austin zhao © pathway to china 2011 november 10, 2011 doing business with china special...
TRANSCRIPT
Austin Zhao
© PATHWAY TO CHINA 2011November 10, 2011
Doing Business with China
Special Presentation for SWCA
2
Brief Introduction
Pathway to China:
Consulting -- China-business services
Over two decades of hands-on experience
Targeting Clients: US manufactures &
distributors
The Old Way
ChineseCo. US Co.
$Broker￥
3
Business Model
ChineseCo.
US Co.
PTC
Pathway to China
4
Core Offerings
Marketing & Selling to China
Direct Sourcing from China
Training & Coaching of Chinese Business Culture
5
China
“Let her sleep, for when she wakes, she will shake the world.”
Napoleon Bonaparte
6
Facts & Figures of China
Countries GDP (in trillion US$ ) Annual Growth Rate (%)
Unites States 14.66 2.8
China 5.87 10.3
Japan 5.46 3.9
Germany 3.32 3.5
Economy: 2nd largest economy in the world (2010)
Source: CIA World Factbook, 2010
Foreign Exchange Reserves: about $3.2 trillion (Jun. ‘11)
US Debt Purchased: $1.14 trillion (Aug. ‘11), #1 buyer
7
Facts & Figures of China
Middle Class: 150 million (2010), exceeding the combined population of the U.K. and France. 400 million more in the next 10 years,
Colleges produce: 400,000 engineers and scientists per year, more than U.S, Japan and Germany combined.
Largest car market: 18 million car sales (2010).
Largest Internet users: 485 million (end of June. ’11) - more than a third of the entire population.
Mobile phone subscribers: 927 million (end of Aug. ’11).
Biggest consumer of steel, copper, and cement.
2001 2002 2003 2004 2005 2006 2007 2008 2009 20100
50
100
150
200
250
300
350
400
102
125
152
197
243
288
322338
296
365
Year
Va
lue
in $
Bill
ion
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Growth in US Imports from China
Year 2010
Source: USITC Database
Not including Hong Kong, 4 Bs.
22.4%
↑
21.7%
↑
29.1%
↑
23.8%
↑
18.2%
↑
-12.3%
11.7%
↑
5.1%
↑
23.1%
↑
Rank Country $B
1 China 365
2 Canada 276
3 Mexico 230
4 Japan 120
5 Germany 83
6 UK 50
7 Korea 49
8 France 39
9 Taiwan 36
10 Ireland 34
2001 2002 2003 2004 2005 2006 2007 2008 2009 20100
10
20
30
40
50
60
70
80
90
100
1922
28
35
42
55
65
71 70
92
Year
Va
lue
in $
Bill
ion
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Growth in US Exports to China
14.7%
↑
28.9%
↑
22.2%
↑
20.5%
↑
32.0%
↑
Not including Hong Kong, 27 Bs.
Year 2010
Source: USITC Database
18.1%
↑
9.5%
↑
32.1%
↑
-2.6%Rank Country $B
1 Canada 248
2 Mexico 163
3 China 92
4 Japan 61
5 UK 48
6 Germany 48
7 Korea 39
8 Brazil 35
9 Netherlands 35
10 Singapore 29
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US – China Trade in General
US Statistics China Statistics
Rank Country1 Canada2 China3 Mexico4 Japan5 Germany
Rank Country1 EU2 US3 Japan4 S.E. Asia5 S. Korea
Year 2010
Source: USITC Database and Ministry of Commerce of China
US & China – 2nd largest trade partner of each other
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Driving Force of the Growth
Political Stability
Economic System Reform
The People & the Culture
Hard-working & Self-sacrifice
Education
Discipline
Financial Prudence
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Downside/Problems
Increasing gap between the rich and the
poor → Inequality
Increasing Labor Cost
Ageing Population
Environmental Pollutions
13
What We Buy from & Sell to China
Source: USITC Database
Sell
1. Soybeans2. Scraps (Metal, Paper & Plastic)3. Aircraft & Components4. Computer parts, Communication
equipment5. Chemicals6. Cars7. Cotton8. Plastics 9. Machinery & equipment,
components10.Optics & medical equipment
Buy
1. Consumer electronics, appliances
2. Computers & components
3. Telephone Sets & Cell phones
4. Toys & games
5. Furniture
6. Footwear
7. Apparel
8. Leather & travel goods
9. Lamps & Lights
10.Plastics Articles
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Chemical Trade with China
Source: Ministry of Commerce of China &USITC Database
Export
1. Petroleum Coke2. Polyethylene3. Plastic Scrap4. Polyvinyl Chloride5. Diammonium Phosphate6. Polypropylene7. Acetone8. Ethylene Glycol9. Acrylonitrile10. Fuel Oil #5-7
Import
1. Rubber Articles (Tires & Gloves)
2. Plastics & Plastic Articles
3. Urea
4. Crude Oils and Oils obtained from bituminous minerals
5. Kerosene-type Jet Fuel
6. Liquid Caustic Soda
7. Paraffin Wax
8. Artificial Corundum
9. Iron Oxides and Hydroxides
10. Sulfuric Acid
65.71% of All Chem. Imp. 52.03% of All Chem. Exp.
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Brief on China Chemicals
More than 36,700 manufactures with 6.9 million employees in the chemical industry
# 1 producer in nitrogenous fertilizer, phosphorous fertilizer, soda ash, caustic soda, sulfuric acid, calcium carbide, pesticide, dyestuff, tire, methanol and synthetic fiber
#2 producer in ethylene, synthetic resin, synthetic rubber
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Brief on China Chemicals
2nd largest in chemical production 2010: $1.20 trillion in 2010, 15% of whole world
chemical demand
2nd largest in chemical consumption 2010: $1.25 trillion, (import: $185.5 billion, 14.8% of
total China’s consumption)
US Export to China: $17 billion - 33.84% increase in 2010
US Import from China: $13.4 billion - 29.8% increase in 2010
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Challenges/Risks
A man ordered size 14.5 slipper and got size 1450 (82.7” x 51.2” x 25.6” )
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Challenges/Risks
Quality Inconsistency
Risk in Advanced Payment
Bureaucracy & Corruption
Cultural Differences
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Conclusion
1. Everything is possible
2. Nothing is easy
3. When you are very optimistic,
please refer Point # 2
4. Before you give up, please refer to
Point # 1
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Thank You!
Austin Zhao
Pathway to China www.pathwaytochina.com
[email protected] Tel: 713-954-4878
Fax: 281-966-1878 Cell: 281-630-6666