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Get the Most and Best Out Of Your China Business Consultant


By Sara Cheng 

 China is a hot button and probably also one of the most frequent headlines of Aussie media nowadays. Coming along with this are numerous China business consultants emerging like bamboo shoots in all colours and with various language and education backgrounds. Australian businesses eager to jump onto the wagon to do business with China are surrounded and bombarded by China business  seminars, conferences, summits, cocktail functions and then tracked down by all these consultants both during and after functions and events.

 Are these consultants adding value or rather a worthless upfront cost for businesses?

 The answer is yes and no, depending on who you work with and how you work with them.

 It seems cliché but sometimes some businesses do not use common sense when it comes to choosing consultants which are critical for achieving their business success in China. Bear in mind the 3 must-have characteristics of quality China business consultants when you chose whom to work with:

  • China commercial experiences and capabilities: The consultant is not carrying out an academic research for you. They should be able to breathe the depth and breadth of your business, grab the essence of your situation and needs in the shortest timeframe, put this in a broad but practical China business framework and get solutions for you. China is a country full of cultural nuances and operates under a different system. Without systematic business-related education background and extensive personal commercial experiences in China, a business consultant will not be able to possess such knowledge and expertise to navigate you through the system and achieve success in China.

 

  • Chinese language skills-this is common sense. Mandarin is the official language in China. Though there are dialects and accents in various regions, especially in East China and South China, Mandarin is well understood China wide. Without this language skill, your consultant will only obtain 2nd hand (might outdated as well) information when conducting research and will not be able to communicate with Chinese stakeholders on your behalf.

 

  • Most competent communication capabilities: Your China business consultants will communicate with your potential Chinese distributors, agents, manufacturing partners, suppliers, joint venture partners, Chinese government agencies and industry bodies on your behalf. Any small mistakes in such communications may damage your relationships with Chinese stakeholders or compromise the quality of the work they do for you. Assess your consultants’ communication capabilities before you enter into a service agreement with them.

 

Just having a quality China business consultant cannot guarantee you succeed in China. There are 2 must-know rules to make sure you achieve the most through your competent China business consultants:

  • Provide genuine information they require from you: In lots of cases, ethical and experienced consultants can straightaway let you know the ideal model for you to work with China or the potential of your products/services in China if you provide them genuine and comprehensive information on your business strategy, situation and needs. If you have little chance to succeed in China, they may be able to advise you the difficulties upfront and hence save your time, money and resources to work on mission impossible.  

 

  • Provide inputs, monitor milestones and work closely with them: No matter how smart and experienced your consultants are, they do not have the knowledge on your business as you do. Hence do not just leave everything in their good hands. Require progress report, communicate with them regularly, provide feedbacks, ideas and information when required or necessary so that they will refine and tailor the approach during project delivery and achieve the best they can do.

 With a competent consultant and work with them in the right way, you will get the most and best out of your China business consultant and achieve success doing business with China.

For assistance you may get from our China business specialists, please click here or call 1800 505 529 for China business specialists.

 
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Posted by on March 12, 2010 in China

 

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Checklist for due diligence on Chinese Manufacturers / Suppliers


By Sara Cheng

 China has been labelled as the World Factory for more than a decade. Whatever you can think of, it is most likely that you can find it being manufactured in China. Moreover, Internet provides a perfect tool to identify a long list of self-claimed Chinese manufacturers with decent websites in a second. However, foreign companies sometimes find themselves lost in a vast sea of choices, end up with fault products imported from China or work with a “suitcase” company- a Chinese term to describe fraudulent/fake businesses.

The key word here is qualifying. Conduct due diligence on your Chinese manufacturing partners/suppliers before you sign the contract.

Here are some factors you must include in your due diligence on Chinese manufacturers / suppliers:

  • Is the business a genuine business? Obtain copy of their business licence and, if possible, check with local Commerce and Industry Administration Bureau on the legitimacy of the Chinese business.
  • Is the business a manufacturer? Smart Chinese middlemen understand you would like to cut down cost and go directly to manufacturers. Hence they may work on a manufacturing site picture, put it on their websites and claim they are manufacturing what you need. Again obtain the copy of their business licence to check their business scope and/or investigate  with local government agencies/industry bodies directly or through China business consultant.
  • Does the Chinese manufacturer have surplus manufacturing capacity and capabilities to meet your current and potentially growing demand? Check with the staff of the company on their manufacturing capabilities. If you are placing big orders and/or look at working with a long-term manufacturing partner, it is worth visiting the Chinese manufacturers to better assess their manufacturing capabilities.
  • Does the Chinese manufacturer have quality control system in place? Do they have an international quality accreditation? Obtain a copy and check with the authorization organization.
  • Is the Chinese manufacturer a reputable business in the industry and protect clients’ intellectual property? Check with industry bodies, their clients and suppliers and conduct secondary research to find information on the company’s reputation.
  • Is the Chinese manufacturer committed to work with you? If your business is not vital to them, you are at the very bottom of the list when they prioritize orders and hence may delay the production or delivery for your order during peak time.

 

For further information and/or assistance with Chinese manufacturers/supplies selection and due diligence, please contact Sara Cheng, Manager-Greater China, Australian Business International Trade Services. Email: sara.cheng@australianbusiness.com.au or call 1800 505 529

 
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Posted by on March 12, 2010 in China

 

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Peru: From Machu Picchu to Mining and Minerals


Australia’s ties with Peru are growing steadily. After all, it was less than a month ago that Peru made headline news in Australia. Out of 2,500 tourists stranded at the popular tourist destination of Machu Picchu after a crippling mudslide, 170 of them were Australians!  The figure was hardly surprising as 25,000 Australian’s visit Peru every year.

But Machu Picchu isn’t all Peru has to offer Australia. In fact, never before Latin America looked so inviting and Peru is no exception. In 2008-2009 trade between Australia and Peru reached $A 252 million, Australian exports amounting to A$134 million. Australian exports were concentrated in milk and cream, civil engineering and parts, goods vehicles and analysing and measuring instruments.

Economic Performance

Like many of its Latin American counterparts the Peruvian government undertook a lot of privatisation and other market-orientated economic reforms in the 1990s and the affects have now taken hold. Peru has outperformed the rest of Latin America and indeed the rest of the world with impressive annual growth rates that peaked at 9.8% of GDP in 2008 before the onset of the global financial crisis. In the last decade, Peru has promoted trade through investment reforms and a series of bilateral FTA’s.

Mining

With out a doubt the mining and construction sector has been the back bone of Peruvian growth. Peru is one of the world’s top mining countries with large deposits of copper, iron and zinc. 60% of Peru’s merchandise exports are minerals and like Australia, Peru has benefited enormously from the boom in commodity prices.

The down-side of this of course is that Peru is vulnerable to any fluctuations in commodity prices and could experience a recession in the event of a slump. At the moment the GFC has delayed a number of large U.S-backed projects worth billions of dollars and as a result the Peruvian economy has slowed significantly. 

But the strong demand for minerals from China and Asia, as well as the number of large government projects has stopped the mining sector from grinding to a halt. If we’re lucky, numerous future projects should fuel demand for Australian engineers and suppliers of future goods and services. Peru remains incredibly attractive for Australian businesses.

The Peruvian market is no stranger to Australian business. There are several big-name Australian businesses already set-up in Peru including ALS Chemex, Pasminco Explorations, Rio Tinto, BHP Billiton, Burns Philp, Amcor Packaging, Orica and Downing Teal. Australian suppliers have succeeded in the Peruvian market for mining locomotives, slurry pumps and mineral processing control systems.

There is a lot more money to be made. Peru is going to need more mining equipment, gear, machinery, shovels, software, compactors, safety equipment and much more that could potentially come from Australia. We have the know-how, let’s use it. The economic relationship between Peru and Australia has a bright future!

 Amy Doyle – International Market Analyst

For more information or assistance, please contact Australian Business International Trade Services under 1800 505 529 or email Sara at sara.cheng@australianbusiness.com.au.

 
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Posted by on February 26, 2010 in Latin America

 

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Let’s Get Down to Business in Asia!


A new market of 600 million people with an estimated GDP of around US$ 2.7 trillion – an opportunity few businesses can afford to miss out on. Can you?

After coming into effect on January 10th 2010, the Australia-ASEAN-New Zealand Free Trade Agreement (AANZFTA) is the largest FTA Australia has ever concluded. With six out of ten ASEAN markets expected to grow at rates at least double the forecast OECD average in 2010, Asia is leading the global recovery after the economic downturn and there is great potential for Australian businesses to get a piece of the pie.

Why care? If your business is exporting or importing any product (or part of a product) from Brunei, Burma, Malaysia, the Philippines, Singapore or Vietnam, for instance, then you should care. The AANZFTA is the first such agreement covering all sectors, including intellectual property rights, investment, goods and services, ASEAN has ever negotiated.

Among tariff reductions, the AANZFTA includes new safeguard measures for investors, a decrease in restrictions to business travel within the region, as well as greater stability and certainty in the regulatory and legal environment of ASEAN.

Still not sure why this affects you? Let’s say you want to go on a business trip to Manila, maybe to explore future market entry opportunities, but you don’t have an established professional relationship with a local business yet. AANZFTA includes commitments on temporary business entry of natural persons such as service suppliers, goods sellers and investors that make it easier for you to get in and around the country without having to justify every step you are taking.

42 per cent of our total exporter base – around 18,500 Australian businesses – already trade with ASEAN. Make sure you don’t miss out.

Click here for a list of “ASEAN Made Easy” workshops throughout Sydney, the ACT and the Central Coast.

Stefanie Mueller – International Communications Strategist

For more information or assistance, please contact Australian Business International Trade Services on 1800 505 529 or email Ian at ian.bennett@australianbusiness.com.au.

 
 

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Don’t Wait For Asia to Pass you By


Now why do we need yet another Free Trade Agreement (FTA) if we already have bilateral arrangements with pretty much every country in the region? For those who haven’t heard about it yet: Australia has just signed the long-in-the-making Australia-ASEAN-New Zealand Free Trade Agreement (AANZFTA), which introduced comprehensive new tariff commitments and regulations on products, services, investment and intellectual property.

Most people are probably familiar with the problem of the “spaghetti bowl” effect of ever more free or preferential trade agreements between pretty much every country on the planet with every other country in one way or another. These numerous treaties organise trade relations between two or more parties beyond the general WTO rules. Not sure what I’m talking about? Imagine a map of the world with a link between every country in the world with two or more other countries. What you get is a “spaghetti bowl” of links that spread all over the globe and make it almost impossible to distinguish who is associated with whom. 

Why does this matter? The AANZFTA does not do away with the spaghetti issue. But it is complimentary and possibly a little more complete than bilateral agreements. It covers all areas in the one document, including services, goods, investment and intellectual property. Members can choose whether they wish to export a product under the existing FTA’s with specific countries or under the AANZFTA rules. Even though bilateralism often offers even greater tariff reductions and even less barriers, AANZFTA provides exciting new opportunities especially for manufacturing industries that are involved in rather complex supply chains.

An easy example of this is the automobile industry. An “Australian made car” is hardly Australian made. Its intestines and the technology to put it all together would come from a wide range of countries all over the globe. Through AANZFTA’s regional rules of origin Australia is able to profit from tariff reductions according to the origins of its imported inputs. This not only creates a greater market access for Australia, but it also provides incentives for regional members within ASEAN to use inputs from Australia.

If you’re still not convinced about AANZFTA, here is another argument: in the shadow of an economic downturn the greatest danger is for countries to engage in protectionist measures. The AANZFTA opens borders to counteract this trend. ASEAN as a whole is bigger than the EU and can gain some significant influence as a trading bloc in the region. It would be rather foolish for Australian businesses to be hesitant to jump on board this Asian giant. Others won’t be…

Stefanie Mueller – International Communications Strategist

Click here for a list of “ASEAN Made Easy” workshops throughout Sydney, the ACT and the Central Coast.

For more information or assistance, please contact Australian Business International Trade Services on 1800 505 529 or email Ian at ian.bennett.@australianbusiness.com.au

 
 

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Miss the Bus Now and Someone Else Will Have Boarded!


 

If there is an appropriate time to engage in business with India, it is now, according to SP Joshi, country manager for Australian Business International Trade Services.

Joshi cites India’s burgeoning growth (8% to 9% annually) and a strengthening middle class of 350 million people (11% to 12% annual growth) as motivation for Australian companies – but the proviso is that they need to act now.

According to Joshi, India’s growing middle class has taken on the trappings of Western society. While poverty has not vanished, it is still visible on the streets, and the country has an insatiable appetite for everything Western.

“They have the purchasing power to be able to afford a range of products and services that they can’t necessarily find in their own country.”

However, many Australian companies, Joshi believes, have been a little slow to respond to this growing consumption and expansion.

“It’s frustrating seeing businesses fail because they haven’t partnered with the right people who understand the Indian psyche and how business is conducted in the Sub Continent.

“I’ve seen some businesses collapse because they decide to go it alone, and considering India’s rapid growth, are wasting valuable opportunities.” 

To read the full article, click here.

SP Joshi – Country Manager, India

For more information or assistance, please contact Australian Business International Trade Services on 1800 505 529 or email SP Joshi sp.joshi@australianbusiness.com.au.

 

 
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Posted by on February 10, 2010 in India

 

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Are You Considering Outsourcing To China?


Outsourcing your manufacturing should be a strategic decision to enhance your international competency and create scales of economy so that you can harness your financial and human capital to concentrate on your core business and its competitive advantage.

Before deciding, you need to:

  • assess the outsourcing opportunity
  • select manufacturing partners
  • protect your intellectual property
  • guarantee quality supply and,
  • secure a long-term commitment from your manufacturing partners?

 

You also need to consider the following:

Take a strategic… Click here to read the full article.

Sara Cheng – Manager Greater China Region

For more information or assistance, please contact Australian Business International Trade Services under 1800 505 529 or email Sara at sara.cheng@australianbusiness.com.au.

 

 
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Posted by on February 9, 2010 in China

 

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