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What You Need to Know Before Exporting to China - YouTube
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>> With 1.3 billion people,
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China is the world's
largest consumer market,
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which obviously makes it an
attractive target for exporters.
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That's one reason American
companies generally feel
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that China's still growing
middle class will lead
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to increased opportunities
in a variety of industries,
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especially consumer-based
industries, franchising,
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and the services sector.
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And with an expected 250 million
citizens over the age of 65
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by 2020, elder care is also
seen as a major growth sector.
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With 700 million people online,
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e-commerce is also an
area that's expected
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to grow significantly
in coming years.
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Still, tapping into that huge
market can present challenges
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for U.S. businesses, so doing
extensive research is a must.
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For example, there are
some sectors of the economy
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that the Chinese
government doesn't open
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to foreign competition.
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Also, while the government
has taken steps
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to curtail corruption and
a lack of transparency
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in business practices,
they are still seen
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as significant problems.
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That said, Chinese consumer
spending is expected to triple
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to over $6 trillion
a year by 2020.
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The U.S. Commercial Service is
also well positioned to help,
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with more experts in China
than in any other country.
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What else does your company need
to know before saying ni hao,
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or hello, to new customers?
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And why should a U.S.
company export to China?
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>> Now here's why you need
to be exporting to China.
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First of all, you've got
1.3, 1.4 billion people.
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China is the place to be because
it's where the market is,
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and it's where growth
is being driven.
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You've got so many new consumers
and up and coming middle class
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that are going to be consumers.
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It's transitioning from
an investment heavy
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to a consumer dominated market.
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This is really a unique
moment in time for China.
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So there are a lot of
good sectors in China,
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and it's really going to
be dependent on where.
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If you go to the northeast,
it's a very different mix
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of what sectors are
good than in the south.
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So in the south, in Guangzhou,
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which has traditionally been
the source of manufacturing,
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smart manufacturing, there's
a lot of automation going on.
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There's a lot of efficiency
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and how do you make
manufacturing plants more
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efficient, more productive.
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There's a lot of innovation
going on in the south.
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So we see a lot of IT
going into the south.
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But there are clusters
throughout China.
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Xi'an is a software base.
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Wuhan is an optics base.
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>> When you consider marketing
to Beijing or Shanghai
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or Hong Kong, those cities
are very internationalized
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and the language might
not be a barrier.
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You can use English
easily with some
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of the international traders.
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But in south China, it's
still, the companies
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and entrepreneurs there
are still very localized.
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Most people will use
Mandarin or Cantonese
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as the official language.
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So when first exporting
to China,
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a U.S. FMEs would consider
either hiring an interpreter
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or having a local staff
that speaks the language,
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that will help start
the communication.
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>> China and China's governments
have invested in infrastructure.
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There are 267 airports that
are being built or designed,
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257 green data centers
being built in China.
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So the opportunities are huge.
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Wherever there's a pain in
China, there's an opportunity.
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Education is huge.
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The ability for U.S.
educational institutions
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to attract Chinese
students, two year, four year,
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trade schools, another
opportunity.
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Tourism. So travel and tourism
is a $24 billion a year industry
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from China to the U.S. There's
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about 1.84 million
Chinese visitors
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that came to the U.S. in 2014.
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And in four years,
that's expected
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to be about five million.
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So it's a huge opportunity.
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We also help companies
identify e-commerce platforms.
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We have, for example, an
e-commerce boot camp that we run
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because there are a lot
of different platforms
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where you're looking at
Tmall, Taobao, JD.com.
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We help companies,
and particularly SMEs,
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who are looking to get
into the e-commerce game.
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How do you position yourself?
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What do you have to
know about social media
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and how you're going
to market yourself
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on an e-commerce platform?
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Every, on 9/11, which is
China's version of Black Friday
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after Thanksgiving, it's
called Singles' Day.
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Every Singles' Day
there are $9.7 million
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in sales every minute online.
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There are twice the
number of people that are
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in the United States are
online in China any given day.
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China is very local, and
you have to really dig
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into the weeds to find out
what is your price point?
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How are you positioning
your product?
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Who are your competitors?
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Are you up against a home-grown
national champion or not?
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There are so many factors that
go into can you be successful
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that what my job is,
my and my team's job,
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is to really help
you evaluate that.
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We want to cut your time
to market and get you
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to a yes or no quickly.
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>> One case I met, a U.S.
company used to come to me
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to complain that when
they write emails
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to the Chinese companies
they never reply.
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Actually I'm not
really surprised
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because the reason they
don't reply probably is just
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because they don't
understand your English
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because they only speak Chinese,
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and in China normally we don't
communicate through emails.
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It can normally goes
through the fax
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or if you have a formal
documents to send,
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or you can just call them.
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So it's not the usual way
to doing business comparing
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with the business model in U.S.
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>> In China, it's very
difficult to get the real story,
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and so having someone that's
followed a particular sector
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for 15, 20 years, who has
known the government officials
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from when they were, you know,
more junior position rising
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in the ranks is unbelievable to
use that network on your behalf.
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So three important things
that you need to think about.
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First and foremost
is due diligence,
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due diligence, due diligence.
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Did I mention due diligence?
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We can help as a
baby step on that.
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Know who you're doing business
with, know their connections,
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know the local playing field.
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Secondly, protect your IPR.
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Do the steps you need to
take so we can help you.
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China is a first to file,
not a first to invent.
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If you don't take the steps
to protect your trademark,
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your trade secrets, when you get
into trouble we can't help you.
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And third and foremost is
really know the players.
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Check in with us.
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We are one of many points of
reference, but when you come
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and you do business in China,
do make a point of stopping
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into one of our six offices
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and letting us give you an
update of what we're seeing.
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>> Want to learn more
about exporting to China?
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Explore the China Country
Commercial Guide on Export.gov
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or connect with a U.S.
Commercial Service
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trade professional.
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>> Brought to you by the
U.S. Commercial Service,
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part of the U.S. Department
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of Commerce's International
Trade Administration.
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