Wednesday, April 20, 1994

Basics of collaboration for Chinese companies in America

Increasing number of delegations from China are visiting the U.S. for the purpose of finding investors or cooperating partners. From my observation, I would guess that most of these delegations have not received very satisfying results so far. To enjoy greater success in future visits to the U.S., Chinese delegations need to keep certain rules in mind: (1) They need to meet the right kind of organizations. (2) When they do meet prospective investors/partners, they need to have the kind of information that would stimulate Americans' interest. (3) In order for this to happen, they need proper preparation. I would like to briefly discuss each of these rules with the hope that my explanation will be useful to groups planning to come to the U.S. in the future.

Meeting relevant organizations.

I have seen visiting delegations announce they intentions to meet prospective American partners by advertising in local Chinese language newspapers! This is a severely limiting approach. Americans of Chinese ancestry make up about 2% of the U.S. population and only a fraction of these regularly read any of the Chinese language newspapers. Many of those that do read Chinese language newspapers are retired and are unlikely to be interested in the delegation.

In order to meet prospects that would have genuine interest in meeting delegations from China, it is necessary to know who these prospects are and contact them well in advance. Since in most cases, it is not possible to identify the prospects in advanced of coming to the U.S., the delegation need to depend on organizations in the U.S. that could make the introduction, arrange the meeting and take care of other local details. Such intermediary organizations could be national organizations, such as U.S.-China Business Council, local organizations such as Asian American Manufacturers Association based in Silicon Valley, or for-profit organizations and individuals that participates in U.S.-China trade such as my organization.

How to Stimulate Interest

It is, of course, not enough just to be able to contact an American organization willing to host a delegation from China. If the American host do not understand the intent of the visiting delegation, they would be reluctant to accept the responsibility of being a host. Even if they are host, they would not know who to invite to meet the incoming delegation and the results will still be disappointing. It is therefore important for the delegation to be able to state their intentions, and that means the delegation must first know themselves as to the purpose of their trip to the U.S.

I believe tightly focussed delegations will have more success than broadly focussed groups. What I mean by this is that groups that know exactly what they want from the visit are more likely to meet relevant parties, engage in more substantive conversations, and leading to constructive future dialog. Delegations generally interested in everything will likely ended up not meeting anyone worthy of future contact and conversation.

For example, if a delegation wants to visit the U.S. to discuss cooperative ventures in automotive components. There are directories and associations serving the automotive industry that the host can use to make up the invitation list. If the group is even more specific, say, having an interest in under-the-hood electrical components, the host can quickly contact the handful of companies in that business and establish an itinerary. On the other hand, if the delegation is interested in "latest advances in high technology," the potential host can only wonder as to where to start in order to organize a meaningful program and itinerary.

Advanced Preparation is Essential

In order to organize a mission with a specific objective, ample preparation in advance of the trip is required. It is not enough for the delegation to go to the U.S. and say "we want to do business with you." The delegation need to describe the business opportunity for which they are seeking an U.S. partner, the advantages the Chinese side is offering and the kind of participation they need from the other side, and the anticipated benefits and future for both partners.

When dealing with Americans the first meeting is the most important. American business executives respond to opportunities and information. They respond poorly to general concepts and they become impatient in the absence of hard data. If at the first meeting, the Chinese side can present a detailed plan that take market, technology, competition, resources and other parameters of a business into careful consideration, the American side will be impressed. If on the other hand, the Chinese side present the impression that they do not know what to do, the American side will be disappointed and the likelihood of a second meeting is considerably diminished.

A lot time and resources are expended to organize a trip to meet prospective business partners. It would be a pity to waste such opportunities because of a lack of preparation. Just what constitutes complete preparation is an important subject reserved for another discussion.

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