Corrections or additions?
This article by Bart Jackson
was prepared for the March 13, 2002 edition of
U.S. 1 Newspaper. All rights reserved.
China’s Capitalist Cousin
Fifteen years ago, the trade routes into China were
fraught with unwieldy committees, endless rounds of seemingly social
meetings, and the fabled Chinese bureaucracy, little changed in some
ways since the days of the emperors. But today things are different.
The gateway has flung wide onto Hong Kong — China’s can-do,
capitalist
laboratory. Here, at last, is an Asian port that operates in the good
old American business fashion. Or does it?
Profitable protocols into the East will be the subject of the seminar
“How to do Business with Hong Kong,” on Thursday, March 14,
at 8 a.m. at Mercer County Community College. This workshop is one
of several breakfast meetings designed by the MCCC Global Business
Center to help small and medium size businesses establish markets
abroad. Lewis Ho, director of the New York office of the Hong
Kong Trade Development Council, will cover the more macro, global
aspects of entering this new economy. William Webster will
provide
specific advice based on his years in Hong Kong working for Paris
Technologies and several other firms. Cost: $25. Call 609-586-4800,
ext. 3639.
“The company extending its products or services into the East
will find really no major differences — cultural or legal —
in dealing in Hong Kong,” insists Ho. “Sole proprietorships,
partnerships, and corporate unification all operate in the same
way.”
Bringing it even closer to home, Ho notes that many Hong Kong firms
already have working ties to the Trenton area and are seeking new
partners.
Information technology, software of all sorts, environmental products,
and electronic components and services currently stand highest on
both China and Hong Kong’s most wanted list. Ho feels that firms in
these industries should have no trouble establishing a presence in
Hong Kong.
“One of the most practical, primary tools,” says Ho, for
anyone
planning an Eastern exchange is the Hong Kong Trade Development
Council
(TDC). Admittedly, Ho is a bit prejudiced. He joined the TDC back
in l980 when, he says, “markets everywhere were a lot
different.”
He worked to advance Hong Kong’s business interests first in the
Middle
East, then in other cities around the world, and now he has taken
over the American desk in New York.
The optimum way to mine the TDC’s wealth of information is to study
at length its astoundingly exhaustive website — www.TDCTrade.com
Relatively friendly, this site is a library in itself. Up to the
minute
webcasts, divided into trade topics such as sporting goods, jewelry,
and electronics fill readers in on China and Hong Kong’s financial
relationships around the globe.
Additionally, the Pacific economic scene is available on the site,
offering HK Exchange quotes, market profiles, and analysis. Getting
to the heart of it, the “Starting Up A Business” section lists
full advice and documentation specifically categorized for anything
from a sole proprietorship to a fully expanding corporation.
Documentation
is spelled out, and statutory requirements are quoted chapter and
verse. The site even offers a checklist of required certificates.
“Of course our crown jewel,” says Ho, “is the Trade
Development
Center’s extensive databank of trading partners.” Thousands of
companies, cross categorized by size, product, expansion needs, and
investment capabilities, are ready to be linked with American firms
seeking to profitably combine. Since its inception in l966, the TDC
has linked thousands of suppliers, partners, and customers.
William Webster agrees with Ho that ever since the l997 reversion,
Hong Kong has made the gateway into China wider. “But,” he
adds, “the differences are very real and you are not just going
to slide in like an eel through a swamp.”
As a long-time international trading port, Hong Kong currently stands
midway in the business style between the Western and the Chinese.
“China,” Webster explains, “remains very much in the grips
of GuanXi — an older Eastern business protocol in which through
a series of introductions, favors and time, your partner gets to know
(and trust) the content of your character.”
While traders in Hong Kong are more likely to care about how much
you can deliver, rather than who you are, some of this more personal
approach underlies most dealings. “This often frustrates the hasty
American deal maker who storms in with a thick contract and no time
in his hands,” says Webster. “But this more personal approach
to doing business can hold great advantages.” Frequently the
excessive
(and costly) spelling out of nitty-gritty obligations can be forgone.
Secondly, once you are in the door, your reputation is made and other
business partners will tend to trust you.
Webster himself has long experience with developing this personal
business style. In l986 he bought a one-way ticket to Hong Kong and
began looking for any trading opportunity. He found it with an
import/export
man who dealt in Armani shirts and other upscale textiles. In l994
he tossed in his lot with Exxon in its Pacific Rim efforts. Shortly
afterwards, Webster founded his own Hong Kong firm, which in l997
became affiliated with the global software developer Paris
Technologies.
Today he not only oversees that firm’s technical development, but
acts as China/Hong Kong liaison, making frequent trips to the East.
Having observed American firms taking the Oriental plunge with varying
success over the past 17 years, Webster offers the following caveats:
Be patient. Expect to invest in Hong Kong for the longhaul. Building time in the East is slow, because it is necessary toestablish your name.Bring gifts. Some local governments or businesses mayrenege on payment. Also, gift giving is customary, and goes beyondthe typical scope of gift exchanges among business people in theUnitedStates. Recently the Independent Commission against Crime (ICAC) hascracked down on many of the more blatant abuses of this practice.Go with deep pockets. Prices are high in Hong Kong, andbusiness entertaining tends to be expensive. “While the Chineseare very prestige conscious,” says Webster, “it may provemore effective to entertain in fine restaurants than set up an officein a prime real estate area.”Be culturally aware. Write all manuals and directionsheetsin both English and Chinese. Zippers, like autos in China, run onthe opposite side. “You really must go there and stay andstudy,”suggests Webster.Beware quotas. Most manufacturing has moved out of HongKong proper, and north into China. Some has moved into Sri Lanka andCambodia. All these nations have definite quotas as to what quantityof which type of goods a business can export. Thus, you could beawardeda magnificent contract, fulfill it, but not be able to move your goodsout of the country.Yet despite all the cross-cultural problems, China and its newgateway offer an ever-widening market. Just within the past two yearsit has become possible to establish a wholly-owned United Statescompanyin China. But as Webster warns. “If you are planning to make thebig leap, best to begin by standing firmly in Hong Kong.”— Bart JacksonNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
