Mr. Brian Su, President of Artisan Business Group, is scheduled to speak at the following events. If your organization is interested in a China-related topic at your conference,board meeting,or social event, please contact our China Speaker Bureau.
"China Business Masterclass 2008" 2-day Executive Course - Australia 3-City Tours, July 6-16, 2008
"China Briefing" with the Board of Directors of Illinois Soybean Association, August 12,2008
"A Road Map for Exporting to China" Seminars at the 28th Annual Conference of the Association of Small Business Development Centers, Chicago, Sept. 2-3, 2008
"Profitable and Effective Sourcing from China" 2-day Executive Course - Australia 2-City Tours, Sept. 13-20, 2008
"Attracting Asian Investors to EB5 Projects" Seminar, Florida, Sept. 25, 2008
For details, log on http://www.midwestUSAChina.com/speaker.htm
Wednesday, April 30, 2008
Tuesday, April 29, 2008
Indiana Lieutenant Governor welcomed Taiwan food buyers delegation, praising state partnership with Taiwan
The second Taiwan Food Buyers Delegation to Indiana was warmly welcomed in Indianapolis by Lieutenant Governor Becky Skillman on April 29, 2008. Accompanied by Commercial Division Director Paul C. F. Wang and other officials of the Taipei Economic and Cultural Office in Chicago, the delegation traveled in the state after attending the Global Food and Style Expo 2008 in Chicago on April 26-28.
At a meeting held with the delegation early on April 29, Lieutenant Governor Skillman spoke about the importance of international trade to Indiana’s agricultural economy. “We saw the direct results of our efforts to build ties with exporters,” she said, referring to the Indiana food and agricultural trade mission that she led to Taiwan in the fall of 2006. “Indiana products were for sale on the shelves of Taiwanese shops. Our industries have clearly benefited from the partnership Indiana enjoys with Taiwan,” she noted. Also attending the meeting were Agriculture Department Director Andy Miller and International Development Office Director Steve Akard of the Indiana Economic Development Corporation.
Immediately following the meeting, Agricultural Trade Office Director Keith Schneller of the American Institute in Taiwan (AIT) gave a market overview of food and agricultural opportunities in Taiwan for Indiana businesses. The delegation then held informal business meetings with several Indiana food and agribusiness concerns, including specialty grain producers and wineries.
Afterward, the delegation traveled to West Lafayette for a tour of the Purdue University Food Science Laboratory. Delegation members visited Fair Oaks Farms dairy on April 28, and the Caito Food Service on April 30.
In the summer of 2005, Indiana Governor Mitchell Daniels led his first Asian trade mission as governor, making stops in Taiwan and Japan. Later that year and in 2006, Taiwan organized food buyers and agricultural missions to visit Indiana. During the 2006 visit, the food buyers delegation struck a deal to purchase locally produced wine for export, directly benefiting the Indiana wine industry.
Taiwan ranks as the world’s sixth-largest market for US agricultural and food products and is second only to Canada in terms of per-capita consumption of US produce. Indiana’s exports to Taiwan reached US$116.993 million in 2007, an increase of 10.9 percent compared over the previous year. Taiwan is Indiana’s 25th largest export market worldwide. Indiana’s annual exports to Taiwan have accounted for about 0.5 percent of all US exports to Taiwan each year since 2003.
Contact: http://www.midwestUSAChina.com
At a meeting held with the delegation early on April 29, Lieutenant Governor Skillman spoke about the importance of international trade to Indiana’s agricultural economy. “We saw the direct results of our efforts to build ties with exporters,” she said, referring to the Indiana food and agricultural trade mission that she led to Taiwan in the fall of 2006. “Indiana products were for sale on the shelves of Taiwanese shops. Our industries have clearly benefited from the partnership Indiana enjoys with Taiwan,” she noted. Also attending the meeting were Agriculture Department Director Andy Miller and International Development Office Director Steve Akard of the Indiana Economic Development Corporation.
Immediately following the meeting, Agricultural Trade Office Director Keith Schneller of the American Institute in Taiwan (AIT) gave a market overview of food and agricultural opportunities in Taiwan for Indiana businesses. The delegation then held informal business meetings with several Indiana food and agribusiness concerns, including specialty grain producers and wineries.
Afterward, the delegation traveled to West Lafayette for a tour of the Purdue University Food Science Laboratory. Delegation members visited Fair Oaks Farms dairy on April 28, and the Caito Food Service on April 30.
In the summer of 2005, Indiana Governor Mitchell Daniels led his first Asian trade mission as governor, making stops in Taiwan and Japan. Later that year and in 2006, Taiwan organized food buyers and agricultural missions to visit Indiana. During the 2006 visit, the food buyers delegation struck a deal to purchase locally produced wine for export, directly benefiting the Indiana wine industry.
Taiwan ranks as the world’s sixth-largest market for US agricultural and food products and is second only to Canada in terms of per-capita consumption of US produce. Indiana’s exports to Taiwan reached US$116.993 million in 2007, an increase of 10.9 percent compared over the previous year. Taiwan is Indiana’s 25th largest export market worldwide. Indiana’s annual exports to Taiwan have accounted for about 0.5 percent of all US exports to Taiwan each year since 2003.
Contact: http://www.midwestUSAChina.com
Monday, April 28, 2008
China Imposes New Visa Rules
The Chinese Government has imposed more stringent requirements for visa application because of the Beijing Olympics.
Both business travelers and tourists to China are required to submit their confirmed flight itinerary and hotel reservation. Those on business trips must also submit invitations from the Foreign Economic Relation and Trade Commission in China.
A company letter stating the applicant's particulars, purpose and duration of visit is also needed, together with an undertaking that the firm is responsible for the traveler while in China.
Other documents needed for the visa application are the passport, valid for at least six months and with sufficient pages, a recent passport size photograph and the completed application form. For details, contact us at http://www.midwestUSAChina.com
Both business travelers and tourists to China are required to submit their confirmed flight itinerary and hotel reservation. Those on business trips must also submit invitations from the Foreign Economic Relation and Trade Commission in China.
A company letter stating the applicant's particulars, purpose and duration of visit is also needed, together with an undertaking that the firm is responsible for the traveler while in China.
Other documents needed for the visa application are the passport, valid for at least six months and with sufficient pages, a recent passport size photograph and the completed application form. For details, contact us at http://www.midwestUSAChina.com
Sunday, April 27, 2008
4 Reasons Sourcing from China will be More Expensive in 2008
January 21st, 2008 by China Business Success Stories
China has been trying to stem an ever growing trade surplus, manage domestic inflation, move development from the coastal areas to the inland areas and decrease its dependence on heavily polluting industries.
Because of these objectives, manufacturing in China is becoming more expensive as China adds in hidden (and sometimes not so hidden) costs into the sourcing equation.
Here are the top 4 reasons you can expect costs to continue to rise in 2008:
1. Reduced VAT Refund
When Chinese manufacturers purchase goods domestically for use in manufacturing, they pay a VAT (value added tax). For people in the United States or others who are not familiar with the term VAT, it’s essentially a sales tax. Historically, the Chinese government allowed for generous VAT refunds if the final manufactured product is for export. However, as of July 1, 2007, China has changed its refund formula. Many products have had their VAT refunds completely eliminated and many others have been reduced. Since Chinese factories typically take these VAT rebates into account when calculating profit margins, the reduction or elimination of them is likely to… raise prices (or drastically shrink profit margins).
2. RMB Currency Appreciation vs USD
Until mid-2005, China maintained a peg on the RMB to the USD at 8.27. This provided an element of stability and took the currency risk out of the sourcing equation. However, over the past year and a half, China has begun appreciating the RMB against the dollar. As of this blog article, the current conversion is 7.26. Furthermore, many experts are estimating the rate to dip well into the 6’s over the next year.
Here is a chart from Yahoo Finance showing the USD vs. RMB trend:
Chart Yahoo Finance USD vs RMB
While nobody knows for sure what the ‘final’ trading range will be, there are a few interesting commentaries out there. This article from Bloomberg quotes Jim Rogers, chairman of Beeland Interests Inc. and a former partner of George Soros, saying the RMB may quadruple in the next decade.
“The currency has advanced 10.5 percent since the government scrapped a peg to the dollar in July 2005, gains that U.S. officials say are insufficient to reduce a trade surplus that swelled to $23.9 billion in September. Jim Rogers, chairman of Beeland Interests Inc. and a former partner of George Soros, said yesterday the yuan may quadruple in the next decade.
The yuan is “the best currency to buy right now,” Rogers told investors in Amsterdam, adding that he is shifting all his assets out of the dollar and into yuan. China is “going to be the most important country in the 21st century.”
The currency climbed 0.16 percent to 7.4926 per dollar as of the 5:30 p.m. close in Shanghai, according to data compiled by Bloomberg. Non-deliverable forward contracts show traders are betting the yuan will reach 7.0070 in 12 months, a gain of 6.9 percent from the spot rate, and 6.95 by the end of 2008.”
On a side note, if you’re importing to Europe, the Euro has actually been appreciating against the RMB, so for now you guys are ok! Check out a recent Yahoo Finance chart showing the Euro vs RMB trend.
Yahoo Finance Chart Euro vs RMB
3. Increased Costs Associated with Importing Raw Materials
China said on July 23rd, 2007 that it would begin requiring that exporters put down a deposit for half the amount they spend importing 1,853 raw materials. A quote from this People’s Daily article summarizes the policy.
“Enterprises which are engaged in the production of these products are required to have guarantee deposits in the Bank of China, the designated bank of China Customs, for a contracted period of time, according to the statement jointly released by the Ministry of Commerce (MOC) and China Customs.
If these enterprises fail to sell their products within the time scale dictated by the contracts, the customs will ask the bank to keep their deposits and interest for taxation.
“We are striving to improve the development of China’s processing trade in a bid to promote trade balance and reduce trade surplus,” said Wei Jianguo, vice minister of commerce.”
These new regulations will require a larger cash outlay for large contracts by Chinese factories. Therefore, it’s more likely that they will need to borrow money to meet this requirement. Borrowing money costs money and that cost is likely to be passed along.
4. Labor Costs Continue to Rise
Labor, once assumed to be endless in China, has been ‘drying up’ for a number of years now. China’s factories depend on a constant supply of new migrant laborers coming from the countryside. Typically every Chinese New Year, as many people return to their home town as can afford to do so. And each year, some old and many new laborers come to the cities in search of work after the holidays.
However, as villages have become more prosperous, with more family members making and sending money back home, this endless supply of new labor, has began to shrink. Because of this and other factors, labor costs continue to rise. China’s National Bureau of Statistics reported that in the first half of 2007 wages were up 18.5% compared to the year earlier period alone!
In addition, China as of January 1, 2008 enacted new labor laws that allow for much more worker protection, but of course at a cost. Global Labor Strategies has an article with many links to other blogs and newspaper articles discussing the reaction worldwide to the new law.
source from: http://www.chinasuccessstories.com/
China has been trying to stem an ever growing trade surplus, manage domestic inflation, move development from the coastal areas to the inland areas and decrease its dependence on heavily polluting industries.
Because of these objectives, manufacturing in China is becoming more expensive as China adds in hidden (and sometimes not so hidden) costs into the sourcing equation.
Here are the top 4 reasons you can expect costs to continue to rise in 2008:
1. Reduced VAT Refund
When Chinese manufacturers purchase goods domestically for use in manufacturing, they pay a VAT (value added tax). For people in the United States or others who are not familiar with the term VAT, it’s essentially a sales tax. Historically, the Chinese government allowed for generous VAT refunds if the final manufactured product is for export. However, as of July 1, 2007, China has changed its refund formula. Many products have had their VAT refunds completely eliminated and many others have been reduced. Since Chinese factories typically take these VAT rebates into account when calculating profit margins, the reduction or elimination of them is likely to… raise prices (or drastically shrink profit margins).
2. RMB Currency Appreciation vs USD
Until mid-2005, China maintained a peg on the RMB to the USD at 8.27. This provided an element of stability and took the currency risk out of the sourcing equation. However, over the past year and a half, China has begun appreciating the RMB against the dollar. As of this blog article, the current conversion is 7.26. Furthermore, many experts are estimating the rate to dip well into the 6’s over the next year.
Here is a chart from Yahoo Finance showing the USD vs. RMB trend:
Chart Yahoo Finance USD vs RMB
While nobody knows for sure what the ‘final’ trading range will be, there are a few interesting commentaries out there. This article from Bloomberg quotes Jim Rogers, chairman of Beeland Interests Inc. and a former partner of George Soros, saying the RMB may quadruple in the next decade.
“The currency has advanced 10.5 percent since the government scrapped a peg to the dollar in July 2005, gains that U.S. officials say are insufficient to reduce a trade surplus that swelled to $23.9 billion in September. Jim Rogers, chairman of Beeland Interests Inc. and a former partner of George Soros, said yesterday the yuan may quadruple in the next decade.
The yuan is “the best currency to buy right now,” Rogers told investors in Amsterdam, adding that he is shifting all his assets out of the dollar and into yuan. China is “going to be the most important country in the 21st century.”
The currency climbed 0.16 percent to 7.4926 per dollar as of the 5:30 p.m. close in Shanghai, according to data compiled by Bloomberg. Non-deliverable forward contracts show traders are betting the yuan will reach 7.0070 in 12 months, a gain of 6.9 percent from the spot rate, and 6.95 by the end of 2008.”
On a side note, if you’re importing to Europe, the Euro has actually been appreciating against the RMB, so for now you guys are ok! Check out a recent Yahoo Finance chart showing the Euro vs RMB trend.
Yahoo Finance Chart Euro vs RMB
3. Increased Costs Associated with Importing Raw Materials
China said on July 23rd, 2007 that it would begin requiring that exporters put down a deposit for half the amount they spend importing 1,853 raw materials. A quote from this People’s Daily article summarizes the policy.
“Enterprises which are engaged in the production of these products are required to have guarantee deposits in the Bank of China, the designated bank of China Customs, for a contracted period of time, according to the statement jointly released by the Ministry of Commerce (MOC) and China Customs.
If these enterprises fail to sell their products within the time scale dictated by the contracts, the customs will ask the bank to keep their deposits and interest for taxation.
“We are striving to improve the development of China’s processing trade in a bid to promote trade balance and reduce trade surplus,” said Wei Jianguo, vice minister of commerce.”
These new regulations will require a larger cash outlay for large contracts by Chinese factories. Therefore, it’s more likely that they will need to borrow money to meet this requirement. Borrowing money costs money and that cost is likely to be passed along.
4. Labor Costs Continue to Rise
Labor, once assumed to be endless in China, has been ‘drying up’ for a number of years now. China’s factories depend on a constant supply of new migrant laborers coming from the countryside. Typically every Chinese New Year, as many people return to their home town as can afford to do so. And each year, some old and many new laborers come to the cities in search of work after the holidays.
However, as villages have become more prosperous, with more family members making and sending money back home, this endless supply of new labor, has began to shrink. Because of this and other factors, labor costs continue to rise. China’s National Bureau of Statistics reported that in the first half of 2007 wages were up 18.5% compared to the year earlier period alone!
In addition, China as of January 1, 2008 enacted new labor laws that allow for much more worker protection, but of course at a cost. Global Labor Strategies has an article with many links to other blogs and newspaper articles discussing the reaction worldwide to the new law.
source from: http://www.chinasuccessstories.com/
China Speaker Bureau
Does your event or association need an expert that knows well about Chinese economy abd China marketplace? Look no further, contact Mr. Brian Su at http://www.midwestUSAChina.com today.
Mr. Brian Su has extensive experience in international trade, business development, marketing management, and strategic planning. Prior to founding Artisan Business Group, Mr. Su served Illinois governor Jim Edgar and assisted him in his trade mission to China in 1996 and helped him host a numbers of Chinese government and trade delegations.
Before coming to the U.S. in 1989, Mr. Su worked as a marketing manager for China Non-Ferrous Metals Import and Export Corporation. He has a MPA degree from the University of Illinois at Springfield in the U.S., and a Bachelor degree in English from Guizhou University in China. He is fluent in Chinese Mandarin and English. His extensive network of Chinese government and business connections, together with the amalgam of his Chinese background, US education and multinational work experience, leaves him well placed to bridge the business knowledge gap between the two cultures. Mr. Su is able to give its clients a unique inside view of what is happening in China found nowhere else. Mr. Su is also a public speaker, speaking on a wide range of China-related business and culture topics.
Mr.Su will speak at events organized by Illinois Soybean Association (August 2008), the 28th Annual Conference of the Association of Small Business Development Centers (Sept 2008).
Event organizers may bear the cost for travel and accommodation. Contact http://www.midwestUSAChina.com today.
Mr. Brian Su has extensive experience in international trade, business development, marketing management, and strategic planning. Prior to founding Artisan Business Group, Mr. Su served Illinois governor Jim Edgar and assisted him in his trade mission to China in 1996 and helped him host a numbers of Chinese government and trade delegations.
Before coming to the U.S. in 1989, Mr. Su worked as a marketing manager for China Non-Ferrous Metals Import and Export Corporation. He has a MPA degree from the University of Illinois at Springfield in the U.S., and a Bachelor degree in English from Guizhou University in China. He is fluent in Chinese Mandarin and English. His extensive network of Chinese government and business connections, together with the amalgam of his Chinese background, US education and multinational work experience, leaves him well placed to bridge the business knowledge gap between the two cultures. Mr. Su is able to give its clients a unique inside view of what is happening in China found nowhere else. Mr. Su is also a public speaker, speaking on a wide range of China-related business and culture topics.
Mr.Su will speak at events organized by Illinois Soybean Association (August 2008), the 28th Annual Conference of the Association of Small Business Development Centers (Sept 2008).
Event organizers may bear the cost for travel and accommodation. Contact http://www.midwestUSAChina.com today.
Beginner’s Guide to Sourcing From China
Blog Post Note: I came cross a good article written by Thomas at innovatize.com, and would like to share with you. - Brian
=====
Beginner’s Guide to Sourcing From China (Author:thomas at innovatize.com)
Your first step should be to locate some suppliers or agents. Hit the internet and start looking around. Send some emails and make some contacts. But be forewarned...lots of Chinese suppliers will ignore your emails completely. Don't feel bad, they do this to just about everyone. You can even pick up the phone and call them, and most of the time you will not be able to reach anybody, or you will leave a message and they will never call you back. This is China! (T.I.C)
Once you have located a few, check out their online catalogs which are usually lousy. Ask them to send you a regular paper catalog. Consider ordering a sample or two of their catalog items to check out the quality. Expect to pay at least for the sample freight (which is not cheap if they use DHL or something like that).
Once you are satisfied that the supplier is a viable candidate, ask them for a sample of your specific item (you may need to send them an original sample to copy or at least some design specs). Some suppliers will agree to send you ‘counter sample’ (a copy of your original sample) only after you have placed an order and made a down payment. In 90% of the cases, I would advise against this, but if your product is a complicated thing that must be custom made, then this could be the only choice.
OK, you have now found a supplier and are ready to place an order...now the scary part. They want 100% cash advance payment. Or maybe 50% on order placement and the other 50% when the goods are ready to ship. Should you do this? It's a tough question to answer. If it was me, and if I was based outside of China, I would not do it. It is just too risky! T.I.C.
Some factories might agree to 50% down payment and 50% AFTER you receive the goods. But I would have to wonder about a factory like this...why would they dare to take this risk with a stranger they do not even know? Either their factory is lousy, and they are desperate for business, or their profit margin is higher than 50%. Either way, I would avoid them.
Your other option is to use an agent (probably from the very beginning of the sampling process listed above). With an agent, at least you have a third party in the middle that should increase the chances of a smooth transaction. Especially if the agent physically travels to the factory to inspect the goods before shipment.
Another benefit of an agent is that they may know the factory and therefore be able to get better terms...perhaps even the 50% down, 50% on receipt of goods deal. (There are pages and pages on the internet about opening Letters of Credit (LCs) which are another payment option, but I think this is too complex for small buyers).
But you should also keep in mind that there are many disreputable and lazy/stupid agents out there. They write nice emails, promise the world, claim to have tons of experience, and then they rip you off. T.I.C.
So you need to check the background of any agent before signing up with them. This means calling the references they give, but also doing some checking yourself via the internet. Do google searches for their email addresses or phone numbers and see what pops up. You can learn a lot about potential agents using this method. It may take a few hours, but it is worth the investment of time.
Now, I would like to jump backwards a bit and mention another first step that you could take...buy a cheap ticket on a Chinese airline (via a Chinese travel agent in your home country...bargain like crazy for the lowest price!) and come to China to look around. You can do this as a first step, or you could wait until you have a few contacts established and then come to visit them.
Some tips for your visit:
a. When lining up your initial contacts, try to focus them around one area such as Shanghai or Guangzhou or Shenzhen. That way you will have a lot less traveling to do when you visit them. Also your eventual agent will have a much easier time managing your suppliers if they are all based in the same area.
b. When you visit China, don't dress like you are going on safari in Africa. Wear comfortable but business style clothes, e.g. slacks and dress shirt. Ideally a sports coat type jacket. Look nice and professional. Go without a tie if the weather is warm. But please don't dress like all those westerners who travel to China in khakis or shorts and a polo shirt. ( I know that many westerners will disagree with me on this, and they will say that the Chinese understand, etc., etc. But I would still say they are wrong. As proof, look at how the experienced language-proficient westerners who are based long-term in China dress. You will have a hard time finding any such China-savy westerner dressing in casual clothes for business meetings or even for factory visits).
c. Get ready to bargain for everything. Don't be shy and don't feel sorry for the seller and don't believe a single word that the seller says to you during the negotiation. Here is a secret tip to know when sellers in China are telling you a lie: Their lips will move...
d. Don't follow any standard rules of negotiation that your uncle or friend may pass along to you. Just because they got ripped off and didn't even know it, doesn't mean that you should too. Example of a rule not to follow: "Try to pay only half of the initial offer price of the seller". You must know how to calculate real costs of production in China in order to know what price you should pay...
OK, OK, I admit it...I once wrote a post about a negotiating rule of thumb in China. But at least I have more experience in China than your uncle.
A great time to visit China of course would be during a tradeshow focusing on your products. You can find schedules for these shows in the internet. There is a also good English-language magazine in Shanghai called "shanghai biz review" that lists upcoming events but you need to have a subscription to get this info.
Hmmm...I guess that is all I can think of for now. Good luck!
For more information about our Effective Sourcing From China webinar, please contact us at info@midwestUSAChina.com or visit our site at http://www.midwestUSAChina.com
=====
Beginner’s Guide to Sourcing From China (Author:thomas at innovatize.com)
Your first step should be to locate some suppliers or agents. Hit the internet and start looking around. Send some emails and make some contacts. But be forewarned...lots of Chinese suppliers will ignore your emails completely. Don't feel bad, they do this to just about everyone. You can even pick up the phone and call them, and most of the time you will not be able to reach anybody, or you will leave a message and they will never call you back. This is China! (T.I.C)
Once you have located a few, check out their online catalogs which are usually lousy. Ask them to send you a regular paper catalog. Consider ordering a sample or two of their catalog items to check out the quality. Expect to pay at least for the sample freight (which is not cheap if they use DHL or something like that).
Once you are satisfied that the supplier is a viable candidate, ask them for a sample of your specific item (you may need to send them an original sample to copy or at least some design specs). Some suppliers will agree to send you ‘counter sample’ (a copy of your original sample) only after you have placed an order and made a down payment. In 90% of the cases, I would advise against this, but if your product is a complicated thing that must be custom made, then this could be the only choice.
OK, you have now found a supplier and are ready to place an order...now the scary part. They want 100% cash advance payment. Or maybe 50% on order placement and the other 50% when the goods are ready to ship. Should you do this? It's a tough question to answer. If it was me, and if I was based outside of China, I would not do it. It is just too risky! T.I.C.
Some factories might agree to 50% down payment and 50% AFTER you receive the goods. But I would have to wonder about a factory like this...why would they dare to take this risk with a stranger they do not even know? Either their factory is lousy, and they are desperate for business, or their profit margin is higher than 50%. Either way, I would avoid them.
Your other option is to use an agent (probably from the very beginning of the sampling process listed above). With an agent, at least you have a third party in the middle that should increase the chances of a smooth transaction. Especially if the agent physically travels to the factory to inspect the goods before shipment.
Another benefit of an agent is that they may know the factory and therefore be able to get better terms...perhaps even the 50% down, 50% on receipt of goods deal. (There are pages and pages on the internet about opening Letters of Credit (LCs) which are another payment option, but I think this is too complex for small buyers).
But you should also keep in mind that there are many disreputable and lazy/stupid agents out there. They write nice emails, promise the world, claim to have tons of experience, and then they rip you off. T.I.C.
So you need to check the background of any agent before signing up with them. This means calling the references they give, but also doing some checking yourself via the internet. Do google searches for their email addresses or phone numbers and see what pops up. You can learn a lot about potential agents using this method. It may take a few hours, but it is worth the investment of time.
Now, I would like to jump backwards a bit and mention another first step that you could take...buy a cheap ticket on a Chinese airline (via a Chinese travel agent in your home country...bargain like crazy for the lowest price!) and come to China to look around. You can do this as a first step, or you could wait until you have a few contacts established and then come to visit them.
Some tips for your visit:
a. When lining up your initial contacts, try to focus them around one area such as Shanghai or Guangzhou or Shenzhen. That way you will have a lot less traveling to do when you visit them. Also your eventual agent will have a much easier time managing your suppliers if they are all based in the same area.
b. When you visit China, don't dress like you are going on safari in Africa. Wear comfortable but business style clothes, e.g. slacks and dress shirt. Ideally a sports coat type jacket. Look nice and professional. Go without a tie if the weather is warm. But please don't dress like all those westerners who travel to China in khakis or shorts and a polo shirt. ( I know that many westerners will disagree with me on this, and they will say that the Chinese understand, etc., etc. But I would still say they are wrong. As proof, look at how the experienced language-proficient westerners who are based long-term in China dress. You will have a hard time finding any such China-savy westerner dressing in casual clothes for business meetings or even for factory visits).
c. Get ready to bargain for everything. Don't be shy and don't feel sorry for the seller and don't believe a single word that the seller says to you during the negotiation. Here is a secret tip to know when sellers in China are telling you a lie: Their lips will move...
d. Don't follow any standard rules of negotiation that your uncle or friend may pass along to you. Just because they got ripped off and didn't even know it, doesn't mean that you should too. Example of a rule not to follow: "Try to pay only half of the initial offer price of the seller". You must know how to calculate real costs of production in China in order to know what price you should pay...
OK, OK, I admit it...I once wrote a post about a negotiating rule of thumb in China. But at least I have more experience in China than your uncle.
A great time to visit China of course would be during a tradeshow focusing on your products. You can find schedules for these shows in the internet. There is a also good English-language magazine in Shanghai called "shanghai biz review" that lists upcoming events but you need to have a subscription to get this info.
Hmmm...I guess that is all I can think of for now. Good luck!
For more information about our Effective Sourcing From China webinar, please contact us at info@midwestUSAChina.com or visit our site at http://www.midwestUSAChina.com
China and Asia Relocation Services
Are you relocating to Asia or China? Our friendly advisory services cover the following areas: visa information, travel and transportation, risk and security, political and legal issues, culture and language, relocation assistance, province/city profiles, health care, education, and more. Please contact us at http://www.midwestUSAChina.com today for complete relocation services.
Saturday, April 26, 2008
Artisan Business Group presents "Attracting Asian Investors to EB5 Projects" Seminar
The webinar is programmed for federally approved regional centers (EB-5 investment projects) and law firms that handle immigration cases. Topics include: Overview of Asian Outbound Immigration Investments; Major EB-5 Projects Available in Asian Market; the Characteristics of Asian Investors; Asian Investors' Decision Making Process; Developing Effective Marketing Strategies; Partnering with Asian Marketers; Cultural and Legal Issues, Q &A., etc.
When: May 11, 2008 2:00-3:30 pm CST or by individual appointment;
Registration: http://www.midwestUSAChina.com
When: May 11, 2008 2:00-3:30 pm CST or by individual appointment;
Registration: http://www.midwestUSAChina.com
Chinese English Translation Services
Artisan Business Group provides Chinese/English translation services to companies and individuals. We can handle most any size project in simplified Chinese. We are committed to providing the most accurate translation service available with fast service. We can handle any project type including but not limited to business brochure and cards, website contents, legal contracts, financial documents, sales literature. We specialize only in Chinese and English translation to create the most accurate translation possible. We also provide on-site interpretation services for companies that are hosting Chinese trade missions. Please inquire today at http://www.midwestUSAChina.com
Friday, April 25, 2008
China Briefing with Illinois Soybean Association
Mr. Brian Su, President of Artisan Business Group, has been invited to present "China Briefing" to the board of directors of Illinois Soybean Association on August 12, 2008. ISA receives a number of Chinese trade delegations each year. Illinois soybean is one of the largest agricultural exports to China. For details on how we can help you learn China market, please contact us at http://www.midwestUSAChina.com.
Monday, April 21, 2008
Meeting with Anderson Hendrix
Mr. Brian Su met with Ms. Sharon R. McDade, President and CEO of Anderson Hendrix, Inc. Anderson Hendrix Inc. is a global management and marketing consulting firm that specializes in business growth strategies, brand optimization strategies, and integrated marketing and business development solutions for emerging, growth-oriented, and multi-national companies. For details about the firm, log on http://www.andersonhendrix.com
Sunday, April 20, 2008
Meeting with TEDA
Mr. Brian Su had a meeting with Mr. Jianning Li, TEDA U.S. Chief Representative in Chicago. The Tianjin Economic-Technological Development Area is one of the largest Chinese State Council approved economic zones with 4500 enterprises from over 70 countries. For information about Artisan Business Group, please log on http://www.midwestUSAChina.com.
Saturday, April 19, 2008
Meeting wtih Egyptian Art Center
Mr. Brian Su met with Mr. Tarek Ragab, President of Egyptian Art Center from Egypt. Both parties discussed possibilities of exhibiting King Tut replicas in China. For more information about Egyptian Art Center, you can log on http://www.egyptianartcenter.com.
The 28th Annual Convention of the Association of Small Business Development Centers
The Association of Small Business Development Centers has invited Mr. Brian Su of Artisan Business Group to present "A Road Map for Exporting to Greater China Market" seminars at its 28th Annual Conference in Hyatt Regency Chicago on September 2-5, 2008. The conference detail is available at http://www.asbdc-us.org/conference/conference.html
Friday, April 18, 2008
Chinese Medical Device Industry
China has the second largest medical device industry in Asia and ranks 11th in the world, valued at around US$7.5 billion. The sector is expected to grow strongly over the coming years and is estimated to exceed US$1.5 billion by 2008.
The industry is concentrated in larger cities, especially Beijing, Shanghai, Guangzhou and Tianjin.
One-third of all medical equipment is imported from the USA. Around 200 US and other foreign manufacturers have established local production facilities in China over recent years. The dominance of USA suppliers poses the major competitive threat to other int'l exporters entering the Chinese market. However, as most hospitals have the discretionary power in purchasing, exporters who can demonstrate strong technical positions and value-for-money can find a good market in China.
Domestic production of medical devices continues to grow with increased foreign market activity. There are 9000 producers domestically. Typically the local industry products are less sophisticated than imports, and many companies do not manufacture to international standards and regulations. For more information about medical device industry in China, please contact us.
The industry is concentrated in larger cities, especially Beijing, Shanghai, Guangzhou and Tianjin.
One-third of all medical equipment is imported from the USA. Around 200 US and other foreign manufacturers have established local production facilities in China over recent years. The dominance of USA suppliers poses the major competitive threat to other int'l exporters entering the Chinese market. However, as most hospitals have the discretionary power in purchasing, exporters who can demonstrate strong technical positions and value-for-money can find a good market in China.
Domestic production of medical devices continues to grow with increased foreign market activity. There are 9000 producers domestically. Typically the local industry products are less sophisticated than imports, and many companies do not manufacture to international standards and regulations. For more information about medical device industry in China, please contact us.
Thursday, April 17, 2008
China's Education Market
Despite the size and diversity of China’s education system, there is substantial demand for overseas education due to a small number of places available per capita. Since most urban families have only one child because of China’s family planning policy, parents tend to give their children the best education they can. Recent surveys have indicated that children’s education is the top investment priority of Chinese families, ahead of buying houses, saving for retirement and all other investment options.
China has an excellent education system; however, China’s domestic education system struggles to expand to meet demand. There are currently not enough places for students wishing to enter university for the 150 million people in the 17–24 age group looking for opportunities in higher education.
In addition to the fierce competition for university places, China has also realized the importance of vocational and adult education. There is a potentially huge demand from mature age students (ie. 24 years and over) that is currently not being met.
The role of the government in China is far more substantial than in the USA and there is government involvement in most activities that involves foreigners or overseas organizations. The government relationship is crucial, both for student flows to the USA and for all other aspects of the USA education relationship, including the in-China provision of courses.
Higher education comprises junior college, Bachelor, Master and Doctoral degree programs. In 2006, there were 1,147 junior colleges and 720 universities countrywide offering 5,460,500 places for junior college and bachelor programs; 56,000 places for doctoral programs; and 342,000 places for master programs. Included in these colleges and universities are more than 317 research institutions approved by the Ministry of Education.
Medium level colleges offer certificate courses which, however, cannot be converted into diploma courses. The medium level professional schools and technical colleges offer basic to intermediate vocational training, both long term and short-term courses. Since the 1980s, there has been a rapid increase in the level of government recognition regarding the importance of Chinese vocational and technical education, and there has also been a sharp increase in the number of students attending such courses.
In 2006, there were 18.1 million students enrolled in 14,693 vocational and technical schools nationwide.
Higher level vocational and technical schools cater for more sophisticated vocational training such as IT or sophisticated manufacturing. The courses can also generally be taken at diploma level. There are currently 921 higher level vocational and technical education institutions in China.
USA is one of the leading foreign providers of courses in China. During the last five years, there has been a dramatic increase in student visa applications to study in the USA. For information about China's Education Market webinar, please log on http://www.midwestUSAChina.com
China has an excellent education system; however, China’s domestic education system struggles to expand to meet demand. There are currently not enough places for students wishing to enter university for the 150 million people in the 17–24 age group looking for opportunities in higher education.
In addition to the fierce competition for university places, China has also realized the importance of vocational and adult education. There is a potentially huge demand from mature age students (ie. 24 years and over) that is currently not being met.
The role of the government in China is far more substantial than in the USA and there is government involvement in most activities that involves foreigners or overseas organizations. The government relationship is crucial, both for student flows to the USA and for all other aspects of the USA education relationship, including the in-China provision of courses.
Higher education comprises junior college, Bachelor, Master and Doctoral degree programs. In 2006, there were 1,147 junior colleges and 720 universities countrywide offering 5,460,500 places for junior college and bachelor programs; 56,000 places for doctoral programs; and 342,000 places for master programs. Included in these colleges and universities are more than 317 research institutions approved by the Ministry of Education.
Medium level colleges offer certificate courses which, however, cannot be converted into diploma courses. The medium level professional schools and technical colleges offer basic to intermediate vocational training, both long term and short-term courses. Since the 1980s, there has been a rapid increase in the level of government recognition regarding the importance of Chinese vocational and technical education, and there has also been a sharp increase in the number of students attending such courses.
In 2006, there were 18.1 million students enrolled in 14,693 vocational and technical schools nationwide.
Higher level vocational and technical schools cater for more sophisticated vocational training such as IT or sophisticated manufacturing. The courses can also generally be taken at diploma level. There are currently 921 higher level vocational and technical education institutions in China.
USA is one of the leading foreign providers of courses in China. During the last five years, there has been a dramatic increase in student visa applications to study in the USA. For information about China's Education Market webinar, please log on http://www.midwestUSAChina.com
Wednesday, April 16, 2008
ADD ABG TO YOUR BUSINESS RELATIONSHIP WITH CHINA
Artisan Business Group is a consulting and advisory services headed by China expert Mr. Brian Su. We assist small and mid-sized business in capturing opportunities in the People's Republic of China through advising them on issues of Chinese market entry, government regulations and risk management.
With China's entry into the WTO and billions of dollars in foreign investment, China is becoming the World's Manufacturing Factory; the country's hosting of the 2008 Olympics and the 2010 World Fair will provide new growth opportunities for many small and mid-size companies. In order to benefit from this emerging market, American executives and entrepreneurs must combine proper business analysis and solid communication with the Chinese counterparts. We are your bridge to the new emerging markets in China, we are here to assist you achieve that goal.
*
Is your company currently engaged in or planning to do business with China?
*
Do your key managers and employees interact with a significant number of Chinese counterparts?
*
Have you encountered communication difficulties when working with people from China, i.e. meeting expectations, defining deliverables?
China is one of the most exciting markets in the world. It is also one of the most challenging. The Chinese are smart, touch negotiators. Understanding how to do business effectively with the Chinese is essential in today's competitive marketplace.
We focuses on working with clients through training, consulting and coaching. Our goal is to assist non-Chinese business managers, who do business directly or indirectly with businesspeople in China, develop an understanding of how business is done and how to be successful. Our major services include:
China Advisory & Consultancy
* Market research & entry strategy
* Finding the right partners in China
* Credit checks & taxation advice
* Identifying suitable areas and premises in China
* Recruitment under Chinese employment laws
* Management briefings, orientation & mentoring
* Intellectual property issues
Sourcing Development
* Identify the most-reputable and best-qualified factories & ensure high-quality results for your products
* Lower material costs with competitive pricing negotiated on your behalf from the factories
* Set up and facilitate a relationship between two parties
* Develop and promote products to the Chinese market
* Product promotion party & exhibition arrangements with potential clients and government officials
Other Consulting Services
* Provide translations services
* Offer in house workshops and online services
* Help set up dependable business networks in China
* Assist travel and trip arrangements, including pre-departure orientation sessions
* Offer pre-departure orientation and counseling
* Website translation and content localization
* Services on a retainer basis available
Visit us at http://www.midwesetUSAChina.com
With China's entry into the WTO and billions of dollars in foreign investment, China is becoming the World's Manufacturing Factory; the country's hosting of the 2008 Olympics and the 2010 World Fair will provide new growth opportunities for many small and mid-size companies. In order to benefit from this emerging market, American executives and entrepreneurs must combine proper business analysis and solid communication with the Chinese counterparts. We are your bridge to the new emerging markets in China, we are here to assist you achieve that goal.
*
Is your company currently engaged in or planning to do business with China?
*
Do your key managers and employees interact with a significant number of Chinese counterparts?
*
Have you encountered communication difficulties when working with people from China, i.e. meeting expectations, defining deliverables?
China is one of the most exciting markets in the world. It is also one of the most challenging. The Chinese are smart, touch negotiators. Understanding how to do business effectively with the Chinese is essential in today's competitive marketplace.
We focuses on working with clients through training, consulting and coaching. Our goal is to assist non-Chinese business managers, who do business directly or indirectly with businesspeople in China, develop an understanding of how business is done and how to be successful. Our major services include:
China Advisory & Consultancy
* Market research & entry strategy
* Finding the right partners in China
* Credit checks & taxation advice
* Identifying suitable areas and premises in China
* Recruitment under Chinese employment laws
* Management briefings, orientation & mentoring
* Intellectual property issues
Sourcing Development
* Identify the most-reputable and best-qualified factories & ensure high-quality results for your products
* Lower material costs with competitive pricing negotiated on your behalf from the factories
* Set up and facilitate a relationship between two parties
* Develop and promote products to the Chinese market
* Product promotion party & exhibition arrangements with potential clients and government officials
Other Consulting Services
* Provide translations services
* Offer in house workshops and online services
* Help set up dependable business networks in China
* Assist travel and trip arrangements, including pre-departure orientation sessions
* Offer pre-departure orientation and counseling
* Website translation and content localization
* Services on a retainer basis available
Visit us at http://www.midwesetUSAChina.com
Sunday, April 13, 2008
China's Automotive Market
The automotive industry is one of China’s designated ‘pillar’ industries. It accounts for between two to four per cent of China’s total industrial output and employs approximately 300,000 people within 130 key automotive original equipment manufacturer (OEM) companies. It is predicted that China’s vehicle production is estimated to grow to eight million vehicles by 2008-2010.
The manufacturing of passenger cars is one of the national priorities, particularly in Shanghai, Changchun, Wuhan and Guangzhou where dominant international players such as Volkswagen, General Motors, Citroen and Honda have established production facilities.
In addition to those major players, many local automotive manufacturers such as Chery Auto, Geely Auto, Zotyr Auto, etc are growing quickly. Chery plans to raise its annual automotive output to 1 million vehicles by 2010. Chery’s current annual automotive production is around 400,000 vehicles.
China’s automotive component industry is quite segmented with approximately 2000 large and medium-sized automotive component manufacturers. There are also over 1000 small manufacturers across China operating under separate industry administrations but supplying to the automotive industry. The industry is focused on safety systems, new material utilisation and environmentally friendly technologies such as alternative fuel systems for motor vehicles.
China’s automotive industry has undergone major restructuring at the central government level and the State Economy and Trade Commission is now responsible for the industry in terms of ‘macro’ planning. This move is seen as a ‘decentralization’of power to provincial government and automotive industry departments.
For more information, please contact us.
The manufacturing of passenger cars is one of the national priorities, particularly in Shanghai, Changchun, Wuhan and Guangzhou where dominant international players such as Volkswagen, General Motors, Citroen and Honda have established production facilities.
In addition to those major players, many local automotive manufacturers such as Chery Auto, Geely Auto, Zotyr Auto, etc are growing quickly. Chery plans to raise its annual automotive output to 1 million vehicles by 2010. Chery’s current annual automotive production is around 400,000 vehicles.
China’s automotive component industry is quite segmented with approximately 2000 large and medium-sized automotive component manufacturers. There are also over 1000 small manufacturers across China operating under separate industry administrations but supplying to the automotive industry. The industry is focused on safety systems, new material utilisation and environmentally friendly technologies such as alternative fuel systems for motor vehicles.
China’s automotive industry has undergone major restructuring at the central government level and the State Economy and Trade Commission is now responsible for the industry in terms of ‘macro’ planning. This move is seen as a ‘decentralization’of power to provincial government and automotive industry departments.
For more information, please contact us.
Monday, April 7, 2008
Biotechnology Market in China
The Chinese Government has targeted biotechnology as a priority, along with information and communications technology. Incentives, development programs, education and training, research and development, and the commercialization of new products, technologies and services are being actively encouraged by the government.
Pharmaceuticals is one of the fastest growing industries of biotechnology in China. In the current China pharmaceutical market, 'me too' products represent 90 per cent of total market. Chinese relatively low R&D investment means China has very few of its own patented drugs on the world market. This situation has been a major concern of the Chinese Government resulting in the concerted effort to make biotechnology a key driver in health care and the drug industry in future years.
In 2006, the domestic pharmaceutical industry grew rapidly and annual production reached around A$88 billion, at 18 per cent growth. Biological products increased 21.7 per cent totaling A$6.6 billion, and medical devices increased 27 per cent totaling A$7.1 billion. Biotechnology application in agriculture has progressively increased, with a focus in areas such as rice and cotton.
With China’s rapid economic development, per capita incomes continue to increase, particularly in major urban centers. Better health care products and services are an increasing focus for wealthy citizens. Biotechnology is therefore expected to continue to grow at over 10 per cent per year for the next five to 10 years. At the same time, biotech resources and manpower are being consolidated into major centres such as Shanghai, Beijing, Guangzhou, Shenzhen, Changchun, and Shijiazhuang.
For more information about China's biotechnology market, please contact us.
Pharmaceuticals is one of the fastest growing industries of biotechnology in China. In the current China pharmaceutical market, 'me too' products represent 90 per cent of total market. Chinese relatively low R&D investment means China has very few of its own patented drugs on the world market. This situation has been a major concern of the Chinese Government resulting in the concerted effort to make biotechnology a key driver in health care and the drug industry in future years.
In 2006, the domestic pharmaceutical industry grew rapidly and annual production reached around A$88 billion, at 18 per cent growth. Biological products increased 21.7 per cent totaling A$6.6 billion, and medical devices increased 27 per cent totaling A$7.1 billion. Biotechnology application in agriculture has progressively increased, with a focus in areas such as rice and cotton.
With China’s rapid economic development, per capita incomes continue to increase, particularly in major urban centers. Better health care products and services are an increasing focus for wealthy citizens. Biotechnology is therefore expected to continue to grow at over 10 per cent per year for the next five to 10 years. At the same time, biotech resources and manpower are being consolidated into major centres such as Shanghai, Beijing, Guangzhou, Shenzhen, Changchun, and Shijiazhuang.
For more information about China's biotechnology market, please contact us.
Tuesday, April 1, 2008
Missouri Governor, Chinese Agencies Sign Agreement To Promote Trade
Missouri Gov. Matt Blunt signed an agreement on March 26 with China’s Investment Promotion Agency and the Trade Development Bureau, on behalf of that nation’s Ministry of Commerce, that could make St. Louis a new transportation hub for trade with China and increase exports between Missouri and China. The memorandum of understanding document was signed following a series of meetings with Chinese officials led by Gov. Blunt and U.S. Senators Kit Bond (R-Mo.) and Claire McCaskill (D-Mo.). The governor and senators last week led a bipartisan delegation of government, business, and civic leaders from the St. Louis area on a trade mission to China.
“Missouri workers are the most productive employees in the world, and I am pleased to promote our state’s workforce around the globe,” Gov. Blunt said. “This agreement is a result of our meetings with the Vice Minister of Commerce and promises to foster a long and beneficial relationship between Missouri and China that will open new markets for Missouri-made products, generate more opportunities for Missouri workers, and showcase the countless benefits of doing business in and with our state.”
“The creation of a Sino-American import-export hub in St. Louis will mean hundreds of new jobs for Missourians and just makes economic, commercial, cultural, political and strategic sense,” U.S. Sen. Kit Bond said. “By improving trade between our countries, we can create jobs here at home for Missourians and a more sustainable and long-term relationship that benefits the U.S. and our strategic interests.”
“This is an important milestone toward leveling the playing field for trade with China,” U.S. Sen. Claire McCaskill said. “I’m happy to be working in a bipartisan way to enhance the opportunity to export manufactured goods and agricultural products from Missouri, which will help our economy and create jobs here at home.”
The memorandum of understanding agreement outlines ways to strengthen the relationship between China and Missouri through new initiatives in trade and economic development. Calling St. Louis “the traditional center of the United States,” it says St. Louis “can serve as an important center for expanding two-way exchanges and investment between China, Missouri, and the Midwest.” It also says, “Lambert St. Louis International Airport can become a potential center for Chinese airfreight and passenger flights.”
The memorandum of understanding further states that a delegation of the Chinese Ministry of Commerce will visit Missouri to review and assess the opportunities for expanding trade and investment promotion activities in agriculture, high-tech equipment and other manufactured goods, financial services, manufacturing, parts assembly, and real estate. It calls for continuing efforts to “foster a long-term, friendly and cooperative relationship and to develop a healthy partnership between China, Missouri, and the Midwest region of the United States.”
Joining Gov. Blunt and U.S. Senators Bond and McCaskill on the trade mission and for the meetings that resulted in the signing of the memorandum of understanding include: U.S. Rep. Russ Carnahan (D-Mo.); St. Louis Mayor Francis Slay; St. Louis County Executive Charlie Dooley; and former Mo. Gov. Bob Holden, who serves as the Vice Chairman of the Midwest U.S.-China Association and was invited by Gov. Blunt. Business leaders include Richard C. D. Fleming, president and CEO of the St. Louis Regional Chamber & Growth Association (RCGA); David L. Steward, chairman and CEO of World Wide Technology; and executives with Pfizer, Peabody Energy, Unigroup, McEagle Properties, the World Trade Center St. Louis, and Lambert St. Louis International Airport.
“This is an outstanding agreement for the whole St. Louis area,” St. Louis Mayor Francis Slay said. “Our goal is to create good paying jobs in St. Louis. China’s interest is in developing the St. Louis area as a major point of access for trade in the United States. We believe we have taken an important step toward the goals of both sides.”
The RCGA’s Fleming commented, “We have shown the Chinese that the St. Louis area’s role and position in the United States–embodied in our region’s brand, ‘Perfectly Centered. Remarkably Connected’–make us a natural hub as they seek to expand their trade with the U.S., especially our exports. The St. Louis area is at the center of a 20-state global market that accounts for 43 percent of the U.S. population, 40 percent of its Gross Domestic Product, and 40 percent of U.S. agriculture. This market–equal in area to India and in production to Japan and Mexico combined–is not well-served by the two coasts. Our geographical location and superb transportation assets make us a natural.”
St. Louis County Executive Charlie A. Dooley said, “We are extremely pleased with the details of the memorandum of understanding and I know our entire Missouri delegation believes that it signals a very encouraging trend with our friends here in China.”
The trip was a follow-up to the visit to St. Louis last February of Zhou Wenzhong, China’s Ambassador to the United States. That visit, the first by a Chinese ambassador to St. Louis in memory, resulted from an invitation by the two senators and was hosted by the RCGA. During his two days in Missouri, Mr. Zhou received briefings on the area’s transportation assets and from executives at such companies and organizations as Monsanto, Pfizer, Bunge North America, Washington University, Webster University, the University of Missouri, Barnes-Jewish Hospital, the Danforth Plant Science Center, and others.
Missouri Department of Agriculture Director Katie Smith also led a feed-related mission in mid-March to Vietnam to assist Missouri companies and suppliers in developing sales to Vietnam’s feed industry. More information can be found in our coverage of that trip.
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