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Chinese companies face challenges when entering US market

(Xinhua)
Updated: 2009-08-15 17:05

The US market offers many opportunities for Chinese companies but there are challenges they must first overcome, international business experts told Xinhua during the Globalization Partnership Forum in Chicago on Thursday.

"Just like US companies have to understand Chinese culture when doing business in China, the Chinese companies have to understand American business culture if they want to do business in the US," said Kitty Pon, executive vice president at Pactrans Air & Sea.

"They have to find the right market place, do networking and identify the right channels to help them do business in the US," Pon added.

Jim Fox, senior consultant at Royal Roots Global Inc, agreed with Pon's point of view. He said incoming Chinese companies face a totally different governmental system and regulatory scheme.

"They should focus on learning how the system works and working with advisers with proved ability to help them," Fox said.

The forum was organized by George Mui, global business consultant to Minority Business Development Agency at the US Department of Commerce, as part of the Chicago Minority Enterprise Development Week.

The forum helps incoming Chinese entrepreneurs to do business with US companies and minority business owners.

"Our goal is to teach business owners about globalization," Mui said. "We started our globalization program with China and next year we will expand to India, South Korean and other Asian countries."

Regarding the challenges faced by Chinese companies, Mui said: "To do business in the US, Chinese companies have to come here, be here and sit down here with their US counterparts."

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"They can not just send a representative, because, when it comes to the final decisions, it has to be with the business owners," Mui said.

Jack Chen, president of Proman Products, has more than 26 years of experience in US-China business area. He said the most difficult challenge for a Chinese company was to establish sales channels in the United States.

"The products are not a problem. The sales channel is the key," Chen said."In the US, if you can not get into the big chains, you can't achieve the sales volume."

"Having the lowest price does not mean you can get into the big chains," he said. "They need you to understand how their system works."

Chen recently came up with a new business initiative to help Chinese manufacturers enter the US market.

"We recently signed up some Chinese manufacturers and formed a Factory Alliance. We plan to combine the factories and find sales channels here in the US for them," he said. "It is going to be a win-win situation for both Chinese and US companies."