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Business ResourcesAmerican Trade CentersA new US government initiative helps smaller US companies find their way into Chinaby Virginia A. Hulme An agreement signed last year between the US Commercial Service and the China Council for the Promotion of International Trade (CCPIT) makes it easier for small and medium-sized US enterprises (SMEs) to do business in China. The agreement essentially expands the Commercial Service's Gold Key Service, available in more than 80 countries, to 14 more cities in China. Previously, the service was available only through the embassy in Beijing and in the four cities where US consulates are located. Now the service is also available through the partnership with CCPIT in Dalian, Liaoning; Chongqing; Hangzhou and Ningbo, Zhejiang; Harbin, Heilongjiang; Kunming, Yunnan; Nanjing, Jiangsu; Qingdao, Shandong; Shenzhen and Zhuhai, Guangdong; Tianjin; Wuhan, Hubei; Xiamen, Fujian; and Xi'an, Shaanxi. The AgreementWith rising pressure in the United States to "do something" about trade with China--namely reduce the trade deficit by boosting US exports to China--the US Congress mandated that the Commercial Service, an agency under the US Department of Commerce's International Trade Administration, expand its offerings in China and set up a network of American Trade Centers (ATCs). To fulfill this mandate, the Commercial Service has formed a partnership with CCPIT, a quasi-governmental PRC trade promotion agency. Under an agreement signed in July 2005, the two parties will promote US exports and suitable trade opportunities by sharing client contact information, distributing information about trade events, and cosponsoring trade seminars at which US companies can promote their products and services to potential Chinese customers. Making it easier for SMEsUS SMEs frequently find it difficult to break into the China market. China is so vast and different from the United States that many small companies are not sure require large investments in time and resources that can be difficult for smaller companies to muster. In China, the Gold Key Service helps US companies identify and arrange meetings with producers, trade associations, government officials, bankers, consultants, lawyers, US businesspeople in China, and potential agents, distributors, and customers at relatively low cost. For firms that find travel too expensive or time consuming, a videoconferencing option is available. The Gold Key Service can also help US companies:
As part of the Gold Key Service, companies also receive briefings from embassy or consulate staff on China's business environment, including tips on doing business in China and an introduction to a wide range of information resources. Though embassy and consulate staff do not usually accompany firms to meetings, a US government representative generally attends meetings arranged by CCPIT. The partnership with CCPIT not only makes these offerings available in 14 more cities across China, but also allows US SMEs to tap CCPIT's deep knowledge of local markets, companies, and other players--a highly valuable resource. Useful ContactsUS Department of Commerce Export Assistance CenterTel: 1-800-USA-TRADE China Business Information CenterCommercial Service ChinaBeijing31st Floor, North Tower Chengdu4 Lingshiguan Lu Guangzhou14/F China Hotel Office Tower ShanghaiShanghai Center, Suite 631 Shenyang52 Shi Si Wei Lu Between the program's inception in July 2005 and mid- October 2006, the Commercial Service had served 40 companies through the CCPIT partnership program. These 40 companies visited all of the ATC cities except Kunming. During the same period, the Commercial Service served roughly 200 companies through the regular Gold Key Service. Some of the missions were industry-specific and covered public transportation, auto parts and components, and shipping and logistics. Recent missions have included manufacturing and the scrap recycling industry, as well as trade missions from Alabama and Montana. The service frequently takes groups to areas of China less frequented by foreigners to meet with agents and distributors. For instance, one trip to Dalian focused on logistics, and companies met with PRC entities in rail, warehousing, and retail. According to Commercial Service data, the CCPIT partnership program has a preliminary success rate of 29 percent. This means that of the 68 missions, 20 have been reported as successes by one side or the other. Of these, 18 have been verified by US clients, and as CBR goes to press, the Commercial Service is obtaining verification for the remaining two. Thirteen of the successes are for the sale of US products and services, while the remainder includes the establishment of sales offices and the signing of distribution agreements. Ensuring qualityTo ensure that companies receive the same quality of service from CCPIT as they would from the Commercial Service, the Commercial Service has hired five US contractors--one at each of the US government posts in China--called commercial representatives. These representatives serve as a point of contact for CCPIT's international trade professionals and, in most cases, accompany companies to meetings. The representatives also review the work of CCPIT staff, who will have received three training sessions from the Commercial Service by the end of this summer. Attention to the quality of services is underlined by a money-back guarantee. (As of mid-October 2006, no one had requested a refund.) CCPIT has also agreed to maintain the confidentiality of business information. Mutual benefitIt is clear that the arrangement benefits the US side, but what is the incentive for CCPIT--whose main mandate is to promote PRC exports--to promote the sale of US products in China? According to the Commercial Service, there are several. First, at the local level, the program allows CCPIT to help local Chinese businesses find the products they are looking for and obtain new business, particularly in cases where the US company is looking for an agent or distributor. Second, in line with overall PRC policy to develop the interior, the program brings US companies to key cities in central and southwest China. Exposure to international companies introduces international business practices, which helps companies and cities in the interior modernize faster than they otherwise would. Third, where trade leads the way, investment--and thus new jobs, a high priority of the PRC government--usually follows. Finally, boosting US imports to China could help reduce trade tensions with the United States. CCPIT also has an incentive to provide quality services--it does not get paid until the customer says it is satisfied, according to Commercial Service officers. How to get startedTo begin the process, companies should either contact their local US Export Assistance Center or go to the Commercial Service's China website, complete the applicable forms (accessed through www.buyusa.gov/china/ en/gks.html), and submit them to the Commercial Service office in Beijing. Lead time is about six weeks from the date the Commercial Service receives the application. The fee for this service is $685 for the first day in each city and $340 for each additional day. This price covers a full day of meetings with relevant officials and prescreened companies, but does not cover interpreters, translation services, or transportation. Though the Commercial Service can arrange these services upon request, companies must pay these service providers directly at market prices.  |
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