The Complexities of Doing Business with China China Business Conference May 23, 2006

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The Complexities of Doing Business with
ChinaChina Business ConferenceMay 23, 2006

• Peter Dempsey
• Manager, Business Advisory Services
• The US-China Business Council

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The US-China Business Council

• The US-China Business Council is the principal
  organization of US companies engaged in trade and
  investment in the Peoples Republic of China.
  Founded in 1973, the Council serves more than 250
  corporate members through its offices in
  Washington, DC, Beijing, and Shanghai.
• See www.uschina.org

• Business Advisory Services (BAS)
• Government Advocacy
• Publications -China Business Review
  -China Market Intelligence
• Programs

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• American Companies Building
• Success in China -
• Significant Issues Remain
• Results of the 2005 USCBC Member Survey

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US Companies Prioritize
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US Companies Profit
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Top Issues

• Intellectual Property Rights (IPR) Protection
• Distribution Rights
• Transparency
• Human Resources
• Standards

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IPR

• Legal environment improving very slowly
• Highly inconsistent enforcement
• Disconnect between concerned senior PRC leaders
  and non-compliant local officials
• Counterfeit exports are a growing serious
  concern
• RD efforts affected by negative IPR environment
• Product liability issues Ex fake brakes, baby
  food

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Distribution

• The ability to sell domestically what you have
  sourced locally or already imported
• DOES NOT include right to import
• Highly important WTO commitment
• Cumbersome implementation process that USCBC
  actively pushed PRC to get right

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Transparency

• How well do you know
• what is going on?
• Regulations
• Market data
• Approval processes
• Relevant authorities

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Human Resources

• Increasingly difficult to recruit and retain
  managerial personnel
• Costs are rising steadily global levels for
  senior local staff
• Signs of over-localization and reverse
  localization
• Workers fewer problems if salary/environment/ben
  efits competitive

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Standards

• Standards setting process is opaque
• Comment periods are short or non-existent
• Multiple regulatory bodies
• Testing difficulties

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What Can You Do?

• Define priorities set measurable goals
• Clear strategy (IPR, HR, Standards, etc. before
  it becomes problem)
• Best investment vehicle option
• 6 Ds
• Understand role of central local govt.

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Food for ThoughtCities with 1 million
population
Thank You!
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US-China Business Council Peter DempseyManager,
Business Advisory Services1818 N St NW, Suite
200 Washington, DC 20036 Tel [phone]Fax
202-775-2476E-mail pdempsey_at_uschina.org
Shanghai Office1701 Beijing West Road, Room
1301Shanghai 200040Tel [phone]Fax
86-21-6288-3841Email info_at_uschina.org.cn
Beijing OfficeCITIC Building, Suite 10-01 19
Jianguomenwai Ave.Beijing 100004Tel
86-10-6592-0727Fax [phone] Email
info_at_uschina.org.cn