China Business Opportunities for Small Businesses

Growth through penetration of emerging markets, such as China, is a major strategic initiative for many small to mid-size USA companies.BR>

Growing Economy C USA Exports to China are Booming!
China represents a huge opportunity to export goods as well as import products & services. Despite attention about USA companies exporting jobs to China and the China-USA trade deficit, USA companies exports of goods & services to China is thriving. Over the past 10 years, USA exports to China have quadrupled to approximately $50 billion C which was 5 times faster than exports to the rest of the world.

This growth of exports to China is not just coming from large USA firms, such as Motorola, GE, DuPont, United Technologies, etc. Small and mid-size companies are prospering by exporting to China. The number of small and mid-size exporters to China has grown from 3,100 in 1992 to over 20,000 companies in a wide range of market segments.

Attractive Markets C China Business Opportunities Span A Broad Market Range!
In addition to well publicized growth of Agribusiness, Construction, and Energy exports to China, significant market opportunities exist for USA companies to export into Chinas Industrial, Medical, Telecommunications, Machine Tools, Environmental, Infrastructure, Security and Recreation Markets C just to name a few of the best export market prospects. China and Hong Kong is now the USAs third largest export partner C behind only Canada and Mexico.

China is encouraging even greater business partnership with USA companies. In 2006, Chinas President Hu Jintao arranged for 200 Chinese executives to visit the USA on a buying tour. Also, most USA states have trade offices which foster trade with China.

Manufacturing in China C Enormous Potential to be Globally Competitive!
China continues to be the worlds destination for foreign investment. USA business investment alone is over $3 billion annually, which ranks as Chinas third largest investor. In addition to the Chinese government support for USA companies interested in expanding into China, there is an emergence of Chinese firms to facilitate USA Companys successful entry into China.

For USA companies, taking advantage of Chinas competitive labor market, investment incentives, and expanding local markets can be dramatic C especially with uncertain local market conditions. Significant improvements in bottom line profitability as well as return on investment are both realistic opportunities.

Perhaps the most important reason for establishing a Chinese manufacturing presence is to be close to customers who are already located in China.

Close to Customers C Improve Service to Customers located China!
Before Chinas entry into the WTO, China prevented USA companies from distributing their imported products or providing local repair/maintenance services inside China. Now, China allows USA firms to support both locally manufactured and imported products within China. This provides flexibility on how to provide logistic support to customers located in China, such as:

  • Chinese Local Trading Companies
  • JV Partnership Companies
  • Foreign Invested Commercial Enterprise (FICE)
  • Wholly Owned Foreign Enterprise (WOFE)

Due to the complexity of China markets and logistics peculiarities, in order to maximize service to customers in China, small and mid-size firms benefit from having a local Chinese partner for local manufacturing, importing and marketing within China.

About the Author

Darrell Wilk is a Global Business Consultant and Instructor at Concordia University in St. Paul, Minnesota and Argosy University in Eagan, Minnesota focused on Marketing, Strategic Planning, and Global Business Development. Darrell has extensive experience in consulting on China business opportunities. In addition, he instructs Executive Sales Leadership at the University of Wisconsin, Madison Executive Education.

Darrell also is President and a senior consultant with WW Business Net, a consulting company that specialized in helping US companies that wants to do business in China. The consulting company features China Business Tours, which are designed to help businesses economically explore business opportunities in China. Darrell may be contacted by emailing him at info@usa-chinanet.com or calling 714-651-6841


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