by Sean McManus
Staff Writer
By the time China was admitted to the World Trade Organization (WTO) in November 2001, companies nationwide had already started thinking about ways to capitalize on a market of 1.3 billion people with an affinity for American culture.
Now, in the wake of China’s push to implement a new liberal trade policy and modernize technology and infrastructure by the 2008 Summer Olympics, businesses in Jacksonville are beginning to take notice of this once prohibitive segment of global buyers.
“What WTO says is whole new industries — like insurance — all of a sudden can set up shop in major cities throughout China,” said Jim Valenti, head of the Asian Pacific Practice Group for Rogers Towers Bailey Jones & Gay. “And with the major construction projects that come with growth in general and the Olympics in particular, Jacksonville is the perfect city to be monopolizing on the changes in China.”
Valenti is leading a group clients to Beijing in March to move forward with strategic alliances between businesses here and in China. And they are hoping other local companies will hear the message loud and clear.
Jacksonville leads the United States in the types of industries that will most impact China’s expansion efforts: construction, insurance, medical supplies, manufacturing, logistics, staffing and transportation. In addition, China president Jiang Zemin has proposed an initiative to have 40 percent of Chinese people owning homes and cars by 2010. And even before WTO, China was experiencing eight percent economic growth, leagues ahead of the global average.
Rogers Towers has already established its own strategic alliance with one of China’s biggest law firms to help clients navigate into a country that not only does business totally differently but is moving at a pace that dwarfs even Internet time.
“We are hoping that everybody can come out ahead,” said Valenti, who is also serving as chairman of the newly formed Chinese Business Education Center, a partnership between FCCJ and the International arm of the Jacksonville Chamber of Commerce.
The Center, whose opening seminar Jan. 10 garnered over 70 local business people interested in doing business in China, has a mission to help smaller businesses who might not have the global reach of a Fortune 1000 company, but can still readily benefit from this new opportunity.
“It’s unheard of the kind of opportunities that are opening up,” said Valenti. “They need environmental consultants just to clean up the areas before they start to build, they need specialty products designed for the power and electrical industries, and they need educational degree programs to train managers for all the new systems.”
According to Valenti, the Chinese government is currently implementing laws and regulations to make a smooth transition to WTO status.
“They are still trying to do their best to protect national businesses and Chinese employees but the scale of their growth is just too massive not to allow for foreign participation,” he said.
China has over 30 cities with a population of at least 10 million people. That means a lot of potential for import and export. And according to Valenti, brands like Coca-Cola, McDonald’s and Levi’s have already created a caché that gives instant credibility to American firms.
So for its part, the Chamber, in conjunction with Enterprise Florida, the group that supports global business initiatives statewide, will facilitate connecting companies in Jacksonville with companies in China.
“It’s called Gold Key Appointments,” said Joanne Emslie-Korn, executive director of the international arm of the Chamber. “We prescreen Chinese organizations who would be good candidates for Jacksonville businesses and then facilitate meetings where we can actually get some work done.”
The Chamber is planning a trade mission to China in June with local business leaders to further explore opportunities. They also work with Chinese embassies and government officials prior to forging alliances to make sure companies here are following proper corporate protocol.
Making sure local businesses follow the proper social protocol while in China is the responsibility of FCCJ professor and media specialist Arthur Chiang, who is spearheading the Chinese Business Education Center from the academic side and knows Chinese culture first hand.
Chiang says that the three primary functions of WTO are to standardize business practices throughout the entire country, to make doing business there more transparent and to lower tariffs by anywhere from 20 to 30 percent.
“WTO will even the playing field,” said Chiang, who moved to the United States from China in 1970. “So U.S. companies will know the rules.”
Chiang will be teaching the language and culture side of the seminars, which has its first class Feb. 21.
Chiang said that that if the three most important words for doing business in the U.S. are location, location, location, then the three most important words in China are relationships, relationships, relationships.
“In the U.S. we go into a meeting and say, ‘OK, let’s get started,’“ said Chiang. “In China, it’s critical to get to know the people you are doing business with first and create a friendship.”
According to Valenti, the Chinese government and the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) — the equivalent of the Department of Commerce — are helpful in publishing websites, white papers and other materials used to help U.S. companies learn about China’s corporate structure and Chinese culture.
Tai Mak, president of T. Mak International, has had his most recent business working in China for about three years. His Arlington company has licensing agreements with all the major breweries and soda companies to manufacture promotional materials such as grills and coolers for tailgates and sporting events.
Mak has a factory in the southern part of China, about an hour north of Hong Kong, that he shares with a U.S. health foods company which makes gelcaps for vitamins.
“Until recently, it’s been almost impossible for small and medium size companies to break into China,” said Mak. “Now with WTO, it’s finally affordable to go over and establish business alliances and feel comfortable about being there.”
Mak said he saves anywhere between 25 and 40 percent in labor costs by having his products manufactured in China. Being that travel costs alone are prohibitive, he likes the concept of companies in Jacksonville coordinating efforts and combining resources when establishing strategic relationships.
“The most important thing is to have the right assistance,” said Mak. “Lawyers and accountants can guide your way. And if you learn a little language and culture, you’ll be in good shape to conduct business.”