# Presentation: 721534

## Market Entry Planning

**May 23, 2006**
**Cleveland, Ohio**
**James W. Mayfield **
**Commercial Officer**

## Today’s Discussion

**Broad Market Entry Considerations**
**China Business Information Center**

**Today’s Discussion**

## Introduction

** ****China Business Information Center **
** ****Shanghai 2000 – 2004**
** ****Beijing 1996 – 2000**
** ****Hong Kong starting July 2006**

**Introduction**

## Contradictions

## Contradictions

** ****East meets West**
** ****Growing Gap between rich and poor**
** ****Centrally planned vs. market oriented**
** ****State vs. Local perspectives**

**Contradictions**

## Contradictions

** ****Laws on the books vs. application of those laws (i.e. IPR)**
** ****Hype vs. Reality**
** ****One Country vs. Multiple Markets**

**Contradictions**

## Market Entry 

**There is is a real opportunity, but you have to be smart**
**Filter the Noise**
**Manage sense of urgency**
**Avoid “Chinaforia”**

## Market Entry

**Seek Competent China-savy legal advice**
**6 D’s (Due Diligence....)**
**The Cleveland Rule (FCPA)**
**Do your homework / increase your data points**

**Market Entry**

## Market Entry

**-  Avoid “Guanxi” Brokers **
**IPR ******** build this into your biz plan**
**Get Paid !!**
**What are your top customers’ China business plans?**
**Take stock of your resources (friends, partners, suppliers, etc.) in China**

## Market Entry 

**Representative Office**
**Wholly Foreign-Owned Enterprise **
**Foreign-Invested Commercial Enterprise (FICE) **
**JV / Various Degrees of Partnering**

**Market Entry **

## Hong Kong as a Gateway

-  Ease of Doing Business
-  Rule of Law
-  Free Trade Port
-  Secure banking system

-  Strategic Asia Hub
-  Location
-  Test products for market
-  Regional HQ
-  Closer Economic Partnership Agreement (CEPA)
-  Access to Pearl River Delta – China’s manufacturing hub

**Notes:**
Ease of Doing Business
- Rule of Law & a transparent government (Chinese companies prefer to conduct arbitration in HK)
- No tariffs on most goods 
- Low taxes (17.5% on profits vs. 33% in China)
- Developed infrastructure – educated workforce
- Secure banking system – get paid faster, easier
- Can invoice in HK without goods ever going to HK

Asia Hub
Within six hours’ flying time from Hong Kong, you can sell to 2/3 of humanity!
- Test consumer products on Mainland tourists in HK & Macau
Test business products on 2100 Mainland companies operating in HK
-Almost 3,800 regional HQs in Hong Kong – 1,000 are U.S. regional and local companies
-94% of Hong Kong’s exports are re-exports of third country origin goods,   54% of these go to China
Preferential access to HK service suppliers in 26 sectors through the Closer Economic Partnership Agreement (CEPA)
- Access to Pearl River Delta – highest per capita income in China and reach 50 million people - 3.3% of China’s population
- Hong Kong is the source for 70% of PRD’s FDI

## The Commercial Service 

**Our Mission: **
**help U.S. Companies export products and services**
**Find partners/ customers**
**Information and market research**
**Strategic advice**

## 125 Staff on the GroundYou’ll find us in:

**Beijing**
**Shanghai**
**Guangzhou**
**Shenyang**
**Chengdu**
**Hong Kong**

**125 Staff on the Ground****You’ll find us in:**

## 14 Secondary Cities

**More Market Access. Same Quality Service.**

** ****Dalian**
** ****Chongqing**
** ****Hangzhou**
** ****Harbin**
** ****Kunming**
** ****Nanjing**
** ****Ningbo**

** ****Nanjing**
** ****Qingdao**
** ****Shenzhen**
** ****Tianjin**
** ****Wuhan**
** ****Xi’an**
** ****Zhuhai**

**14 Secondary Cities**

## www.export.gov/china

## Thank you!

**James W. Mayfield**
**U.S. Commercial Service**
**James.Mayfield@mail.doc.gov**
**Tel:  415-705-2282**
**Fax: 415-705-2299**

- www.export.gov/china

- www.buyusa.gov