10 Questions You Should Ask About Doing Business in China

Thursday 31 January, 2008

I attended this event the morning of 23 January, 2008:

“Charter One is pleased to invite you to attend a private forum and panel discussion
on conducting business in China.

Scott C. Swanson, President and Chief Executive Officer-Charter One, Illinois
Phil Corse, Chief Executive Officer, Connectables, LLC, Adjunct Professor of Marketing-Northwestern University, Kellogg School of Management
Nelson de Castro, Senior Vice President/Global Trade Director-RBS Citizens, N.A. – Charter One
Joseph J. Italiano III, Chief Financial Officer, Secretary and Treasurer-International Components Corporation
Keith W. Jaffee, Chief Executive Officer-Focus Products Group, LLC
George Qin, Vice President-Bank of China
Preston M. Torbert, Partner-Baker & McKenzie, LLP

The 10 questions answered by the panel were:

1. Please provide a historical perspective on the Chinese form of capitalism.

2. As a manufacturer, could you tell us about your experience and lessons learned while doing business in China ? Would you recommend a joint venture or a WOFE (Wholly Owned Foreign Enterprise)?

3. What advantages do Chinese banks provide over foreign banks located in China and what should I be looking for in a banking partner?

4. With the legal system in China in a rapidly evolving state, how can U.S. companies be assured that they will enjoy necessary rights and protections? What are the key rules and regulations of which companies need to be keenly aware?

5. What capabilities make RBS, Charter One and Bank of China partnership unique for businesses importing and/or exporting and how can this relationship help U.S. companies further grow their business?

6. China has a rapidly developing economy. What are the future strategic risks and marketing trends that a company should be prepared for?

7. What is the best way to go about finding an appropriate business partner in China , be it agent, licensee, supplier or a joint venture partner? What advice would you have for other businesses doing business in China ?

8. What are the foreign exchange considerations?

9. What were the most important lessons learned as you developed new products in the Chinese market? What advice do you have on how to best define and reach your target market in China ?

10. What are the differences in the banking systems between the U.S. and China and how do they affect how companies conduct business in China ?”

I didn’t have time to write down the answers to all of the questions. Suffice it to say that this was a high-quality event with a representative panel which offered an appropriate variety of viewpoints. My 1 concern with it was China was spoken of as if it were 1 homogeneous country/culture/economy. I’ve only been to the south for a short while, but all I’ve learned is that China is quite different, depending on where you go-urban/rural, coasts/inland, north/south, etc. So if you speak of China as 1 entity, what might work well in 1 place could very well fail in another not too far away.
The information packet also contained these articles:

Economist 10 Jan 2008 Those who demand instantaneous revaluation of the Chinese Yuan don’t recognize that it must rise slowly so as not to disrupt financial markets.

Economist 3 Jan 2008 In classic “go local” approach & despite supposedly becoming the manufacturer for the world, many organizations set up in China serve the local market & not just for export.

US Treasury The US treasury divulges that the Chinese began working with the Chicago Mercantile Exchange to offer FX futures in China as far back as 2004.



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