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Doing Business in China 101

Posted By stephenjackson On November 25, 2013 @ 2:31 pm In Uncategorized | 4 Comments

By: Iris Kapo, International Trade Specialist, US Commercial Service

China street [1]Specialists from the Commercial Service can help you overcome challenges in the market and reach specific goals. Below are some tidbits of knowledge that stemmed from this year’s American Association of Clinical Chemistry (AACC) tradeshow [2] in Houston, Texas. Three Commercial Specialists from Beijing, Chengdu, and Guangzhou participated in the USDOC’s Showtime Program [3]. They met one-on-one with U.S exhibitors at the show and discussed each company’s unique challenges and goals in these diverse regions of China.

Below are some things to keep in mind when trading with China.

  • Where Are We. China is the world’s fourth largest country [4] after Russia, Canada, and the U.S., so it’s unlikely that one distributor or business partner will be able to successfully serve the entire country. The U.S. Commercial Service has five offices in China [5] and one helps you identify a local partner. Our offices can identify ideal distributors or business partners through our Gold Key Matchmaking Service [6], for instance, and offer several other services [7].
  • The Price is Right. Companies concerned with adequately pricing their product for the China market can rely on local partners to guide them through an appropriate pricing structure that will be successful for both parties. The SBA pricing model [8] worksheet is also a good resource to help you get started.
  • Building Relationships. In Chinese culture, building a face-to-face relationship is necessary before any business or decision making is even conducted so frequent visits are a must to ensure success. It’s important to identify a distributor or to attend key trade shows within their industry, such as the China International Medical Equipment Fair CMEF [9]. In many cases, doing business in China will require more than a one-time visit to identify your distributor. To identify trade shows/events within your industry, in specific countries, please visit our Trade Events Database [10].
  • Medical Devices. All imported medical devices must be registered with the China Food and Drug Administration (CFDA) before being sold in their market. In addition to medical devices, the CFDA will also absorb food safety-related regulatory functions previously handled by other ministries. For medical devices, the CFDA has a comprehensive system for product registration and inspection, which includes product type testing and factory audits. Medical devices are divided into three classes (Class I, II, III) depending on levels of risk, similar to but stricter than that of the USFDA. Clinical trials are required for registration of Class III and some Class II medical devices. The product registration process normally takes from one to three years and registration must be renewed every four years.
  • Bring a Friend. If you’re making a trip to China, our overseas colleagues are happy to meet with you while you are there. You have to contact your local U.S Export Assistance Center [14] (USEAC) to let them know to reach out to the specific Foreign Commercial Service office in China on your behalf.

Those were some of the most important pieces of guidance provided to the most frequent concerns voiced by U.S exhibitors. If you’re ever attending a trade show, locally or internationally, we urge you to contact your local USEAC to find out if we are offering our free services, such as Showtime. These programs are a great supplement to your attendance and will add value to your participation at the show.

The U.S. Commercial Service (USCS) is the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration. U.S. Commercial Service trade professionals in over 100 U.S. cities and in more than 75 countries assist U.S. companies competing in the global marketplace. For more information on USCS visit www.trade.gov/cs/ [15].

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4 Comments To "Doing Business in China 101"

#1 Comment By Prezentacja Maturalna On December 15, 2013 @ 5:10 am

I am from eastern Europe, my company import from China Furniture articles. We started cooperation in 2006. The prices was really good, but now growth about 200%…
China isn`t as cheap country as most people think, but it is big market to sell our goods, but we must remember that China main class is demanding client.

#2 Comment By Jeremy D McVicar On January 28, 2014 @ 2:15 pm

Having exported to China for seven years, I feel that the “Building Relationships” section of this article is very important. Indeed, our company made several trips to China to establish a solid trust that would later solidify our trust in one another. Trust is a huge factor for Chinese companies, particularly when they are importing your product for the first time. Once you do start exporting you’ll find that competition is stiff and Chinese are excellent negotiators whereas price is concerned. Typically, a visit to the factory in China (if you are exporting raw-materials) followed by a nice dinner out is customary. Don’t forget to bring a gift (wine, or chocolates – just ensure it is something made in America) and ensure you develop a relationship with the factor Manager as well as the CEO/President of the Chinese company. Like most companies, Chinese business owners want to know that you intend to develop long-term relationships. Finally, don’t be afraid to inform the Chinese customer of ways they might adapt your product/raw materials to facilitate different markets or needs.

#3 Comment By James On January 29, 2015 @ 6:40 am

Nice thought, I think china is big country for selling our good, most of the people are selling our product in this market. Many people are follow some books how to invest in china, I have also know about the one book that is Doing Business in Australia for china.

#4 Comment By Stock tips On November 4, 2016 @ 7:13 am

Amazing article! i like the article its so interesting to read and informational.

Article printed from Global Reach Blog: http://globalreach.blogs.census.gov

URL to article: http://globalreach.blogs.census.gov/2013/11/25/doing-business-in-china-101/

URLs in this post:

[1] Image: http://globalreach.blogs.census.gov/files/2013/11/China-street.jpg

[2] American Association of Clinical Chemistry (AACC) tradeshow: http://www.aacc.org/events/annual_meeting/pages/default.aspx

[3] Showtime Program: http://export.gov/illinois/tradeevents/medica2013/index.asp

[4] fourth largest country: https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

[5] five offices in China: http://export.gov/china/contactus/index.asp

[6] Gold Key Matchmaking Service: http://export.gov/salesandmarketing/eg_main_018195.asp

[7] other services: http://export.gov/china/services/index.asp

[8] SBA pricing model: http://www.sba.gov/sites/default/files/SBA%20Export%20Business%20Planner.pdf

[9] CMEF: http://www.chinaexhibition.com/trade_events/3124-CMEF_Autumn_2013_-_The_70th_China_International_Medical_Equipment_Fair.html

[10] Trade Events Database: http://export.gov/eac/trade_events.asp

[11] US Patent and Trademark Office: http://www.uspto.gov/ip/iprtoolkits.jsp

[12] International Trade Administration: http://www.stopfakes.gov/business-tools/country-ipr-toolkits

[13] International IP Advisory Program: http://www.stopfakes.gov/business-tools/international-ip-advisory-program

[14] local U.S Export Assistance Center: https://new.export.gov/centers

[15] www.trade.gov/cs/: http://www.trade.gov/cs/