MESSAGE FROM SIVA YAM:
PEARLS BURIED IN THE STRAW –
OPPORTUNITIES IN THIS CHALLENGING MOMENT
Happy New Year! We wish you good fortune, good health, and happiness for the
Year of the Golden Bull and many years to come!
As we are welcoming the Year of the Golden Bull, we would like to wish you a very successful year. The Chinese have proven themselves to be the ultimate optimists. Perhaps, this is the single most important reason why China is so resilient. Despite the many natural disasters, internal conflicts, and foreign aggressions, China remains intact and continues to prosper. The optimism imbedded in the culture is reflected in an old Chinese saying: “When there are crises, there are opportunities.”
If the Year of the Rat represented a year that was full of unprecedented, unforeseen crises, then the next few years would represent themselves as full of opportunities that are equally unprecedented and unforeseeable.
OPPORTUNITIES FOR U.S. COMPANIES
Restructuring and Repositioning of Chinese Companies
The abrupt changes in government policies in China, the sudden collapse of the global economy, and the dramatic drop in export sales have forced many Chinese to think outside of the box: export is no longer the only way to prosperity. Hundreds of thousands of factories in Guangdong and Zhejiang have been closed. Now, many of those surviving factories are looking to reposition themselves, align with strategic partners, and identify products that they can market domestically. Despite the slowdown of the economy, the consumer market in China continues to grow. For instance, some of the biggest international retailers such as Walmart, Tesco, and Carrefour are going ahead with ambitious expansion plans in China. Chinese companies are looking for products, technologies, brands, and concepts to market and partners to strengthen their companies.
Opportunities in Second- and Third-Tier Cities in China
While first-tier cities such as Shanghai and Beijing will continue to be the center for economic development in China, second- and third-tier cities tend to offer more opportunities as they are in the process of being developed. The nature of the “peasantry economy” in China has resulted in a reverse migration back to the less developed area. The sudden influx of millions of workers, who have lost their factory jobs in Guangdong, Zhejiang, and other provinces, to the less developed rural areas has created unprecedented demand for social and structural infrastructures. Coupled with the allocation of stimulus funds from the Central Government, second- and third-tier cities continue to make progress and offer opportunities to U.S. companies.
OUTBOURND FOREIGN DIRECT INVESTMENTS
The drop in the real estate market, the tight cash position, and the decrease in valuations of many U.S. companies have enticed the appetite of the impulsive gambling nature of Chinese entrepreneurs and investors. “Buy Low and Sell High” and strategic acquisitions of technologies and brands are driving outbound investments of China.
U.S.-CHINA CHAMBER OF COMMERCE
To assist U.S. and Chinese companies in capturing these opportunities, USCCC has expanded the organization. Beginning 2009, we will focus on working with U.S. and Chinese companies to take a proactive approach to identify business opportunities, generate quality deal flows, provide match making services, and expand our network of investors from both the U.S. and China. We will travel to China at least once every six weeks for two to three weeks and various parts of the US. In addition, USCCC has elected and reelected some of the most prominent business leaders to serve on its Board of Directors. It has also appointed several outstanding professionals and businessmen as Advisors; strengthened its regional offices in China including the hiring of an Assistant Mayor for its Zhejiang Office; entered into a series of co-operative agreements with associations and regional governments such as Shanghai Foreign Economic and Trade Investment Company and Changzhou Municipal Government; broadened its reach to other regions through strategic alliances with some of the most prominent families and leaders in their respective areas; expanded its offering of services through alliances with and outsourcing to strategic partners; and improve USCCC’s website.
ASSISTANCE TO U.S. COMPANIES
Expanding into China
Based on individual products and cases, USCCC will work with various companies and sales organizations in China, on the ground, to evaluate the market potential and then provide marketing and support to US companies. This will help to eliminate the necessity for them to set up a distribution network in China, which can be very expensive, tedious, time consuming, and inefficient. It means that USCCC will strive to help US companies find distributors and manufacturers’ reps in China. Specifically, U.S. companies with the following characteristics are poised to expand into China
· Proprietary or unique products and/or technologies
· Name recognition, in the industries which they are competing
· Competitive pricing relative to the positioning of the products
· Ability to be in full compliance with U.S. export restrictions
Outsourcing to China
USCCC will provide match making services, logistics support, and when possible, assistance in negotiation, quality control, and supervision in shipment. In conjunction with its local offices and partners, USCCC will help US companies to manage cost by minimizing unnecessary trips and the number of staffs in China in this unusually challenging moment.
Setting up Operations and Partner Search in China
Through its staff, Directors, advisors, and co-operative relationship with various governments and organizations, USCCC will help identify Chinese partners based on geographical and industrial criteria. Its relationship with various governments and the understanding of the process in setting up operations in China will help to cut red tape and move expeditiously. The reduction in lead time will help US companies operate more efficiently and manage cost more effectively.
Attracting Foreign Investments
On a case-by-case basis, USCCC will work with regional governments in the US to attract foreign direct investments. Within certain limit, we will assist US companies in their capital formation and strategic acquisition process.
Others
USCCC is negotiating with various hotels and airlines to offer competitive rates for its members to lower their traveling costs. It has also streamlined its visa and passport processing to manage its costs so that the savings will be passed onto its members. On a regular basis, it will reevaluate the products, services, and programs so that USCCC can operate more efficiently and can be more relevant to the success of companies that are involved in U.S.-China business. A new “For Member Only” area will be on our website whereby members can download selected articles and proceedings from our events. We intend to host an “On-Line Meeting” whereby members can be briefed on the current development of US-China business, deal flows and new ideas.
QUESTIONNAIRES
The more that we know about your company and your goals, the better we can serve you. Please complete the following survey and send to my attention in confidence. The information will be used by us to take a proactive approach to promote your business interest. Upon receipt of your completed survey, we will review the relevant information, and when appropriate, we will discuss with you further. Please note that there will not be any initial cost for us to keep your information on file; however, subject to certain conditions and progress, there might be a fee associated with services rendered.
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