U.S. Chamber Builds Trade Bridges

While China, in many ways, reintroduced itself to the world during the Olympic Games last month, many small and midsize U.S. companies were already familiar with opportunities there. China-with 1.3 billion citizens, or 20% of the world's population-looks to U.S. companies to help fulfill its huge growth-driven demands for energy, infrastructure, aviation, and a variety of other areas.

"China is not just part of the supply chain anymore; it's a destination for U.S. goods" says Leslie Schweitzer, senior trade advisor for TradeRoots, the U.S. Chamber's grassroots trade education program.

However, challenges persist, including a regulatory environment that is not always transparent, unfair trade and investment practices, market access limitations, exchange rate concerns, intellectual property theft, and product safety fears. 

The Chamber's Asia Department works closely with the U.S. and Chinese governments to foster a strong environment for bilateral trade and investment. Further, the American Chambers of Commerce (AmChams) in China serve as a networking base and resource for U.S. businesses operating in or looking to enter the China market. 

The Chamber, with support from state and local chambers in the United States and from the AmChams, regularly organizes China trade and business education programs. Says Jeremie Waterman, Chamber senior director for Greater China, "We're about opening doors in China for small and medium-size American companies and making sure they get the support they need once they've entered the market."

Parlec Finds Success in China

Machine tool accessories made in this Parlec Inc. factory are shipped to China.

While the prospect of exporting to China might appear daunting to some small and medium-size U.S. companies, Parlec Inc. in Fairport, New York, has carved out a place for itself in that market by being flexible and having a clear objective.

Parlec exports machine tool accessories to China for final finishing and sales, keeping its technology and innovation in the United States. The company employs 200 people worldwide, 160 of those in the United States. Sixty jobs have been added since the company expanded its operations into China in 2002. "We have up to 10 job openings in our U.S. operations right now as a direct result of our exports to China and Europe," says Michael Nuccitelli, owner and director of Parlec.

According to Nuccitelli, small and midsize companies should have the "right motives for entering China-to take advantage of its 1.3 billion consumers. A lot of people ran to China because it was a low-cost country, and they had visions of cutting their product costs in half."

Companies considering China must make sure that there is a demand for their products, and that they can be easily adapted to serve that market. Parlec converted its machine tool accessories-including screws and hardware used to service the machines-from an inches system to a metric system, which is used in China. Language was another major challenge. All product information including sales brochures, user instructions, and installation and service manuals are converted into Chinese.

Be prepared to deal with red tape, Nuccitelli points out. Parlec struggled with regulations on packaging types and materials, the precise format for paperwork presented at customs, and obtaining a value-added tax certificate as a wholly owned foreign enterprise.