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One Billion Served?

AIR DATE: Thursday, April 3rd 2008
Download the mp3 for this show.
Is the Northwest ideally poised to become a hub for businesses catering to the Chinese consumer?

A few weeks ago, the San Diego Padres and the Los Angeles Dodgers played two exhibition games in Beijing. They were the first Major League Baseball games ever to be played in China. MLB is trying to win over Chinese sports fans (who currently favor basketball and soccer), but it's really just just one example of a broader shift: viewing China as an enormous market of potential consumers, not merely a source of cheap goods and labor.

And while China may soon become the world's biggest consumer, the government has held on to some troubling habits from its decades of repressive rule -- sometimes with the acceptance (or even participation) of American companies. The government is currently blocking internet access to YouTube, to prevent its citizens from seeing images of Tibetan protestors clashing with police. And Google purges search results that displease Chinese authorities.

Questions of not just free but fair trade have dogged U.S. corporations for as long as they have done business with China. If these questions came to the fore when China was mainly seen as a labor market, how do they change when China rises as a consumer force?

But more basically, is the Northwest ideally poised to become a hub for businesses catering to the Chinese consumer? (Washington is already the number two exporter to China among U.S. states; Oregon is number 10.) What business opportunities exist for American entrepreneurs? What businesses might not be able to compete in the Chinese market?

Have you dealt with China as a market for your goods or services? What are the cultural or bureaucratic challenges that you've faced? Is this potentially huge reservoir of customers worth the investment?

Tagged as: china · trade

Adopting a mcmansion approach to selling American goods to China and the rest of the world only serves to alienate people. China and it's people with such a rich culture and history have much to teach us and yes we have much to teach them. I see the free flow of ideas from Amercian corporations to their Chinese production plants, but what do we stand to gain by serving one billion burgers to China? If we start marketing and selling American consumption style goods to China then the resources of the world would be too few, to maintain the staus quo. We have much to learn from one another's culture, from preventative and allopathic medicines to building a sustainable transportation network. If we simply want to serve American goods to a potential Chinese market we must start to put value into our consumer goods beyond their packaging and appeal. That is what is being exported now airplane parts, computers and technology. To fill the empty containers being shippedx back to asia with our mixed recycling and building blocks for finished goods to be assembled in a cheap labor market overlooks the real value of China. It's people have a rich history and we have much to learn and collaberate with one another to build a sustainable future beyond mass consumerism and atomic bombs. Let get a real dialogue rolling about the rich history of organic and sustainable agriculture in China. Lets recognize the value of this way of life before we drive the chinese off the farm only to import GMO food for their hungry.
jakeinpdx —
Lets not get off subject. If you are a farmer there are lots of organizations that will help you export and market your products overseas. There is certification for commoditys to be sold overseas (www.ocia.org) JAS. Local agricultural marketing boards or your oda or state ag rep will direct you. Shipping containers is cheap because most are being returned empty.
jakeinpdx —
Oh My God! I thought you were going to CAN that AWFUL intro song! I have my radio alarm set to OPB, and I swear if you don't get rid of that AWFUL HORRIBLE TERRIBLE HEADACHE-INDUCING theme song, I am going to stop listening!
Ansel in Corvallis —
Before you stop listening, suggest a better song:

http://action.publicbroadcasting.net/opb/posts/list/740409.page
David Miller —
Hmm, why not get your self regruntled and set your alarm one or two minutes later ?
Tom D Ford —
A good suggestion, but in the meantime back to China's consumers, no?
David Miller —
It could be worse. My wife wakes up to Mark and Brian on KGON.
Anton Chigurh —
It seems that China wants to learn about quantity of life from the west and the west could well learn about quality of life from the Chinese.
Tom D Ford —
Yeah, that sure is the qualit of life we should all strive for: oppresive government, unfair trade practices and still a communist politi. Yeah, that is what we want here in America, no right to assemble, no right to surf the 'net, reduce the value of each human.
echolynch —
I was referring to the people not the government, sorry I was unclear on that.

The Chinese had highly developed ideas about quality of life long before the west even learned to bath.
Tom D Ford —
Currently the international art market is very excited about contemporary Chinese art. Is the reverse possible? Is it possible to market northwest artist works to Chinese? Please elaborate on the difficulties and also possibilities of doing this.

JR
rossjerry —
There are tremendous opportunities to trade with China - both incoming and outgoing. China is now Oregon's #3 export market!

Our agency, Oregon Economic & Community Development, works with small businesses to help them navigate the often rough waters of exporting to China. We provide complimentary consulting services and also encourage exporters to utilize the State of Oregon's representatives based in China. International Trade Services staff can be reached at 503-229-5221.
alexa.hamilton@state.or.u —
Part of the "Great Develop the West" campaign in China involves getting self sufficient Tibetan Nomads to participate in the economy by forcing them to come down from the grasslands, selling their herds of sheep and yaks, thereby taking them away from their means of income and heritage. Many become day laborers for a very minimal wage and are much poorer. "Progress" fares differently for non-Han "Chinese."
Christian —
I find dealings with China quite offensive at the moment ---- I go out of my way NOT to purchase products from China and I always hear from store clerks that there are many others who do the same. I find the way that out country has sold itself to China pathetic, especially when we are constantly harping on the dangers that illegal immigrants pose to our country and economy--- I think the danger lies in sellimng out to a huge country that sees nothing wrong with putting a cheap chemical substitute into mouthwash ( thusly KILLING roughly 200 people)The Chinese people and government must be laughing up thier sleeves all the way to the bank at us short sighted americans willing to anything to make a profit and a buck at the expense of many.
susanm —
Yes. http://www.boycottmadeinchina.org
Mel Buckner —
I'm curious what logic would allow the U.S. to engage so heavily in the Chinese economy--encourage trade--while maintaining an embargo against such engagement with a country like Cuba. Since China is a Communist nation with an apparently extensive laundry list of civil rights violations (bolstered by U.S. companies even?) what principals allow free trade with this market and not others? Is it purely Capitalism trumping Democracy?

Bryan
Disjecta —
"Is it purely Capitalism trumping Democracy?"

Duh.
gobytrain —
It is GREED trumping Democracy, just like it has begun to here in America. Don't think the politicians don't get something from the businesses that make mad money from China. The lower standards of Chinese made goods have already killed people, pets and the environment. Now we have government unable and unwilling to stem the tide and correct trade imbalances with China. None of the current career politicians running for the Presidency can or will do anything about it. Mark my words - we could have 5000 people die from goods made in China in a single MONTH and Obama, McCain nor Clinton would do anything about it. Too much at stake too much money in campaign contributions from big businesses and their leaders. If we as a nation are willing to go to war in Iraq at a time we did not have the resources (Afghanistan) so the VP can ensure his family fortune and those of his cronies are increased (Halliburton) than of course we will continue to sell the American public down the river in favor of Communist China. After all, the average American will continue to go to Wal-Mart and buy communist made goods, feed their pet?s tainted pet food and use hygiene products that can kill or maim them. As long as we do that, where is the impetus to change? This whole shows premise of is the NW positioned to capitalize on business in China is foolish, and overly optimistic. America will NEVER balance trade with China without leveling the playing field, which the tyrannous government in Beijing will not allow.
Support Democracy not Greed. Buy American. Write your congressional representatives.
Save Democracy and freedom.
echolynch —
"America will NEVER balance trade with China without leveling the playing field, which the tyrannous government in Beijing will not allow."

Conservatives depend on tyrannous governments to keep labor cheap, and that's why they're called Cheap-Labor Conservatives.
Tom D Ford —
As an attorney that specializes in advising regional businesses on how to enter and survive in the China market, I wanted to state my opinion that the most important thing that a business interested in China can do is to write a good business plan and do thorough due diligence.

The legal system is improving by leaps and bounds, but it is far more preferable to check out your distributor and manufacturers up front than end up in a messy international lawsuit. Having said that, the judiciary in China is more professional than ever, and owners of intellectual property are winning lawsuits to protect their trademarks and patents at a very surprising rate given the media coverage of this issue, but this protection requires U.S. businesses to register their intellectual property early and in accordance with China law.

The greatest demand that I have seen coming from China is the need for healthy food and environmental technologies to help offset the effects of unbridled and deeply polluting growth. As a region, our small and medium sized enterprises can take advantage of this demand by sharing intelligence about how to navigate the China market. One resource where businesses get together to share information in Oregon is the monthly business speaker series in Portland hosted by the Northwest China Council's China Business Network, website www.nwchina.org.

I would also add that when selling to China it is important to note that China is not a single market of 1.3 billion people, but 8 or more separate cultural and economic regions. Each of these regions may require a different marketing and distribution plan.

Finally, the most important person on your team in China, besides yourself as a business owner, is your interpreter, who can make or break negotiations with your business partners, and need to be experienced not only in the languages, but also in business, and preferably in your industry.


Eric van Naerssen
Attorney, Swider Medeiros Haver LLP, Portland, Oregon
Board Member, Northwest China Council
Eric v. —
Anyone who's been to China (or a good-sized Chinatown) knows that where food is concerned, Chinese people yield to no one in their obsession with freshness. When I got to know China in the 1980s, shopping for necessities was done more-or-less exclusively by women. I wonder if now men are doing some of the shopping for the household, and if so what (if any) effect this has had on patterns of consumption. Do male shoppers spend as much time inspecting the ginger root and green onions as the women do? Or do they just see them, ask for three of them, and hand over the money?
richard.s —
it wouldn't surprise me if more men in china are shopping, because due to force abortions, forced sterilizations as well as the 'first son' tradtition, men now outnumber women 3:1.
Mel Buckner —
This statement is false and patently ridiculous. There is a disparity between men and women, but the difference is within several percent, not 300%.

There are good reasons to critique some of China's policies, while keeping in mind our own imperfect policies as well. Spreading falsehoods like this, however, is irresponsible and helps no one.
Eric v. —
I both manufacture in China, and I also sell products to China. I've never had a problem having them sign a confidentiality agreement. However, China has NO problem breeching that agreement.

If there is a market for a product, any product, they will manufacture and sell it regardless of contracts or laws.

It's a very difficult culture and market to work with. The best lesson on understanding it is the Opium War section of the Hong Kong Museum. Understand the Opium Wars, you'll understand China.
gobytrain —
As a product designer I have fond business with China to be a complete nightmare. The design side is wrought with patent infringement and the feeling that concepts and intellectual property are never safe. Production and QC is a complete nightmare and is perfect for a society that does not care if a product is safe or reliable.

I have seen things on production levels that would baffle most consumers imaginations. My first advise to my clients is look everywhere else before selecting China as default manufacturer
tvc155 —
"Production and QC is a complete nightmare and is perfect for a society that does not care if a product is safe or reliable"

While I agree that production and QC is a nightmare, I don't believe that as a society the Chinese do not care if a product is safe or reliable. There is a back lash within China against poorly made food and products.

However, there is no recourse for recipients of products sent abroad that are poor quality or unsafe. That's a HUGE problem for us in America.
gobytrain —
"However, there is no recourse for recipients of products sent abroad that are poor quality or unsafe. That's a HUGE problem for us in America."

But that's a big win for Anti-Regulation American Conservatives!

Conservatives won big in 2007 by allowing contaminated pet food that killed pets, contaminated toys that killed children, and unsafe cribs that killed babies.
Tom D Ford —
Not untrue, but you might want to put that into a context that makes it more meaningful.
gobytrain —
Doesn't anybody consider sustainability?

One billion American-style consumers is a terrifying thought. Even shipping massive quantities of stuff across the ocean spews carbon into the atmosphere.

I know it's good for business, but it's not good for our planet or our grandchildren.
virginiabruce —
If intellectual property rights get undermined and the market buys the lower quality goods, why wouldn?t the rights owner cover her market by manufacturing and selling the lower quality along with the top quality stuff? Offer the choice. People who want and need quality will pay for it.

Wal Mart covers the low quality market in the US and increasingly around the world and obviously they do very well.
Tom D Ford —
"why wouldn?t the rights owner cover her market by manufacturing and selling the lower quality along with the top quality stuff? Offer the choice. People who want and need quality will pay for it."

It doesn't work like that.
gobytrain —
Foreign companies in China in the past have manufactured products with different quality levels and typically export the higher quality products to Western markets, which are then sometimes re-imported into China by individual Chinese travelling abroad. The lower quality products are sold on the domestic China market. This is a cause of some resentment among the Chinese that I have spoken to.
Eric v. —
wow that must be ultra-ultra low quality considering that we are already receiving the low quality goods (what China deems as high).
tvc155 —
Most "high quality" items we buy now are made in China. Sunglasses, and optical glasses are almost exclusively made in China, from Prada to Wal-Mart brands.
gobytrain —
I would like to address the communication problems regarding doing business in China. I am a speech pathologist and director of a speech therapy clinic whose focus is accent modification with non-native speakers of English. I went to China in January to establish a connection with a University to test our ability to provide speech services via the internet. The demand for these services is huge and the technology has now allowed us to offer these services via video/audio conferencing. I have software engineer who has designed a program that allows us to provide recordings & lessons very quickly and with very high quality. Many American companies are willing to provide these services to their foreign employees to increase the ability to communicate effectively. The demand is definitively there from businesses and private individuals to obtain these services.
Shelley Jones
Director
Northwest Speech Center
McMinnville, OR.
Shelley Jones —
Just now, you talked about the human right in China. I don't think attributing everything to human right issues is of any help. The war of ideology is always empty verbal attacks and is seldom fruitful in human history, and it only deepens the gap between the two sides. The fundamental problem in China now is the lack of law and law inforcement. This is something solid and people could work on step by step. Sometimes the words of the leaders or government officials serve as the law, which is of course changing from time to time, and the existent law is enforced in a random fashion. That is why it is so hard to do business there sometimes, and there seemed to be something invisible but powerful out there, which is the vaccumn of the law, a black hole.
COZAAR6 —
http://www.boycottmadeinchina.org

If we bombed Iraq becuase Saddam gassed his own people - why do we do business with the nation that has the worlds worst human rights record?

Here are some reasons why you should not buy from China:

Products Made in Forced Labor Camps
Products Manufactured by the Chinese Military
Products Made by a Disenfranchised Labor Force
Sweeping Repression of All Religions
Nationwide Forced Abortions and Sterilizations
Indiscriminate and Widespread Use of the Death Penalty
Commercial Harvesting of Transplant Organs of Executed Prisoners
Routine Torture of Prisoners
State Psychiatric Persecution of Political Prisoners
Military Occupation and Cultural Genocide in Tibet
Draconian Repression in East Turkestan
World?s Tightest Internet Censorship
Spread of Nuclear Weapons to Rogue States and Terrorists
China Does Not Play by the Usual Rules of Business

Read 'Buying the Dragon's Teeth' by Jamyang Norbu (free on www.boycottmadeinchina.org).
Mel Buckner —
"If we bombed Iraq because Saddam gassed his own people - why do we do business with the nation that has the worlds worst human rights record?"

I can answer that with one word: $
gobytrain —
As one of the participants on the To the Point show this week on doing business in China, I really appreciated the timely and interesting discussion with the other guests and your callers .

As the one Chinese guest, I also wanted to address the questions about describing Chinese culture. As some speakers said, Chinese culture is complex, but it?s also not monolithic (for example, Cantonese, Shanghainese and Beijingers are all Chinese, but exhibit different cultural characteristics as well). Also, it?s important not to confuse ?Chinese culture? with ?CCP (Chinese Communist Party) culture? and the ways of doing business that characterize this ?culture? marked by serious problems of massive corruption, lack of transparency and accountability.

A number of comments were made during the show regarding cheaper goods coming from China. But the recent problems of dangerous toys, tainted drugs and exploding tires exported from China raise the question that the ?cost? may not be that cheap.

Your audience might also be interested in the new issue of our journal, China Rights Forum: ?Human Rights: Everyone?s Business.? It can be accessed online at http://www.hrichina.org/public/contents/article?revision%5fid=48012&item%5fid=47993

Thanks again to the producers for inviting HRIC to participate!

Sharon Hom
Executive Director
Human Rights in China
Human Rights in China —

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