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Doing Business with China. Austin Zhao . Special Presentation for SWCA. © PATHWAY TO CHINA 2011. November 10, 2011. Brief Introduction. Pathway to China : Consulting -- China-business services Over two decades of hands-on experience Targeting Clients: US manufactures & distributors .

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slide1

Doing Business with China

Austin Zhao

Special Presentation for SWCA

© PATHWAY TO CHINA 2011

November 10, 2011

brief introduction
Brief Introduction
  • Pathway to China:
  • Consulting -- China-business services
  • Over two decades of hands-on experience
  • Targeting Clients: US manufactures & distributors
business model
Business Model

The Old Way

$

Broker

Chinese

Co.

US Co.

Pathway to China

Chinese

Co.

US Co.

PTC

core offerings
Core Offerings
  • Marketing & Selling to China
  • Direct Sourcing from China
  • Training & Coaching of Chinese Business Culture
china
China

“Let her sleep, for when she wakes,

she will shake the world.”

Napoleon Bonaparte

facts figures of china
Facts & Figures of China
  • Economy: 2nd largest economy in the world (2010)

Source: CIA World Factbook, 2010

  • Foreign Exchange Reserves: about $3.2 trillion (Jun. ‘11)
  • US Debt Purchased: $1.14 trillion (Aug. ‘11), #1 buyer
facts figures of china1
Facts & Figures of China
  • Middle Class: 150 million (2010), exceeding the combined population of the U.K. and France. 400 million more in the next 10 years,
  • Colleges produce: 400,000 engineers and scientists per year, more than U.S, Japan and Germany combined.
  • Largest car market:18 million car sales (2010).
  • Largest Internet users:485 million (end of June. ’11) - more than a third of the entire population.
  • Mobile phone subscribers: 927 million (end of Aug. ’11).
  • Biggest consumer of steel, copper, and cement.
growth in us imports from china
Growth in US Imports from China

23.1%

-12.3%

5.1%

Year 2010

11.7%

18.2%

23.8%

29.1%

21.7%

22.4%

Not including Hong Kong,

4 Bs.

Source: USITCDatabase

growth in us exports to china
Growth in US Exports to China

32.1%

Year 2010

-2.6%

9.5%

18.1%

32.0%

20.5%

22.2%

28.9%

14.7%

Not including Hong Kong,

27 Bs.

Source: USITC Database

us china trade in general
US – China Trade in General

Year 2010

US Statistics China Statistics

US & China – 2nd largest trade partner of each other

Source: USITC Database and Ministry of Commerce of China

driving force of the growth
Driving Force of the Growth
  • Political Stability
  • Economic System Reform
  • The People & the Culture
    • Hard-working & Self-sacrifice
    • Education
    • Discipline
    • Financial Prudence
downside problems
Downside/Problems
  • Increasing gap between the rich and the poor →Inequality
  • Increasing Labor Cost
  • Ageing Population
  • Environmental Pollutions
what we buy from sell to china
What We Buy from & Sell to China
  • Buy
  • Consumer electronics, appliances
  • Computers & components
  • Telephone Sets & Cell phones
  • Toys & games
  • Furniture
  • Footwear
  • Apparel
  • Leather & travel goods
  • Lamps & Lights
  • Plastics Articles 

Sell

Soybeans

Scraps (Metal, Paper & Plastic)

Aircraft & Components

Computer parts, Communication equipment

Chemicals

Cars

Cotton

Plastics

Machinery & equipment, components

Optics & medical equipment

Source: USITC Database

chemical trade with china
Chemical Trade with China
  • Import
  • Rubber Articles (Tires & Gloves)
  • Plastics & Plastic Articles
  • Urea
  • Crude Oils and Oils obtained from bituminous minerals
  • Kerosene-type Jet Fuel
  • Liquid Caustic Soda
  • Paraffin Wax
  • Artificial Corundum
  • Iron Oxides and Hydroxides
  • Sulfuric Acid

Export

Petroleum Coke

Polyethylene

Plastic Scrap

Polyvinyl Chloride

Diammonium Phosphate

Polypropylene

Acetone

Ethylene Glycol

Acrylonitrile

Fuel Oil #5-7 

52.03% of All Chem. Exp.

65.71% of All Chem. Imp.

Source: Ministry of Commerce of China &USITC Database

brief on china chemicals
Brief on China Chemicals
  • More than 36,700 manufactures with 6.9 million employees in the chemical industry
  • # 1 producer in nitrogenous fertilizer, phosphorous fertilizer, soda ash, caustic soda, sulfuric acid, calcium carbide, pesticide, dyestuff, tire, methanol and synthetic fiber
  • #2 producer in ethylene, synthetic resin, synthetic rubber
brief on china chemicals1
Brief on China Chemicals
  • 2nd largest in chemical production
    • 2010: $1.20 trillion in 2010, 15% of whole world chemical demand
  • 2nd largest in chemical consumption
    • 2010: $1.25 trillion, (import: $185.5 billion, 14.8% of total China’s consumption)
  • US Export to China: $17 billion - 33.84% increase in 2010
  • US Import from China: $13.4 billion - 29.8% increase in 2010
challenges risks
Challenges/Risks

A man ordered size 14.5 slipper and got size 1450 (82.7” x 51.2” x 25.6” )

challenges risks1
Challenges/Risks
  • Quality Inconsistency
  • Risk in Advanced Payment
  • Bureaucracy & Corruption
  • Cultural Differences
conclusion
Conclusion
  • Everything is possible
  • Nothing is easy
  • When you are very optimistic, please refer Point # 2
  • Before you give up, please refer to Point # 1
thank you
Thank You!

Austin Zhao

Pathway to China

www.pathwaytochina.com

austin@pathwaytochina.com

Tel: 713-954-4878 Fax: 281-966-1878

Cell: 281-630-6666