benesch attorneys at law ohio foreign commerce association...

BENESCHBENESCHAttorneys at LawAttorneys at Law

Ohio Foreign Commerce AssociationOhio Foreign Commerce Association

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DOING BUSINESS IN CHINADOING BUSINESS IN CHINADOING BUSINESS IN CHINADOING BUSINESS IN CHINA

March 2, 2009



Guest Speaker: Guest Speaker: Allan Allan GoldnerGoldnerPartnerPartnerCo-Chair, China GroupCo-Chair, China GroupCo-Chair, Polymer Group Co-Chair, Polymer Group


With more than 1.3 billion

people.


In the midst of the largest population migration in the history of the world.



The Chinese government’s management ofthis migration is the key to maintaining social stability in China…


(Population in Millions)

Known Forecast

2000 2005 2010 2015 2020

National Population 1265.8 1306.3 1352.7 1400.7 1450.4

URBAN

Urban Population 458.6 561.6 683.3 811.5 963.8

Urban % 36.2 43.0 50.5 57.9 66.5

RURAL

Rural Population 807.3 744.7 669.4 589.2 486.6

Rural % 63.8 57.0 49.5 42.1 33.5


…and creating jobs(more about this later)

is the key to this management.


China is divided intodistinct regions...


…consisting of rural farmland,


…large cities


…and everything in-between.


China is divided intodistinct regions and large cities.


Why have U.S. companies been doing business in and with China?

Because China “opened” to the West (and East) in 1978, and opened some more in 2001.

To buy goods cheaply from Chinese companies and resell them in the U.S.

To manufacture goods in China and sell them in the U.S. and around the world.

To sell goods and services into China.Deng Xiaoping


How do U.S. companies do business in China?

Direct purchases from Chinese factories or intermediaries.

Representative offices. Wholly Foreign-Owned Enterprises

(WFOEs) or Foreign Invested Commercial Enterprises (FICEs).

Joint ventures of varying kinds. Through varying kinds of holding company

structures.


Why does China welcomeWhy does China welcomeU.S. and other foreign investment?U.S. and other foreign investment?

To attract technology and innovation.To attract technology and innovation.

To attract capital to build all manner of To attract capital to build all manner of infrastructure.infrastructure.

To create wealth and prosperity. To create wealth and prosperity.

To create jobs.To create jobs.


What are some of the most important considerations / risks

in establishing a business in China?

Picking the right Chinese partner / key employee(s).

Due Diligence. Market (customers / suppliers). Operational (facilities, processes, work force,

management). Financial and accounting. Legal and regulatory.

● Labor. ● Land Use Rights (including leasing, construction

and environmental). ● IP (Intellectual Property).● Everything else.

Cultural considerations (in connection with courtship, negotiation and everything else)


Picking the rightChinese partner / key employee(s).


Due Diligence.

Market (customers / suppliers).

Operational (facilities, processes, work force, management).

Financial and accounting.

Legal and regulatory.


Legal and regulatory.

● Labor.

● Land Use Rights (including leasing, construction and environmental).

● IP (Intellectual Property).

● Everything else.


Cultural considerations(in connection with courtship, negotiation and

everything else).


What are some of the most important considerations

for success?

● Continuing to pay attention – hands-on.● Ongoing competent training.● Communication at multiple levels.● Appreciation and respect for, and immersion in,

each other’s cultures and business environments.

● Competent accounting, legal andother professional advice.


Questions , please


Thank you for attending!


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benesch attorneys at law ohio foreign commerce association...

Documents

china welcomeu

chinese companies

comdoing business

chinese factories

business environments

competent accounting

foreign investment

market customers suppliers