2. 1. Importance of doing business in China
• In 2007, Monogram established the first
branding practice in the US dedicated to
creating brands for Chinese companies in the
US market.
• Our clients have ranged from large industrial
to consumer product companies, and they
include Goldwind Wind Turbines, Donghua
Chain, Dongfeng Tractors, Wensli Silk,
Asianbag Dashboard Mounts and GreenShip
Pots & Planters.
3. 1. Importance of doing business in China
• In addition, we have published three national
tracking studies on US consumers’ attitudes
towards China and Chinese brands. These
studies and our branding work for Chinese
companies have been covered by media
outlets worldwide, including Xinhua (China’s
official press agency), Wall Street Journal,
AdAge Global, Industry Week, ARD German
TV, Chicago Tribune, Crain’s Chicago
Business, China Daily USA, The China
Business Network and others.
4. Why is China so important in this market?
• China is New Zealand’s fastest growing
market for international visitors, rapidly
overtaking other key markets to become
our second largest source of visitor
revenue and third largest in terms of
arrivals. In the year ended September
2012, Chinese arrivals grew by 38 percent
to reach 187,000, while expenditure by
Chinese visitors reached $555 million
5. Why is China so important in this market?
• China’s relative importance to New Zealand has been
dramatically increased with the onset of global
economic difficulties, which are expected to suppress
demand from New Zealand’s other long haul visitor
markets for some time.
• The New Zealand Tourism Forecasts for 2012-2018
show that Chinese visitor arrivals are forecast to grow
more strongly than total visitor expenditure.
Recognising the huge potential of China, and the need
to get it right, the Government has embarked on the
China Market Review. This project draws expertise
from the public and private sectors to look at how to
better attract and cater for Chinese visitors, and
importantly, increase the value of the market.
6. Why is China so important in this market?
• Chinese visitors do not stay for very long when they
visit New Zealand. Although in the year ending
September 2012, the average length of stay was 16.6
days (and is forecast to decline), half of Chinese
visitors actually only spend four days in the country.
Categories of tourism spending which are closely
linked to the number of days spent in the country can
be particularly impacted by shorter stays, such as
spending on accommodation and food and beverage.
• The more knowledge we have on expenditure patterns
and market behaviour, the more likely we are able to
influence the current trajectories and drive any change
that is needed to best benefit from this rapidly growing
market.
7. 3. How do you think is the climate for
foreign investment in China?
• China attracted USD 124 billion in foreign direct investment
(FDI) in 2011, second only to the United States. China's
sustained high economic growth rate and the expansion of its
domestic market help explain its attractiveness as an FDI
destination. However, foreign investors often temper their
optimism regarding potential investment returns with
uncertainty about China's willingness to offer a level playing
field vis-à-vis domestic competitors. In addition, foreign
investors report a range of challenges related to China's
current investment climate. These include industrial policies
that protect and promote state-owned and other domestic
firms, equity caps and other restrictions on foreign ownership
in many industries, weak intellectual property rights (IPR)
protection, a lack of transparency, corruption, and an
unreliable legal system.
8. 3. How do you think is the climate for
foreign investment in China?
• China has a legal and regulatory framework that
provides the government with discretion to promote
investment in specific regions or industries it wishes to
develop, and to restrict foreign investment deemed not
to be in its national interest or that might compete with
state-sanctioned monopolies or other favored
domestic firms. Foreign investors report that many
regulations contain undefined key terms and
standards, and that regulations are often applied in an
inconsistent manner by different regulatory entities and
localities. Potential investment restrictions in China are
thus much broader than those of many developed
countries, including the United States.
9. 4. How does the Chinese market impact
the world economy?
• China's growth has witnessed an obvious deceleration from its
double-digit rate of previous years, but it's only been a mild
slowdown from last year, which suggests that the changes in the
economy are under control.
• If growth continues to decline in the world's second-largest
economy, developed economies will be disappointed because they'll
be worried that their economies will suffer from China's slowdown.
• But China should still maintain a growth rate above 7 percent until
2020 and it will continue making stable contributions to the global
economy.
• As for emerging economies, China's weakening demand for
commodities has partly affected their exports of resources, but a
bigger worry for these economies would be if the United States
tapered off its quantitative easing measures, which would alter the
direction of global capital flows.
10. 4. How does the Chinese market impact
the world economy?
• Regionally, China's slowing growth will reduce
prospects for export-led growth. It will also adversely
impact commodity trade with major trade partners.
Take, for instance, the role of Brazil. When President
Luiz Inacio Lula da Silva took office in the early 2000s,
Brazil was ailing and China had just joined the World
Trade Organization. During his two terms, Brazil sold
commodities to China, which supported the mainland's
growth, while allowing Lula to reduce poverty in Brazil.
Today, President Dilma Rousseff is trying to expand
the Brazilian middle-class, but the country will not
benefit that much from Chinese demand.
11. 4. How does the Chinese market impact
the world economy?
• There is indeed an economic slowdown in China and
in other emerging markets, but changes in market
sentiment are what have really astonished me.
• In early 2010, we had a batch of visiting international
investment banks and funds, all of which were bullish
on the Chinese market. No one would listen to the
problems in the Chinese economy we discussed at
that time. (China's GDP growth began retreating from
its high of 10.4 percent after 2010.)
• This year, all of the visiting foreign investors have
been pessimistic about China. They do not believe that
China's economy will not see a "hard landing".
12. 5. What are the five most important things one
should know about doing business in China?
• When working on your business plan, do not
forget about the most important factor: YOU. You
need to take into account your living costs. Rent,
mortgages, and health insurance — these are all
things that don’t pay for themselves. You will most
likely need to cut out all the unnecessary extras
you can live without. Make sure you account for
unforeseen or unexpected expenses by factoring a
little flexibility into your budget for those “just-in-
case” moments. You might even consider taking a
part-time job until things pick up with your new
venture and speak to a financial planner to help
you budget yourself properly.
13. 5. What are the five most important things one
should know about doing business in China?
• China is the world's most populous nation,
with its sprawling 1.3 billion people making
up a highly diverse market.
• Operating in a country with a history of
thousands of years -- and ways of doing
business that go back as far -- it is valuable
to develop insight into China's business
culture and social etiquette to avoid
misunderstandings that could scuttle deals
and harm working relationships.
14. 5. What are the five most important things one
should know about doing business in China?
• Western businesses looking to tap the Chinese
market should be aware of local preferences, and
adapt accordingly.
• Western companies looking to tap China also
need to show a long-term approach that will prove
that they're in the country to stay, analysts say.
• Newcomers wanting to crack China will need to
move, get someone from their organization to
relocate or find an experienced group to represent
them, says Perkowski, who's also the author of
"Managing the Dragon: How I'm Building a Billion
Dollar Business in China."
15. 6. How is doing business in China different from
doing business in Japan?
• "I am delighted to have you here. I am eager to tell
you how successful I've been with the Japanese.
By the time I finish, you'll be so fired up that you'll
be on the next plane to Japan. You'll sweep them
with your Yankee spirit and come back with a
pocketful of purchase orders!"
• What a difference! My first greeting is self-effacing
and apologetic while my second greeting is full of
confidence and optimism. Well, you guessed it. I
had a Japanese hat on for the first and an
American hat for the second.
16. 6. How is doing business in China different from
doing business in Japan?
• So the cultural divide is ever persistent, but the good news is
that it's getting narrower and shallower. It will never disappear
completely because most of us tend to stay within our cultural
boundaries. With my Japanese hat on, I wasn't apologizing in
the way you thought. I might have thought my presentation
was a pretty good one. Why apologize? It's cultural
conditioning. I am expected to apologize.
• On the other hand, with my American hat on, I might not have
been as self confident as I sounded. I probably had my fingers
crossed about my presentation. Being an American, I was
supposed to be positive, dynamic and assertive -- no matter
what. It's what my American culture expects. So, an American
"me" and a Japanese "me" have a different speaking style.
17. 6. How is doing business in China different from
doing business in Japan?
• While there are rebels among us, most of us are more
comfortable with our own heritage, history and culture. We are
uncomfortable and feel threatened in the face of different
cultural expectations. This sense of comfort has a powerful
effect on relationships between the Americans and the
Japanese. Especially in business. For the Japanese, business
is about people and relationships, win-win relationships built
on mutual trust. Of course, business involves selling and
buying and making money. But for the Japanese, good
business follows mutual trust, not vice versa. Friendship
comes before money talk. And mutual trust usually results
from comfort levels they achieve with each other. Politically
incorrect or not, let's face it. It's more difficult to feel
comfortable with people who don't look like us or talk like us.
18. 7. Summarize the growth of the Chinese economy,
investment etc in your own words.
• Chinese economic capabilities originated in Chinese village
life. The Ming-Qing era witnessed a rapid expansion of
commerce. Rural households attended periodic markets to
buy, sell, or barter farm produce, labor services, animals,
fodder, handicraft materials and products, household
necessities, and loans, sometimes on a daily basis. [8] The
reliance of these markets on a complex monetary system that
used copper cash for small purchases and silver coin, ingots,
and bullion to manage tax payments and wholesale
transactions injected the variable exchange rate between
copper and silver into the economic lives of all Chinese. Rural
markets were highly competitive: poor but energetic
individuals could enter the commercial world as middlemen,
earning commissions facilitating local transactions.
19. 7. Summarize the growth of the Chinese economy,
investment etc in your own words.
• Written documents occupied an important position in
economic life. Arrangements for short- and long-term
labor services, for renting, mortgaging or transferring
land, for selling, storing, or conveying merchandise, and
for marriage, adoption, apprenticeship, and division of
family property routinely involved written contracts. The
operation of kinship groups, mercantile and native-place
associations, crop-watching societies and other private
organizations revolved around complex written
arrangements. Both men and women (who often brought
their own funds into their husbands’ households)
participated in village-level economic life. Documents
also permeated interactions with the state.
20. 7. Summarize the growth of the Chinese economy,
investment etc in your own words.
• China's economic system before the
late-1990s, with state ownership of certain
industries and central control over
planning and the financial system, has
enabled the government to mobilize
whatever surplus was available and
greatly increase the proportion of the
national economic output devoted to
investment.
