Knowing Asian Business Culture

When conducting business with Aisan, it is important to be aware of significant cultural features. Apart from having a general understanding of the historical and cultural background of the country you are dealing with, the more commonplace business culture in Asian countries includes toasting at banquets, handclasp, swapping cards and after-dinner activities such as singing at Karaoke clubs.

Asian negotiators have a reputation for being forceful, determined, and willing to take advantage of any weakness or opening. In order to negotiate successfully in Asia, Western companies should be sensitive to morals, behavior patterns and psychology, as well as business matters. The following is a list of points that companies doing business in Asia should consider, and tactics they should expect to come across during negotiations:

• Asian businesspeople will react unfavorably to a person they consider to be ill mannered, inconsiderate or conceited and welcome someone who is honest, courteous and determined in approach.
• Asian cultures place an emphasis on establishing a relationship, and so will focus on learning about your company before concentrating on the agreement.
• Avoid embarrassing people and causing them to lose face in the presence of others. If possible, criticize in private, or even better, use an intermediary to convey.
• Conduct a feasibility study on the Asian company prior to your first meeting. Research current economic conditions and government policies as thoroughly as you can.
• Eating and drinking play a key role in business in Asia, and it is often during dinner that the most important business relationships develop.
• Gift giving is normal Asian business practice and only small gifts are necessary (e.g. bottle of alcohol, carton of cigarettes etc.). Lavish gifts may indicate that a special favor is expected in return, so beware.
• Good preparation is essential in order to achieve an acceptable result. Expect your opposition to know your company, your products and the industry and to ask penetrating questions.
• In most negotiating sessions, businesspeople will speak both their native language and English. Western negotiators should therefore have available a native speaker on their team.
• Negotiations really only begin as the venture progresses, and the real substance of the relationship develops as the two parties negotiate issues and events, which arise on a daily basis. For substantial investments, on-the-ground representation is particularly crucial to success.

Wheel of fortune for China's amusement parks - report from the China

There was an international, carnival atmosphere at the 15th edition of the China Amusement Machines and Facilities Exhibition 2007. Tens of thousands of visitors from throughout China, the Asian region and other foreign countries gathered in Beijing. Organised by the China Association of Amusement Parks and Attractions (CAAPA), the show for the amusement park trade saw delegates gathering from Japan, Canada, Russia, Spain, South Africa, Cuba, South Korea, Yemen, Singapore, Israel and Taiwan.

Since 2002, CAAPA has organised seven large-scale exhibitions in Beijing and Shanghai, aimed at promoting development and providing a platform to foster cooperation between the operators of amusement parks and manufacturers of equipment.

CAAPA president Liu Jingwang said the amusement equipment industry has become mature in China. Specialised exhibitions like the recent Beijing show provide an opportunity for technology exchange between domestic and overseas industry players, which in turn helps promote the development of the industry.

The scale of the exhibitions has been increasing every year. In particular, some of the technical and design hurdles have been overcome through acquisition of technology patents and joint investment in factories. As a result, some exhibits have achieved international standards in terms of technology.

For instance, the "Nanchang Star" giant ferris wheel, produced by Shanghai Amusement Machine Engineering Co Ltd, is the largest in the country.

Tailong Amusement Company of Chengdu offered a package price of Rmb10 million for its "flood burst", "water and fire fountain" and 3-metre wave generation system. The technology content of Tailong's products has reached international standard. The company commands a significant market share both at home and abroad.

Amusement equipment industry expands rapidly

Rides have to appeal to the kids.

In the early 1980s, Beijing's Zhongshan Park took the lead by importing Japanese-made amusement equipment. One "ride" simulated a rocket's journey to the moon, making the park among the first in China to import such a contraption from overseas.

Subsequently, Mainland factories began to produce their own adaptations based on imported models. Different kinds of amusement equipment were installed at large and small parks across the country. But in general, their designs were rather crude and technology content was low.

Over the past 20 years, Chinese manufacturers have gone through the stages of importation, assimilation and independent innovation. Today, the Chinese mainland's amusement equipment industry meets international standards and is a competitive market player.

According to Mainland statistics, more than 450 large- and medium-sized amusement parks are operating in China with a total annual turnover of over Rmb5 billion. The overall output value of the industry exceeds Rmb8 billion a year, underpinning the momentum of its continued healthy development.

An Rmb 5 billion market.

Meanwhile, the number of amusement equipment manufacturers has increased to 239. They supply Rmb5 billion worth of equipment to amusement parks across the Mainland a year and their exports to overseas markets are valued at over US$300 million.

Amusement industry sees new opportunities

As the Mainland economy continues to grow rapidly and people have more leisure time, new opportunities are emerging in the amusement industry: demand for amusement park equipment is rising, according to trade analysts.

One section of a mega roller coaster.

To attract customers, some theme parks are investing in large-scale equipment. Some manufacturers are understood to have received orders well into 2010. According to an official at the Shijingshan Park in Beijing, the management invested Rmb10 million in adding a roller coaster in the park in 2005, establishing the longest ride of its kind on the Mainland. The investment was recouped within two years. The ride continues to yield excellent returns today.

The rapid expansion of the amusement industry has also spurred the growth of innovative enterprises in product design, manufacturing and development. These enterprises churn out new, attractive models continuously. In 2006, 17 projects developed by seven amusement equipment manufacturing enterprises received outstanding product awards from CAAPA.

The awardees included several innovative rides, including the "flood burst", "water and fire fountain" and high-power wave generation system from Chengdu's Tailong. Various rides produced by Beijing Shibaolai Amusement Equipment Co Ltd including "rapids ride", "rugby", "Apollo spaceship", "whirlwind chairs", "super fighter", "parachuting tower", "crazy train" and "bungy jump".

Product displays were hugely varied.

Laser gun game.

160-metre high giant ferris wheel.

The "super wave" and 160-metre giant ferris wheel produced by Shanghai Amusement Machine Engineering Co Ltd won an award, while the "60-seat pirate ship" by Xian Tongle Industry & Trade Co Ltd was also on the list.

A "smart card" amusement park management system provided by Shiyu Group of Zhongshan was an awardee, as was the large-scale inflatable amusement and sports facilities from Beijing Airhouse Membranous Product Engineering Company.

Both the ferris wheel from Shenyang Songling Entertainment Equipment Engineering Co Ltd; and the mega "4D Flight" project jointly developed by Huaqiang Intelligent Technology of Shenzhen and Shijingshan Amusement Park made up the remainder of the award list.

Partnering with overseas firms

Large numbers of international suppliers of entertainment facilities expressed interest in the Mainland market during the exhibition. As the representative of global entertainment equipment supplier Intamin pointed out, theme parks are very profitable in China.

According to a market survey conducted by the International Association of Amusement Parks and Attractions (IAAPA), theme parks and leisure and entertainment facilities are expected to provide excellent growth prospects in the coming five years. A report from PriceWaterhouseCoopers also forecasts that tax revenues from theme parks in China will grow by 7.1% a year to top US$1.8 billion by 2010.

Despite the rosy picture of new generation theme parks painted by various parties, CAAPA president Liu Jingwang pointed out that some of the existing theme parks and amusement parks are operating in the red due to poor management.

In many of these cases, the major causes of failure are outright copying of other theme parks overseas, a lack of character, and mismanagement.

Regular updates on rides a must.

Liu cautioned would-be investors that the local consumer environment and individual purchasing power must be assessed thoroughly, while the theme parks must have unique characteristics. More importantly, new management models must be introduced and new rides have to be added from time to time to sustain their attractiveness to customers.

Liu added that many countries and regions such as Japan, the US and Hong Kong have much to share about management and operations. He said Hong Kong's Ocean Park and Disneyland both have state-of-the-art equipment and first-rate managements. He reckoned Hong Kong companies entering the Mainland market have an edge in overall management know-how, technology importation, and service enhancement.

Apart from a lack of experience, Mainland amusement parks are facing equipment shortages due to production capacity limitations.

Many of the sought-after quality products are in short supply while existing equipment is ageing and in urgent need of quality upgrade.

New generation amusement equipment.

Moreover, the technology content of amusement machines should also be increased. The development of many enterprises is hampered by factors such as limited scale of operation, capital and technology talent. This is another area where foreign firms enjoy an advantage.

China suspends some U.S. pork, chicken feet imports

BEIJING (Reuters) - China's quarantine bureau has suspended imports of frozen chicken and pork parts from top U.S. meat and poultry processors, even as international scrutiny of Chinese food and drug safety grows.

Salmonella was found in frozen chicken meat from Tyson Foods , the largest U.S. meat processor, while frozen chicken feet shipped by Sanderson Farms had residues of growth enhancers and anti-parasite drugs, the General Administration of Quality Supervision, Inspection and Quarantine said.

Imports of frozen pork ribs from Cargill Meat Solutions Corp., a unit of agri-business giant Cargill Inc., have been suspended for 45 days from July 7, said the notice, posted on its website (www.aqsiq.gov.cn) on Friday.

"We were surprised to see our name on the list," said Winnie Fang, China regional manager for AJC International Inc., which distributes pork products from Tyson in China. Its frozen pork shipments were also suspended.

"It's a case of different standards in the U.S. and China" in application of growth hormones, she said.

U.S. poultry and meat processors ship great quantities of chicken feet and other parts spurned by U.S. consumers to China, where they are a delicacy.

A chemical ingredient in pet food that caused the death of animals in the United States earlier this year has triggered concern over the safety of food and drug exports from China.

Mislabeled chemicals from China caused the death of patients in Panama, while a number of countries have taken Chinese-made toothpaste off shelves. Exports of items from tires to toys have be given greater scrutiny.

Last month, the U.S. Food and Drug Administration announced a temporary hold on imports of some Chinese seafood until suppliers could prove they were free of harmful residues.

SAFETY

Poorly regulated food and drug safety standards have been a problem for years in China, which has about half a million food processors. The Chinese government has moved in recent weeks to respond to the problem, promising stricter oversight.

But Li Yuanping, director general of the quarantine administration's import and export food safety bureau, defended the quality of Chinese food exports, saying "99 percent or more" passed muster.

The quarantine bureau also published a list of 42 Chinese firms whose products would not be allowed to be exported to Japan, the United States, South Korea, Canada, Hong Kong or southeast Asia.

This week, China executed the former head of its Food and Drug Administration for corruptly approving unsafe drugs.

But the quarantine bureau also ordered greater scrutiny of U.S. imports late last month, raising suspicions of trade retaliation.

The import suspensions come as U.S. hog futures rose on speculation that China would need to import more pork to offset a domestic shortage caused by widespread outbreaks of blue ear disease in pigs.

Tyson and pork producer Smithfield Foods Inc. said on Friday that Chinese buyers had shown interest in buying more pork.

Cargill officials in China couldn't be immediately reached for comment, while there was no answer at Tyson's Shanghai office or on Sanderson Farms' consumer hotline.

Also suspended were salted pig innards from Triumph Foods, frozen chicken feet from Intervision Foods and frozen pig ears from Van Luin Foods USA, a unit of Van Luin Food Group of the Netherlands.

Experts Foresee Mounting Trade Tension Between US, China

Amid official data showing record rises in its foreign currency reserves and trade surplus, Washington-based experts are predicting rising trade tension between the U.S. and China.

China trade specialist William Reinsch told a Washington forum Wednesday that U.S. Congress is considering five separate measures aimed at forcing China to speed up the revaluation of its currency.

Reinsch declined to predict whether any of the measures will be approved. But he suggested that none would likely be effective in forcing the pace of revaluation. Reinsch said a more effective means of reducing the trade imbalance would be for American consumers to focus on the weak health and safety standards of Chinese goods.

"If the American consumer decides, for whatever reason, that Chinese products are unhealthy, unsafe or ungreen-depending on your criteria, and stops buying them, or starts asking his retailer, 'I want the one made in Bangla Desh, or I want the one made here, any where other than there (China),' they (the Chinese) have a much bigger problem than anything that is going to come out of the Congress," he said.

Evidence of unsafe or contaminated Chinese products from dog food to seafood to toothpaste to (automotive) tires have recently filled newspaper headline in the U.S.

Brookings Institution economist Jeffrey Bader believes that structural issues are more to blame than a weak currency for the trade imbalance. China's overall trade surplus rose by 84 percent during the past six months. Bader, a former U.S. trade negotiator, says the composition of Chinese exports have shifted over the past decade as other Asian nations sent semi-finished goods to low-cost China for final assembly and export.

"We've had the development of an integrated East Asian regional economy centered in China and with China as the final assembly point for many products," he said.

Bader said China has advanced to the point where it is now the largest Asian supplier of computers and computer components to the U.S. Those exports are up two thousand percent in the past five years as high tech goods that used to move directly from Southeast Asia to the U.S. now go to China for final assembly.

VOA News

Small Business Owners Look into China Market

Question: I have an idea that I would like to try and sell in China. I am a small business -- one man, one computer, one office. Do you think there is a chance for a one-man operation to succeed in the China market?

-- R.B., Fairport, N.Y.

Answer: China's 2001 entry into the World Trade Organization and its economic boom of recent years have made it somewhat easier for small U.S. enterprises to break into the market. But there are still many stumbling blocks that pose big, costly risks for businesses -- especially for a one-person operation with little or no experience dealing in China.

The regulations required for foreign businesses setting up an operation in China have been relaxed, yet many U.S. entrepreneurs still encounter ample red tape and inconsistent messages.

And there are many competitive hurdles once you're in business. China's consumers love big brands, so small companies often don't have the financial resources necessary to market themselves well enough to compete, says Siva Yam, president of the U.S.-China Chamber of Commerce, a Chicago-based organization that helps businesses navigate China.

What's more, intellectual-property rights are tremendously difficult to enforce unless you have proprietary technology, Mr. Yam says. Rivals in China are quick to produce knockoffs of any potentially lucrative product they see.

You'll probably need to spend a lot of time on the ground in China, building relationships and getting to know the market. The best strategy for a very small business is to find a joint-venture partner, a Chinese company with ties in the market.

"You need somebody who knows the market and can get through all the regulatory hurdles and have the resources to tap into the local market," Mr. Yam says. But you need to do enough due diligence to make sure you're finding a trustworthy partner with a good reputation who can promote your product, he adds.

Another possibility: Hook up with a large U.S. company with whom you could try to license your product. That way you don't have to worry about navigating China on your own.

There are numerous China business and legal consultants both in the U.S. and in China that sell their services to U.S. entrepreneurs.

By KELLY SPORS
Staff Reporter of The Wall Street Journal

New Chinese Consul General is MWCA's Guest of Honor at Reception July 19

MWCA is very pleased to announce that the new Chinese Consul General in Chicago, Huang Ping, will be our guest of honor at our reception following our Summer Quarterly Meeting on Thursday, July 19. The new Consul for Economic and Commercial Affairs, Chen Guowen, will also attend.

The reception will be hosted by the Chicago Mercantile Exchange, in the Executive Conference Center on the mezzanine level. The CME is located at 20 S. Wacker Drive, Chicago. For details, contact us.

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Meeting with CMB Executives

Brian Su, President of Artisan Business Group, held a meeting with Mr. Bill Hurley, Executive Director, CMB Export LLC in Moline, Illinois. CMB Export LLC is a federally-designated Regional Center for an EB-5 investment project in California. The firm is interested in seeking ABG's assistance in creating marketing strategies for entering the Greater China Region. For details, contact http://www.MidwestUSAChina.com

Seeking Sister City in the US

A Chinese city is actively seeking a sister city in the US. Interested party shall contact us at info@MidwestUSAChina.com for details.

ABG Helps EB-5 Investment Project in South Dakota

Artisan Business Group in Springfield, IL, has entered an agreement with Hanul Professional Law Corporation, an immigration law firm in Los Angeles, California. Artisan has acquired rights to recruit Chinese investors to participate as limited partners in EB-5 Meat Processing Plant for Northern Beef Packers Limited Partnership in South Dakota. For details about the project, please contact us at info@ArtisanBusinessGroup.com.

Phosphoric Acid Exporter Seeking Buyers

A Chinese export firm is seeking US buyers for its product: Phosphoric Acid (Food Grade). The firm can steadily supply 3,000 m/ts per months. The specification for phosphoric acid is as below

h3po4 >85%

so4 <50ppm

fe <10ppm

f <20ppm

ci <2ppm

As <2ppm

heavy met5als as pb <10ppm

color <20apha

For the container shipments , the Chinese shipping port is Guanzhou Huangpu and other ways is in Guanxi Beihai. Contact info@MidwestUSAChina.com for details.

China offers Proposal to Area Companies

The American Merchandise Center (AMC) in Yiwu, China is opening for business in October 2007. The venue is set up to encourage U.S. export to China and to reduce the U.S. trade deficits with the People's Republic of China.

AMC covers more than 120,000 square feet. It is operated by a Schaumburg, Illinois based management firm. It gives U.S. companies a direct channel to sell and a constant exposure to new buyers from China and around the world. The Center is located on the 5th floor of the already bustling International Trade Mart in the booming, world-class city of Yiwu, China.

The first of its kind in China, AMC is based on the American concept of a merchandise mart, providing a permanent center for companies to display and sell their products in an international market.

AMC provides U.S. companies with unparalleled convenience to export to China, we are here to see U.S. companies to go out and take full advantage of the historic opportunity and thrive in the China markets. For information, log on http://www.MidwestUSAChina.com