Doing Business with China - NASBITE International · Doing Business with China Trade surplus with...
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Doing Business with China Doing Business with China Hongxia (Mary) Ma Illinois SBDC International Trade Center Governors State University NASBITE 2015 Conference
Transcript of Doing Business with China - NASBITE International · Doing Business with China Trade surplus with...
Doing Business with China
Doing Business with China
Hongxia (Mary) Ma
Illinois SBDC
International Trade Center
Governors State University
NASBITE 2015 Conference
Doing Business with China
Macro Economic Overview
Prospect and Opportunities
ITC Assistance
Doing Business with China
Three Main Centers of Economic Gravity
Bohai Rim
Yangtze Delta
Pearl River Delta
CHINA
Doing Business with China
World’s 2nd largest economy Annual GDP growth 10% for 25 years [forecast 7% to 2015] World’s largest exporter & manufacturer Inflation: 5.5% Per capita GDP $7,600 in 2010, $18,000 in 2030 Of 1.3bn, 200m+ live on < $2 / day [Source: Goldman Sachs]
Doing Business with China
833m mobile phone users, 420m internet
Huge investment in Motorways, Airports, Metro, Rail
89 million cars. By 2020, 140 million?
1998: 1 million university places. Now: 6 million+
200 - 600,000? engineering graduates a year
16 of world’s 20 most polluted cities are in China
50% of Chinese GDP: Savings
Economic Highlights
Doing Business with China
Doing Business with China
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Source: Angus Maddison
Doing Business with China
5th generation leadership started in 2012
Harmonious, balanced, sustainable development
Domestic challenges: demonstrations, environmental, unemployment
“Chinese Dream”
Doing Business with China
Increase domestic consumption
Stimulate domestic innovation
Develop a world-class services sector
Expanding China’s middle class
Moving millions of rural Chinese citizens to urban Center
Doing Business with China
Established the Shanghai Pilot Free Trade Zone (SFTZ) in September 2013, covering 11 square miles in Pu Dong
Experiment with market-based reforms
Relaxed controls on foreign investment
Increased market access in industry sections
Streamlined administrative procedures
Financial and foreign exchange reforms
Doing Business with China
Trade surplus with U.S. new high $343B
U.S. imports from China $467B, exports to China $124B
China- US’s 3rd largest export market US- China’s 2nd largest trading partner
From 2004 to 2013, US exports to China increased 255%
The US share of exports to China accounted for nearly 8% of total imports, falling behind the European Union, South Korea, Japan, and Taiwan
Doing Business with China
U.S. Companies in China
59% - “optimistic” 5-year business outlook
76% - recent economic reforms helped “great” or “very great” extent
54% - expand operations 2nd / 3rd tier cities
78% - rank China within top-3 destinations for near-term global investment plans
Doing Business with China
Protectionism Catalogue Guiding Foreign Investment Standards Labor Costs Wages double-digit growth over 2010 Hiring / Retention Mid - Senior Management Foreigners Social Insurance Costs Certifications / Approvals CCC Mark Costly, Slow Duplicative Unclear Regulatory Environment
Doing Business with China
Urbanization 171 Cities > 1M (9 in U.S.) 47% Urban 2010
51.5% Urban 2015
Middle Class
23% Now (300m) 48% 2020 (480m)
Doing Business with China
U.S. Exports to 2nd and 3rd tier Cities Top 15 – 60% Hefei – 164% Ningbo – 90% Chengdu – 75% Hangzhou – 63%
Doing Business with China
Luxury Consumption 20% ($27B) Worldwide Luxury Goods 2015 80% Buyers < Age 45 (50% in U.S.) 40% < Age 35
Doing Business with China
Ecommerce Blooming China has the fastest growing E-commerce market in the world E-tailing industry annual growth of 120% over the last decade Online sales reach $540 billion by 2015
Doing Business with China
Exporting - Agent or Distributor Establishing a local presence (Rep, JV, WOFE, FICE) Sourcing, Outsourcing (goods, business processes) China going global Consumer spending Infrastructure development Increased manufacturing output
Doing Business with China
Energy, including efficiency
Environmental protection
Financial Services
Information & Communications technology
Creative Industries/Design
Enhanced public services - health & education
Innovator, R&D
Doing Business with China
Clean Energy
Green Building
Renewable Energy
Water & Water Pollution
Travel & Tourism
Medical Devices & Healthcare
Railroads and Metro Transit
Aviation
E-Commerce
Logistics
Information & Communications Technology
Marine Industries
Agriculture
Chinese Outbound FDI CTS
Doing Business with China
Practicalities: Mandarin v's Cantonese, business cards, interpreters, banquets, design / promotion, gifts, hotel cards etc.
Acknowledgement: input from Eugene Chang (formerly at CBBC)
Behaviours (business context)
Patient
Group orientation
Hierarchy
‘Guanxi’ (networks/relationships)
Bonding
Modest
Decision-making
- Simplicity v’s complexity
- Employment, technology
Contract (only the beginning)
‘Face’
Personal relationships
Influences
Long history
Confucius, Daoism, Buddhism
Women (father, husband, child)
Elders
Pictographic language
Study / education
Family ties
Zhongguo (middle kingdom)
Patriotism
Doing Business with China
Leave your preconceptions at home Keep hold of your business sense as tightly as you would
anywhere else Do your homework on the market and on potential partners Patience is a virtue; need commitment and open mindedness Take a long-term approach, but do not stick rigidly to your
plans Obtaining good quality independent legal and professional
advice is essential Protect your IPR
Carry out due diligence Importance of personal relationships
Doing Business with China
Doing Business with China
ITC at GSU is partially Funded by
U.S. Small Business Administration (SBA)
Illinois Department of Commerce and Economic Opportunity (IL DCEO)
Governors State University (GSU)
Doing Business with China
The White House Initiative on Asia Americas and Pacific Islanders (WHIAPPI)
Bilingual language skills, Specialty on China Project
Rich Experiences in Global Logistics and Supply Chain
Ex-Im Bank GCE Originator
NASBITE CGBP
2013 Governor’s Award
2015 President “E” Award for Export Service
Doing Business with China
Marketing Research
Market Entering, find Distributors and Agents
Trade Show Support (ISTEP)
Export by Ecommerce Initiative (Alibaba)
Transportation and Logistics Solutions
Export Finance Program
Doing Business with China
600 sales leads, 200 agents leads signed new contracts
$2.3 million sales during trade show
$125 million exports increase in next year
20 GSU students participated the trade show
Trade mission video
Doing Business with China
From Chicago to Shanghai:
Transit time : 21-23 days
Container freight cost: $1500-2000/40’
“Chicago - major Midwest
distribution and transportation hub.”
Doing Business with China
Free Verified Membership
List up to 300 products
List products on multi-language site
Customizable mini-site / storefront
Dedicated Industry Hub gateway on Alibaba.com ’s Home page
Doing Business with China
Contact us: Mary Ma, Director
Illinois SBDC International Trade Center at GSU
Tel : 708-534-6976, Email: [email protected]
http://www.govst.edu/ITC
Grand Opening
New ITC Satellite Office (AAPI Outreach) GSU Naperville Education Center
2244 W. 95th St. , Naperville IL 60564
