of the heavy emphasis on team tactics. Chinese companies rely much more on lateral movement of employees than U.S. firms do.

Meetings with Chinese companies tend to be very formal from conversation to customs to clothing. Buyers in the survey also point out that Chinese suppliers do not respond well to aggressive negotiation tactics like shouting, threats or ultimatums.

One global supply chain manager responding to Purchasing's survey points out: "Chinese culture takes after-work socializing very seriously, so don't turn down dinner invitations or drinks." But several others warned of eating and/or drinking too much of the wrong food, as early morning meetings can be easily sidetracked "by not knowing what is being ingested the night before" as one buyer puts it.

Purchasing's World Tour

Purchasing will be surveying its readers on tips to doing business in other countries as well. Look for surveys in e-newsletters and on Purchasing.com soon!

DOs

DO handle all business cards (yours and theirs) with two hands and delicately. Chinese businesspeople equate the way you treat their card with the level of respect you have for them personally.
DO have a set of your own business cards printed with English on one side and Chinese lettering on the other. And be sure that lettering is proofread by someone that not only understands Chinese language, but also Chinese business customs.
DO dress conservatively for business meetings. China is still a very conservative nation culturally.

DON'Ts

DON'T give a Chinese businessman a green hat as a gift. As Pam Trunca, director of purchasing at Delta Education, points out: "When a man wears green in China it indicates his wife has been unfaithful. While attending a trade mission conference, one of the vice mayors in attendance from the U.S. gave one of the Chinese dignitaries a green hat (Celtics fans beware!). The entire auditorium went silent. It was extremely embarrassing for those of us from the U.S. that understood what it meant."

DON'T show up to a business meeting late if you're hoping to make a positive impression. Chinese companies take tardiness more seriously than U.S. businesses do.
DON'T use terms or expressions that may be considered slang or euphemisms. Telling a supplier you think this partnership will be a "home run" doesn't mean much to someone who doesn't know the difference between a "home run" and a "foul ball." Other expressions or topics survey respondents suggested avoiding (based on personal experience):

Examples of terms to avoid

"Split the difference"
"On the same page"
"Bottom line"
"Cost downs"
"Guys" instead of "men"
"Yeah" instead of "yes"

Acronyms

Examples of topics to avoid in conversation
Politics
Religion
Ultimatums

U.S. firms complain of piracy in China

2006-05-17T20:53:00.000-07:00

Lack of transparency and rampant piracy are major obstacles for U.S. companies doing business in China, the American Chamber of Commerce in Beijing says.

"China has a very positive commercial environment," chamber President Charles Martin said at a conference unveiling the group's annual report on China's investment climate, based on surveys of over 200 U.S. companies in China, the South China Morning Post reported Wednesday.

But he said protection of intellectual property rights remained a problem despite repeated crackdowns on piracy.

Among those surveyed, 55 percent of companies said they were negatively affected by piracy, and 41 percent reported increased counterfeiting of their products. The problem is costing U.S. companies billions of dollars, the report said.

Among other problems encountered in China, more than 70 percent of firms complained of unclear rules, bureaucracy, lack of transparency and inconsistency in the interpretation of regulations.

The report said China lagged far behind in honoring its WTO commitments in achieving greater transparency in formulating and implementing laws and regulations.

The chamber has 2,100 members in China.

The true price of doing business in China

2006-05-05T08:21:00.000-07:00

Are Yahoo and Google betraying the promise of the internet as a tool for free speech?

Yahoo appears to have kowtowed to the Chinese government yet again and passed details of a fourth dissident writer's email account to the security forces, brightening the spotlight thrown on the dubious compromises that western businesses are making to operate within the world's second largest internet market.

Doing business in China has always involved a heavy dose of realpolitik - a senior mobile phone industry executive, desperate to get into the world's fastest growing mobile market, once described operating in China to me as akin to walking into a room and taking down his trousers. But what makes Yahoo's flagrant co-operation and the recent self-censorship carried out by search engine rival Google so shocking to web users, is that the internet has been sold to the world as a tool for free speech not for maintaining or even strengthening the political status quo.

Internet companies are supposed to be on the right side of the argument, not act just like every other branch of big business. Learning that Microsoft agreed to cut off China's most famous blogger, Zhao Jing, even though the posts the Chinese government objected to were located on servers in the US, raised many eyebrows but not so many hackles on the internet. Microsoft is driven by the profit motive.

But discovering that a search for Tiananmen Square on Google's Chinese search engine produces pictures of happy smiling couples having their photos taken in the square and no hint of the violent repression of June 4, 1989, is just plain wrong. (Incidentally, the Indiana School of Infomatics produced a fantastic tool for comparing results between Google.com and Google.cn. Unfortunately, it was down at the time of writing. Conspiracy lovers will undoubtedly have their own theory as to why this has occurred.)

Google maintains that it is doing the Chinese a service by improving their access to information, albeit with some glaring exceptions which can be seen by users. This relativist argument sits uneasily with the company's mantra of Don't Be Evil.

But away from the moral hand-wringing of the west, Chinese internet users who have lived with censorship all their lives actually rate Google very highly. The attitude of China's growing digerati to Yahoo, in contrast, is very negative, seeing it as a collaborator with the regime.

Wang Xiaoning was jailed for ten years in 2003 for incitement to subvert state power and the evidence used during his trial, according to New York-based Human Rights in China, included information about his Yahoo email address. Yahoo maintains that it complies with local laws. Google, in contrast, seems to have higher standards. It has fought hard against moves by the US Department of Justice to get access to search requests and website addresses as part of its defence of an online pornography law.

Google is not looking to launch its email service in China so is unlikely to come up against the blatant government interference that has so scuppered Yahoo's seven years in the country. But having already shown its willingness to censor the internet to comply with the political tastes of the Chinese authorities what is to stop them making similar demands to those of the Department of Justice? When that happens, Google's response will show internet users on both side of the Great Wall whether they were mis-sold the idea of one web for all.

Google: Bowing to censorship comes with doing business in China

2006-04-15T21:57:00.000-07:00

Internet giant Google Inc. on Wednesday defended bending to China's strict censorship rules, saying it had no other way to enter a nation with huge online growth potential that may shape the company's future.

Eric Schmidt, Google's chief executive officer, acknowledged heavy criticism on Capitol Hill for submitting its Chinese-language search engine to censorship.

But he said Google had to block links to sensitive subjects as a condition for working in China, which has 111 million Internet users and may one day surpass the United States to have the most online surfers in the world.

"We have all made commitments to the government that we will absolutely follow Chinese law. We don't have any alternative," Schmidt said at a news conference.

The event was called to launch Google's Chinese-language brand name, but questions repeatedly veered to the Mountain View, Calif., company's decision in January to block links at its www.google.cn Web site to issues that the propaganda ministry deemed sensitive, such as the bloody suppression of the 1989 Tiananmen protests, later democracy efforts and issues related to Tibet and Taiwan.

Internet freedom advocates have accused Google of straying from the company's core values and its longtime motto of "Do no evil." Yahoo! Inc. and Microsoft Corp. also have come under fire, including at a March hearing on Capitol Hill, for acceding to China's censorship.

Schmidt said Google's desire to help Chinese Internet users outweighed concerns about freedom of expression.

"It's crucial that Google participate, help and serve the Chinese user," he said. He added that China isn't the only nation in which certain information is barred, mentioning later restrictions in Germany on Internet links to neo-Nazi movements.

"We've made a decision that we have to respect the local law and culture. So it's not an option for us to broadly make information available that is illegal or inappropriate or immoral or what have you," Schmidt said.

While Google is the largest search-engine company in the world, it lags in China behind Beijing-based Baidu.com.

Google flew about half its senior management team to Beijing to roll out the company's Chinese-language brand name. Many Chinese Internet users already know the company by its English name, pronouncing it "go-go," or "little doggie" in Chinese.

"We have looked for a Chinese name for four years," said Allen Wang, the chief marketing officer for Google in the Asia Pacific region.

The company settled on "Gu-Ge," which means "harvest songs" in Chinese.

Google still is working to translate its English-language products into Chinese, and by midsummer should have more than 100 software engineers working at a research and development center in Beijing, company executives said. The center eventually may create products for markets worldwide.

Orientation on China's History, Culture and Language

2006-04-06T20:29:00.000-07:00

Or-ri-en-ta-tion: The ability to locate oneself in one's environment with reference to time, place and people.

In response to the ever-increasing interest to learn more about China, China Insight and Mingzhou Huaxia Chinese School is pleased to announce that they will be offering a China Orientation Program. Whatever your reason for traveling to China, be it for vacation or doing business, this China Orientation Program will better prepare you and demonstrate to your host that you are genuinely sincere about your visit or just want to learn more about China.

The program will consist of intense teaching of Chinese which is designed for adults whose native language is not Chinese Mandarin, but has a desire to learn it quickly and be ready to use it. It will focus on providing hands on basic and effective communication skills along with pertinent Chinese historic and cultural backgrounds. Many basic Mandarin phrases spoken in introductions, greetings, making a phone call, eating out, shopping, asking directions, business negotiations and so on will be covered.

The program has been designed to help students learn easily and will introduce the characteristics of the Chinese language by comparing the difference between English and Chinese. Material to be covered includes phonetics, grammar notes and Chinese characters. Another lesson will teach how to use a Chinese dictionary.

As this program was developed, the focus was to provide the first time traveler to China, a sufficient basis to comfortably travel the country while also providing a more experienced traveler with additional knowledge and the opportunity to improve their communication skills.

The China Orientation Program will total 12 hours of lessons held over four Saturday afternoons of 3 hours each and begins on April 22, 2006. It will be held at Mingzhou Huaxia Chinese School, which holds classes at Eden Praire Central School located at 8025 School Road, Eden Praire, MN. The fee is $175.00. For complete information on this program, contact Hong Sang at (763) 494-4789 or visit their website at www.mnhuaxia.org to register online.

Mingzhou Huaxia Chinese School is a non-profit organization whose primary goal is to teach children Chinese, promote Chinese culture and serving the community. Present enrollment is over 200.

LSU business school scaling the Great Wall

2006-03-24T20:42:00.000-08:00

LSU’s E.J. Ourso College of Business is in the midst of an ongoing effort to develop ties with China and officials hope in the next few years the college will be the premier university for learning about doing business with the country.

The China program has several fronts, including taking students for tours of the country, offering internships that allow MBA students to work with corporations such as PepsiCo. on projects for the Chinese market, and the recent Chinese translation of two books on franchising authored by Bob Justis, co-director of LSU’s Institute for Entrepreneurial Education.

Robert T. Sumichrast, dean of the business school, said the China initiative got started a year ago, at the urging of Provost Risa Palm.

“Beginning in 2005, China became the largest trading partner with the state of Louisiana,” Sumichrast said. “And we find that many of our alumni are interested in China.”

Sumichrast (who has business cards printed in Chinese) said plans are to develop a business curriculum that is narrow geographically, focusing on major cities such as Shanghai and Beijing, but broad and deep. Plans are to hire faculty to teach about Chinese businesses and encourage faculty to deal with China.

Month Mandarin™ Program

2006-03-06T20:38:00.000-08:00

Chinese Language Institute of Beijing Launches “1”: Intensive Chinese Learning Program Focuses on Modern Spoken Communications

Intensive Chinese program offers professionals and students seeking to learn Chinese a new way to learn Chinese through computer-assisted language learning and prioritization of learning skills.

Chinese Language Institute of Beijing (C.L.I.B.) has launched its short-term Chinese language learning program, “1-Month Mandarin™”. C.L.I.B. was founded in 2005 to offer a new kind of Chinese learning experience to students and professionals interested in studying abroad in China or doing business in China.

With China's entrance into the WTO and with the Beijing 2008 Olympics on the horizon, the need for expedient methods of learning Chinese has grown. The Department of Commerce states 14,000 US companies are doing business in China. Chinese language communication skills in young professionals and graduating students are highly sought after by companies desiring to do business in China. The “1-Month Mandarin™” program helps meet this need by providing a fresh and focused approach to learning Chinese.

The program’s specialized focus is helping students learn Chinese communication in the most practical manner possible. "There are two major groups of students learning Chinese," says Matt Worley of C.L.I.B. "There are those that want to pass the HSK (the Chinese language proficiency test, which requires a lot of handwriting Chinese characters) and those that are looking to do business in China or find opportunities in China. It is the second group that we are helping learn Chinese. We teach them modern skills such as typing Chinese characters rather than writing Chinese characters by hand."

The new Chinese language school offers Chinese learners special features such as:

Computer-Assisted Language Learning (CALL)
Computer labs and Chinese learning software built into the curriculum
Complete assistance from arrival in China until departure
Uniquely produced Chinese learning materials
Two hours per day of personal Chinese language tutoring

Short, intensive, Chinese classes are the specialty of the program. Students wishing to study in China for longer periods of time can do so through an agreement with the University of International Relations, also in Beijing, China.

Ms. Zhao, Chinese Language Program Coordinator, states, "This new approach to studying Chinese enables students to learn conversational Chinese much faster than traditional methods used by other Chinese language schools in China."

This approach to learning Chinese is designed to deliver the equivalent level of Chinese language speaking ability as a one-year Chinese language course in America. Mr. Worley explains, "When you start with great Chinese teachers, invest in the best Chinese language software and materials, and invest in a personal tutor for every student while simultaneously focusing on the most useful communications, you are bound to experience increased levels of Chinese language acquisition."

About the C.L.I.B.

The C.L.I.B. was established in 2005 as a Chinese language school providing Chinese studies to foreigners who study abroad in China. The mission of C.L.I.B. is to provide Chinese language learning opportunities to firms and individuals desiring to do business in China. The school in China focuses on modern communication and spoken Chinese. For more information please visit the C.L.I.B. Chinese school website.

Looking to China

2006-02-27T19:40:00.000-08:00

China is an enormous force in today’s global economy that offers great opportunities for companies of all sizes that can get into the fray quickly and then adjust to a constant wave of change.

Three experts, speaking today as a part of a Weatherhead School of Management panel at Case Western Reserve University, said that conducting business in China is getting easier, but that the country’s astounding pace of growth and change poses significant challenges to sustainable business operations.

Panelist Craig Arnold, president of Eaton Corp.’s fluid power group, said the need for banking system reform, tensions between central and provincial government, and a widening gap between rich and poor are among the top challenges companies must consider when assessing business opportunities in China.

For those who wish to enter the market, he said “speed is vital” and that companies must focus locally, empowering their local management team to act and producing tailored products to serve Chinese markets.

China’s importance is not just about low-cost manufacturing, as many suggest, he said. It’s about serving the needs of China’s huge population and tapping into the intellectual capital of a region that graduates half a million engineers and scientists a year.

If you’re not in China or India in a big way, by definition, you will lose market share, he warned.

Panelist Leonard Lynn, interim director of the Global Business Studies Institute at Weatherhead, echoed the sentiment about the country’s enormity.

Indeed, according to the World Bank, China’s population exceeds 1 billion and its GDP increased 6-fold between 1984 and 2004 to $1.65 trillion.

But doing business in China isn’t just for multi-billion dollar diversified industrial manufacturers like Eaton, which has 7,000 employees, 33 manufacturing plants and $800 million in revenues in the Asia Pacific region.

Middle-market companies can use joint ventures to gain a foothold in the growing economy, if they lack the capital or human resources to go in alone, said panelist Peter Shelton, a partner with Benesch, Friedlander, Coplan & Aronoff and co-chair of the law firm’s China Group.

“As larger businesses have gone overseas, many smaller companies have been compelled to follow them to continue supplying them,” Mr. Shelton said.

The law firm has hired a Chinese lawyer away from a competitor in Cleveland, opened a Shanghai foreign representative office and is in the process of obtaining a license to practice law in China to meet the demand from smaller companies for entrée to China.

Net Firms Faulted on China Actions

2006-02-16T16:22:00.000-08:00

U.S. lawmakers accuse Google, Yahoo and others of helping Beijing violate human rights.

U.S. lawmakers lashed out at Google Inc. and other prominent Internet companies Wednesday, accusing them of helping the Chinese government violate human rights.

As representatives from Google Inc., Yahoo Inc., Cisco Systems Inc. and Microsoft Corp. looked on, lawmakers from both political parties delivered withering attacks and called for oversight on dealings with China.

ADVERTISEMENT

"Your abhorrent activities in China are a disgrace. I simply do not understand how your corporate leadership sleeps at night," said Rep. Tom Lantos of San Mateo, the ranking Democrat on a House International Relations subcommittee on human rights. Lantos' California district includes the high-tech empire of Silicon Valley.

The chairman of the subcommittee, Christopher H. Smith (R-N.J.), held the hearing in Washington to ask the companies about their procedures in China and demands from the Chinese government.

Last week, Paris-based Reporters Without Borders, an advocacy group for journalists, said Yahoo provided electronic records to Chinese authorities that led to an eight-year prison sentence for writer Li Zhi in 2003.

In September, Yahoo was accused of helping Chinese authorities identify Shi Tao, who was accused of leaking state secrets abroad and was sentenced in April to 10 years in prison.

Google came under fire last month for bowing to Chinese pressure to block politically sensitive terms on its new Chinese site. Microsoft also has angered human rights activists by shutting down the blog of a critic of the Beijing government.

Smith said he planned to introduce a bill this week to formalize the goals of a new State Department task force to help U.S. technology firms protect freedom of expression in countries that censor online content.

The bill will include export controls on certain types of hardware and software and prohibit putting e-mail servers in countries that lack U.S.-style due process laws, Smith said. Cisco makes much of the equipment China employs for filtering.

"If a company allows itself … to filter terms such as 'democracy' and 'religious freedom,' they will be in violation of U.S. law," Smith told Reuters regarding the proposed legislation, which refers to 14 authoritarian countries including China.

The U.S. tech firms stressed the difficult trade-offs they make in doing business in China, where the admission price is following local laws and where aggressive Chinese competitors would celebrate their pulling out.

"The requirements of doing business in China include self-censorship — something that runs counter to Google's most basic values and commitments as a company," said Google Vice President Elliot Schrage.

"In an imperfect world, we had to make an imperfect choice," he said.

Year of the Dog starts off with a bang

2006-01-30T07:35:00.000-08:00

OSU’s China Night part of worldwide New Year festivity

Members of The Chinese-American Benevolent Association help usher in the Year of the Dog by performing a traditional lion dance at China Night 2006, held Sunday in the Memorial Union ballroom. The lion dance is performed to bring good luck and fortune. A mythical creature, the Chinese lion represents strength, wisdom and good luck and helps drive away evil spirits.

Much tradition surrounds the Chinese New Year and the 15 days to come after it. Dumplings that resemble Chinese gold ingots are a traditional food. In order to not “cut” the New Year’s good luck, knives and scissors are not recommended to use. People tend not to use the Chinese word for “four” since it sounds so close to the Chinese word for “Death.”

Jan. 29, 2006 brought in the first day of the Chinese New Year, and with it came lots of festivities and tradition. Many people of different cultures and races celebrated all over the globe in honor of the New Year.

Although most people know the Chinese New Year by its animal equivalent, such as this year’s Year of the Dog, it actually has a few other aliases. According to the ‘stem-branch’ system the year is known as Bingxu, and the Chinese lunar calendar marks this as year 4703.

In London, more than 200,000 people hit the streets to join in the fun. Big parades and parties were held in New York, Toronto, and Beijing, and many other big cities had their own celebrations planned out, according to several broadcasting stations’ Web sites.

OSU was no exception. China Night 2006 kept up with the best of them. More than 400 people made their way through rain and muck to get to the Memorial Union Ballroom.

Many men and women dressed up in formal Cheongsam and Qipao, traditional Chinese clothes, and the $8 event greeted them with authentic food, clothing, and custom.

Oriental lamps and streamers brightly decorated the room, and the smell of noodles and curry beef from the kitchen could make anyone hungry. Guests were treated to a buffet-style authentic Chinese dinner while being serenaded by the Crescent Valley High School trumpet choir.

After everyone had stuffed themselves, John Young, professor in anthropology, welcomed the crowd and gave his thoughts and hopes toward the upcoming year.

“The Chinese New Year Celebration is the time to pay debts, settle disputes and shed malevolent influences to bring families and members of society together for a new beginning,” Young said.

From then on, a night of tradition and entertainment ensued. Dancers in amazingly detailed lion costumes jumped around and ate people’s money, a video displayed the innovations of modern-day China, and girls in bright sparkly outfits danced with twirling umbrellas.

With huge cheers and applause, you could tell the night was a success.

“We’ve been preparing this for three months,” said Tian Qin, president of the Chinese Association of OSU, “and I’m very pleased with the way things have turned out.”

Land of opportunity

2006-01-22T11:24:00.000-08:00

China's bustling Guangdong province is emerging as an export hot spot!

As far back as the second century B.C., Chinese ships set sail from this storied city on the Pearl River for the far shores of India and Africa, laden with fine Chinese silk.

Today, Guangzhou is still a bustling trading center, with mammoth container vessels departing from here and nearby boomtown Shenzhen, loaded with computers, toys, textiles, electronics and cars bound for ports around the world.

Also known as Canton, this city of more than 10 million people is the capital and largest city in Guangdong province, China's leading maker of exported goods and its most powerful magnet for foreign companies.

Many such companies are based in California, where the province has forged strong commercial and cultural links, thanks to generations of Chinese immigrants to the Golden State.

Lured by tax cuts, cheap land, newly built infrastructure and other incentives, major Bay Area companies such as Cisco Systems Inc., Intel Corp. and Autodesk Software Co. are active in Guangdong province. Increasingly, so, too, are smaller companies such as Dublin's Achievo Corp., a software and information-technology outsourcer, and Richmond's MBA Polymers Inc., a recycler of plastic from junked personal computers.

International companies in Guangdong are often led by Chinese Americans whose cultural and linguistic ties to the province make business deals a relatively easy "get." Guangdong also exercises a powerful appeal for mainland Chinese, who flock to the southeastern coastal province in search of opportunity.

As a result, Guangdong is a dynamic polyglot of big-idea entrepreneurs, powerful executives at the helm of major shipping and manufacturing concerns, newly arrived job-seekers from around the country and enterprising foreign expatriates. (See accompanying profiles on Page J6.)

Less glamorous and politically important than Beijing or Shanghai, some parts of Guangdong province are more prosperous than either, thanks to radical pro-market reforms introduced here in the late 1970s, before change took root anywhere else in China, which is still nominally communist.

Indeed, this swath of the Pearl River Delta area "has been the fastest-growing portion of the fastest-growing province in the fastest-growing major economy in the world,'' notes a report from Invest Hong Kong, a government agency in Hong Kong, 60 miles from Guangzhou and closely tied to it by commerce.

The poetically named Pearl is very much a working river in the modern mode. Giant metal cranes and stacked cargo containers flank the waterway as it nears the South China Sea. Polluted battleship-gray skies over the river in central Guangzhou display the cost of breakneck industrialization. Nevertheless, new companies continue to come; some are zeroing in on the area's environmental needs, finding market opportunities there.

MBA Polymers, partnering with state-owned Guangzhou Iron & Steel, recently built a $12.6 million plant on land that used to be covered by banana trees. The plant, opened late last year, is 55 percent owned by MBA Polymers.

"If you're a very large company, you don't need to have a Chinese partner,'' said Richard McCombs, MBA Polymers' chief financial officer. But for a small company like privately held MBA Polymers, having a well-known, politically connected Chinese partner is invaluable, he says.

MBA Polymers found its local partner by using Galaxaco China Group LLC, a San Francisco company run by well-connected investment bankers George Sycip and Richard Chong, who scour China for deals, McCombs said. They brought in Guangzhou Iron & Steel, which wanted to diversify into new technologies.

MBA Polymers uses a proprietary technology to break down the hard plastic in discarded PCs so it can be re-molded by other companies and used again in other products. This appeals to Chinese officials, McCombs said, because the fast-developing nation has a huge appetite for plastic, which usually has to be imported. Breaking down the plastic within China allows the Chinese to avoid the costs and delays of importing the plastic they need for manufacturing, and helps to reduce China's widespread pollution by recycling material that would otherwise be buried in landfills or simply burned.

"There are millions of pounds of plastic,'' McCombs said.

MBA Polymers also operates a busy plant in Richmond, but struggles with the high cost of land and labor in California, he said. Both are cheaper in China, where the new plant employs state-of-the-art technology that is more advanced than anything the company uses in the United States.

McCombs acknowledges that doing business in China is not always easy for a U.S. company. Job turnover in booming Guangdong is high, with new enterprises spelling new opportunity. So, new workers often have to be hired and retrained. And local contractors can be unreliable. At MBA Polymers' new plant in the Nansha Development Zone near Guangzhou, all the electrical work had to be redone because the work was not good enough.

Add to that what many China-watchers decry as weak protection of intellectual property, corrupt Communist Party cadres and sometimes confusing contracts, and the challenges of operating in the world's sixth-largest economy can be daunting.

Still, the lure of this dynamic part of China is hard to resist.

For one thing, most infrastructure in the Nansha Development Zone at the water's edge just south of Guangzhou is ultramodern.

Much of the development around the province carries a "made in California'' label. The first phase of Guangzhou's New Baiyun International Airport, which opened in July 2004 and cost $520 million, was built by Parsons Corp., a Pasadena rival of San Francisco's Bechtel Corp.

Already five times bigger than the city's old airport, it will grow still larger in the next few years, and may attract U.S. airlines. Certainly, airline interest is there. United Airlines has petitioned the U.S. and Chinese governments for permission to fly nonstop between San Francisco and Guangzhou, and has opened a small sales office in Guangzhou in the hope that permission will be granted.

South of the airport, two 35-story office towers are rising in central Guangzhou. They were designed by architect Brian Lee, a partner in the San Francisco office of Skidmore, Owings and Merrill LLP, which is busy in China. The firm has also worked on major projects in Shanghai and in Beijing, where Lee designed a huge, state-owned bank building.

"Guangzhou is very interesting,'' Lee said. "It's going through a growth phase now that's happened in Beijing and Shanghai already. Guangzhou is going to have a new central business district, a new library, a new Shangri-la Hotel, a new convention center.''

California companies are not only designing and putting up new buildings, they're snapping up Chinese companies and opening offices throughout Guangdong province.

Achievo Corp. bought Guangzhou's Jeyo Computer Technology, a small Chinese outsourcing provider, late last year, and has big dreams in China, according to Achievo Chief Executive Officer Robert Lee. "We will grow both organically and through acquisitions,'' said Lee, who didn't disclose the price of the Jeyo purchase.

Lee, who was born in China and is now a U.S. citizen, is keen on China as an outsourcing locale, saying it's preferable in many ways to Bangalore and other famed Indian outsourcing centers.

"China is a lot closer to the U.S., time-zone-wise,'' he said. "The flights are easier. They're a lot cheaper. And the worker turnover rate in India is very high these days because of their success.''

Privately held Achievo, which has been in China for four years and has 80 percent of its 600 employees there, has set up shop in a sprawling new industrial park near Shenzhen, a city of 7 million that sits on the border with Hong Kong.

Since its creation in the 1980s at the behest of China's late leader Deng Xiaoping, Shenzhen has been a manufacturing center and back-office city for Hong Kong, which many foreign companies choose for their regional Asia headquarters to take advantage of Hong Kong's strong banks, rule of law and business transparency.

Although Shenzhen is robustly profit-minded, touches of China's socialist command and control economy linger. Near Achievo's Shenzhen digs, recordings of brassy march tunes blare in the morning air, and a billboard admonishes workers to keep busy: "Empty talk endangers the nation. Positive work brings prosperity,'' it reads, in Chinese and English.

Achievo often uses Chinese information technology engineers for clients that include DaimlerChrysler, Toshiba and the United Way of Silicon Valley.

None of the drawbacks of doing business in China has stopped California companies from jumping into commercial hot spots like Guangdong province, says Guangpei He, a senior manager for Autodesk Software (China) Co. San Rafael's Autodesk claims 90 percent of the China market for architectural and construction software, according to Guangpei, and counts among its clients the Guangzhou Design Institute, which oversees development. The institute uses Autodesk 3-D software in its work and is considering other products from the Bay Area company, he said.

All this is consistent with the hustle and flow of Guangdong province, where intense development just seems to whet the appetite for more development, and work reigns supreme. On the road to the ferry terminal that links Shenzhen to Hong Kong, a hortatory billboard declares, "Time is money. Efficiency is life."

--------------------------------------------------------------------------------
Guangdong at a glance
What it is: South China province that produces one-third of all Chinese exports and attracts nearly 30 percent of China's foreign direct investment. Population 110 million. Capital is Guangzhou (Canton), with a population of more than 10 million. Border boomtown is Shenzhen, population 7 million.

Historical connection: Guangdong is the ancestral homeland of many Chinese Americans, from the 19th century to today.

Why Bay Area firms are setting up shop there: Tax breaks, cheap land, fast track for building projects, modern rail, road, water and airport facilities and well-educated Pearl River Delta workforce for manufacturing. Proximity to Hong Kong for front-office administration, banking and shipping.

Who's there: U.S. firms such as Cisco; Oracle; Intel; Proctor & Gamble; Autodesk; Skidmore, Owings and Merrill; GE Plastics; plus medium- and small-size American companies; Japanese carmakers Toyota and Honda.

CWB to expand presence

2006-01-12T21:06:00.000-08:00

The Canadian Wheat Board (CWB), the sole exporting agency of Canadian wheat and barley, is poised to increase its presence in China by providing updated wheat processing technologies for Chinese mills and food processors.

Adrian Measner, president and chief executive official (CEO) of CWB, expected that its annual wheat sales to China will grow to 3 million to 4 million tons in the next three years.

The CWB sold 1.8 million tons of wheat to China in the 2003-04 crop year and 2.5 million tons of wheat in 2004-05.

"Although we are likely to see a decline in wheat exports to China in this crop year because of a smaller crop in Canada, I still hope the quantity will enjoy a steady growth in the coming years," Measner said.

The CEO recognized that, in the four decades the CWB has been doing business with China, the country has increased its demand for grain products, in particular high-quality products. He said Chinese customers are looking for better quality wheat partly because they use some of this wheat as planting wheat, and expect it to improve the quality of local wheat.

"It (the Chinese market) is different from some other markets, such as some Middle East countries and Latin American countries, which demand medium-quality wheat."

Therefore, the board will continue to focus on quality in China.

"We will sell to China the best quality wheat we can supply," Meanser said.

"Due to strong economic growth and increased demand for premium-quality, wheat-based foods, China is expected to become an even more important market for western Canadian wheat," he added.

Measner said that within four years the organization will sell to China one-third of the nation's barley imports, around 10 percentage points higher than the current level.

In order to increase its sales and market share in China, the CWB and its largest trade partner in China, the China Cereals Oilseeds and Foodstuffs Corporation (COFCO), is planning to set up a training and technical centre in Beijing.

"It will allow us not only to show our products to our customers, but also to demonstrate how the wheat can be used most efficiently," he said.

Chinese users of CWB wheat and barley include Tsingtao Brewery Co Ltd and Yanjing Brewery.

Measner believed the centre, which is scheduled to open in April 2007, will support China's milling and food-processing industry.

Through training, educational seminars, technical exchanges and technical support, the centre will provide Chinese wheat processors with the information they need to make the most of this high-quality product, he said.

The CWB will provide initial funding of US$1 million to establish the centre. Operating costs will be shared between the CWB and COFCO.

2006-01-05T19:45:00.000-08:00

Sylvia Allen Returns From From China!

2005-12-10T22:02:00.000-08:00

Sylvia Allen, our Online China Expo Leader, is back from China!

Click below to listen what she has to say!

powered by Audioblog.com

Online Expo Assists In China Business Development

2005-12-04T07:49:00.000-08:00

The Online China Business Development Expo provides an opportunity for organizations to facilitate doing business in China. The program provides free education, networking, and Online communication technology. For details, click here!

The opportunities for doing business in China – as a buyer or a seller – are significant, but it is not easy and that the obstacles are great, particularly for small- and medium-sized enterprises.

The biggest challenge in starting business development in China is the amount of leadership time it takes, exploring and understanding the market, and starting to negotiate a way into the market.

It is particularly important to find the right consultants, develop strategic alliances, and, most of all, to use available Internet technology.

Free Online China Expo:

The Online China Business Development Expo will be held from February 8 – 10, 2006 with free educational events available weekly until the start of the Expo.

Participation is free for corporate managers, entrepreneurs, investors, etc., and registrants can attend from behind their computer, without leaving their office.

The following features are open now:

1). Free Educational Online Seminars.
2). Free Online Tradeshow.
3). Free Networking Opportunities.
4). Free China CyberCafe.
5). Giveaways, Door Prizes, Specials

How to participate:

Participation is free and one only needs a computer with Internet access and speakers turned on.

For details, For details, click here!

China to build up exhibition brands

2005-11-29T11:50:00.000-08:00

China will build up 100 exhibitions with international influence by the year of 2010. This is revealed at the 2nd China Convention and Exhibition Forum held yesterday.

At the forum, officials from the Ministry of Commerce said that China will establish a rating and authentication system for promoting the exhibition industry. In recent years, China's exhibition industry has been expanding rapidly. Now there are more than three thousand conventions and exhibitions of all kinds each year, with about 20 million participants. The total annual output value of the industry has reached 10 billion US dollars, accounting for 0.07 percent of China's total gross domestic product.

Sylvia Allen To Visit China With IFEA Delegation

2005-11-28T17:44:00.000-08:00

Sylvia Allen, CEO of Allen Consulting, will leave on November 25 for a visit to China with a delegation representing the International Festivals & Events Association.

Sylvia Allen is a nationally recognized author and sponsorship sales expert with high-visibility clients as the 2006 Iditarod Dog Sled Race in Alaska. She is an Adjunct Associate Professor of Marketing at New York University’s School of Continuing and Professional Studies.

Her marketing and public relations firm produced more than 100 events and raised more than $1 million worth of sponsorships for clients last year. She has just been appointed Conference Leader for the February 2006 Online China Business Development Expo. Allen is co-author of “How to Be Successful in Sponsorship Sales.”

Click below to hear about Ms. Allen's upcoming trip to China. More broadcasts to follow!

powered by Audioblog.com

Duluth native times his China book well

2005-11-20T16:27:00.000-08:00

BY JANE BRISSETT, NEWS TRIBUNE STAFF WRITER

The two hundred people who may return starry-eyed from Gov. Tim Pawlenty's trade mission to China on Saturday would do well to read a new book by a Duluth man before forging ahead.

James McGregor's book, "One Billion Customers: Lessons from the Front Lines of Doing Business in China," should make business people think seriously about a place where, as he writes, "foreign businesses are trapped between profits and politics."

It's an environment where corruption is rampant and personal relationships reign supreme, he wrote.

"It's going to take a generation or two to get things together," McGregor said in a phone interview from Beijing on Wednesday.

McGregor, 52, who lived in China for 15 years and moved back to his hometown of Duluth about three years ago, said he felt an obligation to write the book because of his background.

"Everybody is coming to China these days," he said. That includes President Bush, who will arrive there Saturday.

McGregor's book, released Oct. 11, is in its fourth U.S. printing. British and international paper- back editions also will be published.

Fred Hills, McGregor's editor at Simon & Schuster, expects it will soon be on the business best-seller list. McGregor said the book has been nominated for a Pulitzer Prize.

McGregor is a well-known figure in China, both in the expatriate community and among Chinese officials, said his friend Jim Friedlich, who worked with him for 10 years at Dow Jones & Co.

"He's just a big strapping guy from Duluth who is enormously comfortable in another culture," he said.

KNOWS THE SCENE

McGregor's sense of humor and Midwest openness have won the respect of the Chinese, said Friedlich, who described McGregor as an ambassador for China when he's in the United States and an ambassador for the United States when he's in China.

"Here's a guy who can really write well who knows the China scene," Hills said. "I can't think of anybody who has that combination of credentials."

The author has come a long way since he was kicked out of the former Cathedral High School, now the Marshall School, as a senior for "having too much fun," as he put it. He graduated from East High School in 1971.

McGregor is one of nine children of John and Sally McGregor, who owned McGregor's Drive-In Liquor Store, 624 E. Fourth St. Later, John became manager of Northland Country Club and a country club in Phoenix. Jim McGregor's grandfather, Louis McGregor, owned the McGregor-Soderstrom men's clothing store in Duluth.

His parents broadened their children's world when they took in 12-year-old Cuban refugee Armando Vega, said Jim's brother Doug McGregor.

"When other kids had sports posters on their walls, I had maps," Jim McGregor said. "I wanted to see the world."

After graduating, 17-year-old McGregor volunteered for Vietnam, serving in the Army infantry. He took shrapnel in his knee and won the Bronze Star, given for "heroic or meritorious achievement or service." He would not elaborate on how he won it, saying, "I wasn't a hero."

He returned home, earned a degree in journalism at the University of Minnesota, married Duluth native Cathy Grady and eventually became the Duluth News Tribune's Washington, D.C., correspondent in the 1980s.

His Vietnam experience sparked an interest in Asia. In 1985, he and his sister Lisa took a six-week backpacking trip across China without knowing a word of Chinese.

"I returned to the United States convinced that China's eventual emergence onto the world scene would be the economic event of my lifetime," he wrote.

In 1987, at age 33, he talked Cathy into selling everything, and they headed for Taiwan to learn Mandarin Chinese.

"He was one who always knew what he wanted to do and did it," Cathy said.

Soon after arriving in Taiwan, McGregor was hired as the Wall Street Journal's Taiwan bureau chief.

Three years later, he became Beijing bureau chief. It was shortly after the Tiananmen Massacre. The family, which by then included daughter Sally, lived in a diplomatic compound where their nanny spied on them and their phones were tapped, he said.

MELT THE ICE

To meet ordinary people, he rode his bicycle in the evening with his blond, curly-haired toddler. The Chinese were curious. Sally broke the ice and enabled Jim to talk with natives to learn their life stories, McGregor said.

In 1994, McGregor became the chief executive of Dow Jones in China. He built the company's presence from two people to a group of businesses that employed about 150. He also led the American Chamber of Commerce in China.

He left Dow Jones in 2000 to become a partner and China managing director for GIV Venture Partners, a venture capital fund, staying there for three years. Today he has a consulting business, Vermilion Ventures, and is a partner in BlackInc China, an Internet company.

He keeps an apartment in Bejing and spends a good deal of time there. But more than three years ago when he began work on the book, his family returned to Duluth. The McGregors wanted Sally, now 16, and their son, Grady, 13, to live like typical American kids. In China, they went to school with the children of diplomats and had a cook, a maid and a driver.

He's now on a yearlong worldwide book tour. He gets to Duluth as often as he can, though, and phones or e-mails home daily.

His future after the book tour remains uncertain.

"I would say that China's probably home for me," he said. He quickly added that he also needs to get away from the noise and pollution of Beijing from time to time to his childhood hometown of Duluth.

JANE BRISSETT can be reached weekdays at (218) 720-4161, (800) 456-8282 or by e-mail at jbrissett@duluthnews.com.

China seen as the hot place to be

2005-11-20T16:20:00.000-08:00

On Sundays, a wave of people -- excited families pushing baby strollers, grandparents, young executives -- with the luxury of time and money sweeps into the ancient Forbidden City to discover Chinese history.

They pose giddily for pictures in rented robes recalling the Ming Dynasty emperors and later snap up kitschy "Maomorabilia" to take home.

They jam nearby restaurants, enjoying mounds of pastel colored tapioca, steaming bowls of soup, custom made cream puffs, and yes, Kentucky Fried Chicken and Starbucks coffee.

And on Mondays, most of this vast army goes back to work: making money, making history and in many cases making the products that fill the all-consuming hunger of the American consumer.

With his six-day mission to China this past week, California Gov. Arnold Schwarzenegger highlighted what is already obvious to half the world: that whether they are part of the increasing hoard of young, up-and-coming business people or the millions of worker bees laboring in abject conditions for a pathetic daily wage, the Chinese people are at the center of what is fast becoming the business world's official "Place to Be."

This totalitarian nation is churning out the stuff of our capitalist dreams -- the luxurious lingerie, suits and evening gowns we wear, the components for iPods we listen to, the technology and cell phones we depend upon, the toys our children can't live without.

If the major cities in China -- Beijing, Shanghai and Hong Kong -- reverberate with a feeling today, it is this: People here are in a race to the top; and time is on their side.

Author Ted Fishman, who wrote, "China Inc.," a study of the new global market, said the sheer volume and clout of a nation with 1.3 billion workers, consumers and entrepreneurs made it nearly inevitable that China would seize -- in our lifetime -- America's long-held throne as the seat of innovation and entrepreneurial spirit.

"Certainly, if any country is going to supplant the United States in the world marketplace, China is it," Fishman writes. And, he noted, Columbia University economist Jeffrey Sachs "has already advised Americans to prepare for a world where by the year 2050, China's economy could well be 75 percent bigger than their own."

That is why, in China, sometimes the bar scene in "Star Wars" comes to mind -- as a mix of business people of varied cultures come to smoke, drink and deal in fancy hotel lobbies, creating the unmistakable sensation that this is the time, and place, to strike it rich.

"It's the Wild, Wild East," said Hal Josephson, who heads MediaSense, a Silicon Valley based consulting group that helps American firms navigate the complexities of business in China. "It feels like Silicon Valley in the '90s. ... China is the place to be."

Even the world-wise Schwarzenegger appeared stunned after striding through China's biggest steel plant in Shanghai. In his trips around that city -- where triple-decker thoroughfares and floating magnetic trains snake around a crop of futuristic skyscrapers -- he said he realized that while there were different governmental systems at work, California can take some lessons from the Chinese ability to get things done, and fast.

"It inspires me when you look around here," Schwarzenegger said, "because you see the freeways on the bottom, and you see the freeways on the top." But California, sometimes, is "still operating like in the '80s."

"By the time you get anything built in California, it will take years to get it finished," he said. "By that time, you have another 2 million people."

The hunger to do, to make, to make money, is evident everywhere in China's big cities. In the eye-opening elegance of the city's five-star hotels, lobbies are packed, morning to night, with clusters of mostly men in dark gray suits, talking earnestly about agreements, shipments, possibilities.

In the crowded restaurants, people are haggling over steamed spiny lobsters as big as Jack Russell terriers and making deals.

Even on the street in the jumble of markets stocked with knockoffs, scarves and silk pajamas, visitors get the rush of the wild ride of business negotiations. Sellers start with prices in the heavens, but with cajoling, humor and rapid-fire finger-work on calculators, usually end up accepting a fraction of that, and both sides come away happy.

Sometimes, the pace is so fast that even the locals wonder if it's all too much, and too soon.

"Some other country, like America ... everything is step by step," said film superstar and action hero Jackie Chan this past week. "But China, suddenly in 40 years: Boom! You can see people on bicycles with a cell phone. You can see people driving a Rolls-Royce with terrible shoes. They don't know how to match -- but they're rich. It's growing too fast."

Chan, who, with Schwarzenegger, filmed a public service announcement against video piracy, said that in business in general, and particularly in the film industry he knows best, his country would almost certainly surpass the United States' growth.

"We have 1.3 billion people ... it is a big market," he said. "The American box office, for the past nine months, going down, going down. Look at China box office: Always up ... and we open only in four, five cities is all."

No wonder the people who define culture, art and what's hip are flocking to China to do business. Fashion designers, whose industry has been long dominated by Paris and New York, are making flights to China's capitals, inspired by the brilliant colors, the ethnic costumes, the fresh "Shanghaise" silks and "Chinese fusion" styles.

"We're looking to start selling in China," said California-based couture designer Kevan Hall, whose elegant outfits are worn by stars such as Felicity Huffman of "Desperate Housewives."

These days, he added, "110 percent of the people who are buying luxury in the world are Chinese."

Internationally known designer Max Azria agrees the Chinese have shown "wonderful initiative ... a wonderful way to drive the business."

By the end of their six-day, three-city whirlwind trade mission with the governor, many of California's business people said they felt they were experiencing a unique place and time in business.

"There's a real excitement to it -- you feel energized," said Janet Lamkin, president and CEO of the California Bankers Association, representing 280 state banks that want to stake a claim to Chinese business. Standing at the elegant Shanghai Theatre, where the monied locals prepared to see the national film premiere of "Harry Potter and the Goblet of Fire," Lamkin said China was the definition of "a very innovative environment."

Terry MacRea, who heads the San Francisco-based Hornblower Yachts, said admiringly of the Chinese entrepreneurs: "I don't think it's a gene; I think it's a culture."

"There's 1.3 billion people here, and they have to hustle," he said. "They're hungrier."

Mike Faulkner, president of Nimbus Water, an Oceanside (San Diego County) firm selling its California Cool fruit-flavored carbonated drinks in Shanghai, said the sensation was sometimes overwhelming.

"It's like having kids," he laughs, throwing up his hands. "There's great excitement -- but it's also: 'Oh my God, I never thought of that.' "

Schwarzenegger, wrapping up his trip, said China's growth would sweep others along.

"They're so fast growing that they have to create 14 million jobs a year -- new jobs, 14 million!" he marveled. "And so they have to build and build and build. They're on automatic pilot. Where it's going to stop is really the question."

The governor said California businesses could gain a share of that growth if they moved aggressively.

"They need certain things we have to offer ... and I think the challenge is -- and the trick of it is for us -- is to ... be in their face and say, 'look, we have this for you ... we can help you with this, we can help you with that,' " Schwarzenegger said. "And then to sit down, and to follow up."

Wireless "World Phones" Now Enable You to Chat While Abroad

2005-11-18T16:35:00.000-08:00

(ARA) - For years, despite carrying a cell phone with them, Americans traveling abroad have been incommunicado. That's because when wireless technologies were being created, the United States used systems that were incompatible with those in the rest of the world, which opted for a single standard called GSM ("Global System for Mobiles").

Well good news. Times are changing. Now some wireless providers offer international service, all for the cost of a roaming charge.

"Companies such as Cingular Wireless offer customers international service on their own phones not only in Europe, but also in Asia, Africa, and South America -- almost the entire globe, even in Iraq and Afghanistan," says Mike Bennett, consumer and government affairs executive director of Cingular Wireless.

Today, more than a billion people use GSM phones, making it the dominant mobile phone system worldwide with about 70 percent of the market. "Fortunately, GSM phones are now widely available in the United States, and Cingular Wireless is the largest provider of GSM services in the nation," he adds.

If you have a GSM phone, activating international roaming service is as simple as contacting your provider. Your GSM phone (or Blackberry) assumes the characteristics of the wireless network in each country visited. So if someone is traveling in Italy the phone will work like a local Italian wireless device. Under Cingular's plan, customers roaming internationally are charged at the per-minute voice roaming rate without additional long distance charges.

Bennett says it is important to remember that just because a person has a GSM phone, there is no guarantee it will work abroad. "Travelers must remember to ask their carrier for a 'World Phone' that operates on the four major frequencies used by GSM carriers around the globe," he says.

Before GSM phones were available stateside, travelers from the United States had few options other than renting GSM phones while in Europe, which is expensive and inconvenient. "If your local carrier does not offer international service, you can always buy a cheap GSM world phone then buy pre-paid minutes, while out of the country," he explains.

Typically, this is cheaper than a week's rental of a GSM phone. At the end of your trip you can keep the phone for next time, recycle it or sell it.

To learn more about cell phone services online "Ask the Wireless Guru" at www.thewirelessguru.com.

Courtesy of ARA Content

Environmental companies seek new business on China mission

2005-11-18T14:20:00.001-08:00

by Lorna Benson, Minnesota Public Radio
November 17, 2005

The World Health Organization says seven of the 10 most polluted cities in the world are in China. And according to a Chinese government study, more than 100 million urban residents are exposed to air pollution levels that are considered very dangerous. China's environmental problems could be an opportunity for some Minnesota businesses. About a dozen companies participating in Gov. Pawlenty's China trade mission specialize in environmental cleanup. Please click to read full article!

Fluency on the Fly: Language Learning Tips for Business Travelers

2005-11-17T16:39:00.000-08:00

(ARA) - When foreign news correspondent Dr. Bob Arnot travels to the world's latest hot spot -- be it Iraq, Sudan, Afghanistan or the Congo -- he needs to learn the country's language, and fast. How does he do it? With the same innovative program used by the U.S. State Department, NASA and millions of individuals in countries around the world.

Dr. Arnot frequently traveled the world as a medical correspondent for NBC and became a foreign journalist after 9/11. Without the luxury of spending arduous hours on conventional language-learning techniques, he sought a faster, easier and more convenient way of learning new languages "on the fly." While on assignment in Iraq he discovered Rosetta Stone, an interactive CD-ROM language-learning program that replicates the way native speakers learn languages as children.

"I began using the Rosetta Stone Arabic program right there in Baghdad and was thrilled with the result," says Arnot. "Since then I've purchased half a dozen languages and am currently studying Pashto for an upcoming trip to Afghanistan." Dr. Arnot also appreciates the confidence gained from the one-on-one interaction and instant feedback he gets with Rosetta Stone programs.

While not everyone covers news in far-away countries, virtually all traveling professionals can benefit from speaking and truly interacting with local populations. Here are some tips for making that "leap to fluency" with a new language.

* Befriend a native speaker

While translators and tutors can be helpful, having a friend to engage in casual conversations can make the difference with an immediate, direct connection.

* Practice pronunciation

Few people learn to speak a new language through reading and memorization. Conversation requires mastery of the spoken language, including pronunciation. Rosetta Stone, using native speakers, develops natural, native pronunciation with immediate feedback every time you speak.

* Be fearless with opportunities to use what you know

The greatest obstacle to fluency is fear of making mistakes. But mistakes can be a great teacher, often allowing you to make a correction on the spot.

* Break study time into smaller chunks

Shorter, regular study periods yield greater results. Rosetta Stone, for example, offers language programs in progressive levels with incremental exercises that can be visited and revisited as busy schedules allow.

* Focus on your interests

Practice in settings and with topics that interest you. For example, rent a foreign movie to hear the sound of a new language.

* Maximize your language exposure

People fluent in more than one language will tell you that immersion is the key to success. By relying on sounds and images without English translation, Rosetta Stone's programs provide a truly immersive setting.

Sample lessons of Rosetta Stone are available online at www.RosettaStone.com/ind/free_demo and at retail kiosks located in select malls and airports throughout the United States. A complete list of specialty retail locations is posted on the company's Web site. To obtain more information or to purchase the program, call (800) 788-0822 or visit www.RosettaStone.com.

Courtesy of ARA Content

Members of Schwarzenegger's delegation paid thousands

2005-11-15T22:17:00.000-08:00

They are the chief executives of Fortune 500 companies, the leaders of big energy firms and major retailers - and they are farmers and folks who have created their own small family-run businesses.

And they have come a very long way as members of California Gov. Arnold Schwarzenegger's trade delegation for -- they hope -- a very big payoff.

That's why Californians like Mike Gallagher, founder and president of Napa-based City Pass -- a tourism venture that offers one-price tickets to major attractions in nine U.S. cities -- has brought his company's materials and plenty of business cards, and is literally running from seminars in hotel meeting rooms to meet-and-greet receptions to fancy dinners for the next five days in three Chinese cities.

For Gallagher, the $10,000 he paid to be part of the group being lead by Schwarzenegger is more than a bargain. It is a valuable ticket into the sometimes exotic, sometimes confusing universe of doing business in China, where vast consumer markets hold the promise of equally vast profits.

"You couldn't ask for a better representative,'' said Gallagher, as he waited to enter the American Chamber of Commerce luncheon Tuesday in Beijing's Grand Hyatt Hotel, where 250 Chinese and American business leaders gathered to hear the governor. "This is to dream for as far as the tourism business goes. Arnold knows how to promote - and this is 'California, the Movie.' ''

Gallagher is just one of a varied crew of 75 business executives who make up the California delegation traveling alongside Schwarzenegger - representing everything from big retail (Target) to beer (Miller Brewing), from agriculture (Sunkist) to education (University of California), from theme parks (Disney) to high tech (Qualcomm).

To tour China with Schwarzenegger is to be part of the exclusive gaggle gaining entrÃ©e into the country's most lavish venues - marbled hotels and trade centers, and normally inaccessible historic places such as the Great Hall of the People on Tiananmen Square, where President Richard Nixon and Mao Zedong held their historic toasts. There, seated in a cavernous hall dominated by an idyllic portrait of Mao leading his happy people, the delegates on Tuesday were hosted to a lavish seven-course banquet where, along with the dim sum, they were served rounds of endless speeches about the value of California-Chinese relations.

It's all part of the attraction, for the travelers, who paid their way for travel to Beijing, Shanghai and Hong Kong. And in many cases, the delegates also made generous donations to some of the governor's nonprofit committees, including the California State Protocol Foundation, which is helping to underwrite the travel of state officials, and the California Committee on Jobs and Economic Development.

Those donations were solicited by the nonprofit organizations "to limit the impact of state resources on these trips,'' said Schwarzenegger's press secretary Margita Thompson in Beijing. But she insists the fundraising is independent from the governor's office and "we do not know who the donors are.''

The arrangement has kicked up criticism from political opponents and watchdog groups in Sacramento.

"A junket to China in a private jet, with lavish hotel rooms and gifts for Schwarzenegger to the tune of tens of thousands of dollars, provided by undisclosed special interests, smells and borders on the corrupt,'' said California Democratic Party adviser Bob Mulholland.

It shows "Schwarzenegger already forget the lessons of the landslide (special) election against him,'' Mulholland said.

Schwarzenegger, however, in a series of speeches before the business community here Tuesday, was unapologetic about his efforts to help California business swell its bottom line in China.

"For me, it's music to my ears ... I love to see growth like this,'' he told the American Chamber of Commerce. "It also means more jobs and more opportunities for my state.''

Gallagher, whose 10-year-old firm employs a dozen people, came to sell his City Pass to the booming new market of Chinese tourists to the United States. Tourism is an $82.5 billion business for California, supporting 900,000 jobs and producing $5.2 billion in state and local revenues.

California -- with the biggest Chinese population in the country -- now attracts half of all the Chinese travel to the U.S., and as Chinese up their income and their business trade, there will be even more, officials said.

Gallagher is making his first trip to China, and an official mission like this one, he said, "is the only way a little guy can come here and have importance.'' That's because as a small family-founded business, he doesn't have at his disposal an expensive international law firm, a team of translators, a Chinese media relations firm or crowd of protocol and liaison experts to get him noticed -- or help his navigate the maze of Chinese government and business regulations.

In China, where business "involves a lot of relationship-building,'' the connection with California's famous governor is like gold, Gallagher said.

Already, he said, he has had a key lunch with tour wholesalers and travel agents in China and sat down for interviews with Chinese media outlets to explain his product in a new market - all arranged through the governor's office.

Even better: a key Chinese executive picked up Gallagher with a personal driver to have a face-to-face meeting and hear more.

That's why the trade mission is "good government at work,'' Gallagher said. "The governor is doing something for me that I could not possibly do on my own.''

But even executives of major firms, with bigger assets and armies of facilitators, say missions like these can be the glue for profitable deals.

"Doing business in China is a continuing process, and there's no easy success,'' said Brian Harris, vice president of AECOM Technology Corp., whose name stands for architectural, engineering and construction management - a huge need in the booming country.

The $2.4 billion firm based in Los Angeles employs 23,000 people, including 2,600 people in China. But it hasn't been easy to develop and grow business here, Harris said.

"It's hard work. ... The British government has been doing things with China for a very long time. Our British friends say the prime minister is their best salesman,'' he said. "And the French are flying (Chinese) people to Paris. We have to play it straight up ... and sometimes American businesses have been left behind.''

The Schwarzenegger connection "gives us a presence, allows us to separate ourselves, and elevates us'' with the Chinese, among whom such connections hold great importance, explained AECOM vice chair Raymond Holdsworth. "It brings us to a different level; when you say you're part of the governor's trade mission, the doors open,'' he said.

Schwarzenegger's office has offered extra help, he said. The governor's office "wrote on our behalf to the mayor of Shanghai,'' where a building frenzy has created scores of opportunities, Harris said. And after the trade mission, "they've asked for a list of all the private meetings we've held ... and the governor has offered to do a follow-up private letter.''

Mark Golden, an executive with Umina, a Los Angeles based wholesaler of avocados, citrus and grapes, said the governor "is opening doors for us, and we have to be smart enough to put our foot in.''

Golden's firm, with 100 employees and $100 million in sales annually - 30 percent of it in exports - hopes to tap a seemingly endless consumer market with a hunger for produce.

"He's the Terminator, and other governors wouldn't have this opportunity,'' he said. "But if somebody's thinking that the governor is going to do business for you, he's foolish,'' Golden said.

The irresistible pull of pure mass

2005-11-15T13:41:00.000-08:00

The irresistible pull of pure mass

In October, China Construction Bank raised $8 billion on the Hong Kong Stock Exchange in the world's biggest initial public offering in four years.

Institutional demand for the offering, the first by one of China's big four state banks, outstripped supply by 10 times, despite a price at the top of the indicated range, and shares reserved for retail investors were 42 times oversubscribed.

The sale set a total market value of close to $70 billion on China's third-largest lender, making it the most valuable bank in Asia outside Japan.

Not bad for a bank that had to replace its chairman, Zhang Enzhao, in March when he was placed under investigation and house arrest for alleged bribery offenses, and that reported in its offer documents more than 100 criminal acts by employees in the previous 18 months, involving no less than $60 million.

Not bad, too, for a bank that three years ago had a nonperforming loan ratio of 17 percent, now reduced by government bailouts to 3.9 percent, compared with typical ratios of around 2 percent for U.S. banks.

Still, the volume of subscriptions came as no surprise. In the past two years, foreign investors have thrown more than $17 billion at China's ailing banks.

China veterans are hard pressed to explain why so many investors are ready to ignore widely published stories of past business failures in China.

Frank Hawke, a U.S. businessman who has worked in China for 25 years, says investors in the past two decades have often been blinded to danger by the sheer scale of opportunity.

"All the information required to avoid the mistakes they made was available on the ground at the time," Hawke said.

"It's the size of the market. China is bigger than life."

Another longtime American businessman in China, who asked not to be identified for fear of damaging his business contacts, recounted the history of an investment manager who had lost money for close to a decade.

"He had the money and pressure to do something with it, and that's a recipe for disaster," he said.

People "are mesmerized by China," said Tim Clissold, the author of "Mr. China," a book that chronicled his own experience of working in China as the president of Asimco, a Wall Street private equity group that in its early years lost more than $400 million, much of it to unscrupulous business partners.

China business hands also speak of the problem of visiting chief executives who get caught up in the excitement of investing in China.

"You get ushered into the Great Hall of the People, and all of a sudden you have to be Henry Kissinger," Hawke said. "All of a sudden you get stars in your eyes and start saying stupid things."

Chief executives, Hawke said, "fly at 30,000 feet," shaking hands with mayors, provincial governors and vice prime ministers; being wined and dined; and then heading home, leaving their subalterns on the ground to clean up the mess.

But have business practices not changed at all in China?

"I think that the Chinese have changed, but I don't think that foreigners have," said Clissold, who now helps bring Western companies to China. "The fundamental problem is that people get overexcited about China. They're still after the China dream - this hasn't changed."

Clissold describes what he calls "a wild charge into the banking sector" in China. "There are serious governance problems in the banks, and the central government is quite open about it," he said.

A "herd instinct" seems to overtake foreign executives in China, he said.

"There should be someone back in the home office who's looking at the fundamentals and who's asking 'What are we doing there?"' Clissold added.

On the other hand, he said, Chinese business attitudes have certainly changed. Access to funding has become easier, and business leaders have become more sophisticated, making them less likely to take a short-term view.

"In the 1990s, I'd arrive in a small village with $50 million, and people wanted to grab it because they thought they'd never get a chance like this again," he said.

"Today, they see the benefit of longer-term cooperation and so are inclined to play by the rules. There's been a change in attitudes."

James McGregor, a writer and businessman with 15 years' experience in China, said people who "come in smart" to China find it easier now to do business there.

"The business environment is improving in China, but if you come in and do dumb things, you're going to run into the same problems," he said. "Chinese will take advantage of a starry-eyed foreigner who is infatuated with China."

One positive development is that foreign companies no longer have to go into joint ventures with state-owned enterprises, known as SOEs - ventures that are often fraught with problems.

"In dealing with a SOE, your goals are never going to be the same, and you're eventually going to have problems," Hawke said. "That's why people today are doing wofies," he said, using a local term for wholly foreign-owned ventures.

McGregor agreed. "Stay away from the government," he said. "They don't have the same motivations that you do," and if you do go with an SOE, be ready for adventure."

But despite the headaches involved in doing business, the veterans are not turning their backs on China.

"I would not discourage anyone, but I'd admonish them to be careful," Hawke said.

"I don't want to sound unduly pessimistic, but people have to be very careful and should use the same business sense they would use anywhere else. Still run the numbers, get the info, understand the environment, do all the background work you can do."

McGregor, who is still doing business in China, offers potential investors this advice: "Come in small and get yourself a base, and try a few things and see what works.

"If you come in and try to do things overnight, you might as well give your money to charity."