International Business Development
WHY ON EARTH WOULD WE DO BUSINESS WITH THE CHINESE?
February 8th, 2010
by Canada Export Centre
Perhaps we should ask ourselves - Why would the Chinese want to do business with us and how working with China can profoundly improve your business?
Does this comparison look healthy? It’s actually worse than it looks.
79% of Canada's exports go to one country. In comparison, over 70% of Australia's exports go to 10 countries. This is sighted as one of the major contributors to the fact that Australia has not seen the recession.
Some might say Australia is closer to China than Canada is, but comparing the shipping time from Newcastle (Australia) to Tianjin (China) and Prince Rupert (Canada) to Tianjin (China) the difference is only 6 hours.
SO WHY DO THE CHINESE WANT TO DO BUSINESS WITH US?
Canada represents a solid, safe business and investment opportunity outside of China.
Canada has a great Reputation
This fact is not to be understated. The past few generations have seen Canada as China-friendly, because Chinese citizens have been taught in school that “Canada is our friend” and America is not.
This sentiment was developed during the revolutionary war in the 1930’s because of a Canadian: best known as China's favourite doctor. Dr Bethune's major medical contributions were in thoracic surgery and battlefield medicine. In China, Dr. Bethune, or 'Bai Qiu-en' as he's known there, is nothing less than a national hero. Though Dr. Bethune only spent a year among them, Chairman Mao never let the Chinese people forget this man left a life of privilege in Canada to work among the poor and war-ravaged of the world. School kids still memorize Mao's eulogy and visitors still flock to his grave in Shijiazhuang. This reputation was only strengthened when Pierre Trudeau, in 1970, became the first western leader to engage in diplomatic relations with China.
Build Sustainable Business
Many Chinese business people today own manufacturing companies in China. They have suffered the Western ‘Walmart’ mentality that was really developed by corporate America which is “relationships mean nothing – a cheaper price is everything”. Imagine if you had a choice between being a contract manufacturer for an American company that you know is going to find a cheaper producer at their next opportunity OR had an opportunity to invest in a real partnership with a NA company where you could participate in its profits, contribute to lowering some of its manufacturing costs, carry that brand into China and build that market in concert with your partner. Which option would you choose?
Legacy for Family
Many Chinese families have their children going to school in Canada and, because of the one child system in China; the parents want to set up a business for this child in Canada.
It is for these reasons some very well-heeled Chinese business people are coming to the Canada Export Centre to locate solid, trustworthy Canadian business partners.
PERHAPS YOUR PRIMARY FEAR IS…
Threat to IP and Branding
If you say I do not want to do business with China, because they will copy me you might want to rethink your strategy. Anyone could buy your product through any number of channels and copy you anyway. You can’t stick your head in the sand and hope they don’t get a hold of your product. Most Chinese companies want what goes along with a partnership – branding, credibility, and continued IP development. A powerful partner in the market has better clout with respect to dealing with knock-offs than you have so, in the long run, a JV in China can contribute to protecting yourself in the market.
If you want to build your business in China the best approach is to find a good partner. They are willing to invest in you, they understand the market, and as noted in the points above, they are motivated.
Advantages of a good Chinese Partnership:
• Protect IP in the long run
• Access to cash to help you grow your business at home (can be an option)
• Access growing market with partner that knows the market
MORAL OF THE STORY…
Get moving – get a piece of the action!
Canadian companies, for the most part, are seen as too conservative. We are afraid something could go wrong. We are always afraid the Chinese will take advantage of us. In our experience, it has to do with the quality of your relationship, we have rarely, if ever, known the Chinese to behave poorly with a true partner.
Canada Export Centre has three offices in China, is very well connected to all levels of government which is critical to success, and a division dedicated to helping Canadian firms access strong trustworthy Chinese partners to help foster long-term sustainable growth to the advantage of all parties involved.
To learn more about how we can help, please contact:
Danny Ng, Business Development Manager at email@example.com
Canada Export Centre (Calgary Office)
#283, 328 Centre St SE
Calgary, Alberta, Canada T2G 4X6
Canada Export Centre (Head Office)
400-602 West Hastings Street
Canada V6B 1P2