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China Business » Information » Exporting to China Exporting to ChinaThere are major western companies now doing business in China. Thus, it is a possibility for medium-sized companies and maybe even small companies to begin work in this large and growing marketplace for western goods.Since China is so large a country and since it has both temperate and semi-tropical climates, one needs to have a unique product to attract Chinese buyers. They can grow or manufacture so many of their own necessities. In addition, Chinese commodities often sell for about one-fourth of the cost of imported commodities which compete with those from China.  Among products which China imports a lot are soybeans and cotton. Foreign suppliers of these two crops are making profits by selling in China. Many other farm type crops have a hard time importing to China for profit. The undervalued exchange rate for the Chinese Yuan keeps most other farm crops from profiting from Chinese sales. One needs to be careful about trying to export most manufactured goods to China because of pirating and copyright infringement issues. Since China joined the World Trade Organization, it has begun trying to make its laws in agreement with those of the WTO. This will be a long and difficult process which the government is undertaking to protect the reputation of China. To combat the negative issues of pirating and counterfeiting, China must work hard to train public officials and educate the Chinese public about the negative impact of piracy and counterfeiting. When exporting goods to China, the company must be ready to pay import tariffs. These are imposed to protect China's own manufactured goods. The company must also have a buyer or sales agent in China, someone who knows the marketing strategies which will work there. Legal assistance will be needed for many things including protecting the company's intellectual rights in China and resolving commercial disputes. The company should also be prepared to staff a representative office in China with members of its own team who speak Mandarin and understand Chinese culture. The representatives will have to keep the good will of the Chinese people involved with the company. The representatives must be aware of attempts to bribe the company and be able to resist any such attempts. It is advisable for a company to have experience in exporting to other countries, preferably Asian countries, before attempting to begin working in China. With that experience, the company is ready to begin research as to which area of China to consider first for testing their products. Research should also consider who would be prospective competitors and how they operate their businesses. Local tastes are important, too. If the consumers have never heard of a product such as your company will offer, how will they respond? The idea of making a quick profit in China is not really feasible. A long-term profit may be realised with careful planning and consistent monitoring of the company's presence in China. This country of over 1.3 billion people is certainly worth the challenge of new companies and new products. The profit is there for those who are able and willing to pay the price of wise investing. Written on: 25th September 2007 Written by: R. Harris |
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