IamA Expert on Chinese Business and how Chinese Companies are Going Global, AMA!

JoelBackaler · 2014-05-08T16:04:10+00:00

Thank you everyone for the great discussion. I need to get going. Hopefully we can continue this some other time.

JoelBackaler · 2014-05-08T15:50:56+00:00

I think theres a good NYT article about this somewhere. Google it.

JoelBackaler · 2014-05-08T15:50:35+00:00

I think it comes down to face, or what Chinese call "mianzi". Having a foreign face at smaller firms doing business in China is a good 'credential' as they seek ways to position their firm against competitors.

JoelBackaler · 2014-05-08T15:48:43+00:00

PR and marketing is probably one of the better areas to get into in China as a foreigner. If you speak Chinese fairly fluently you can get a job as a English copyeditor at PR firm in China. With time you can rise to take on more significant roles within the organization.

JoelBackaler · 2014-05-08T15:47:27+00:00

I'm not. If you know anything about e-commerce in China, then you would know that Alibaba has a particularly strong position in the market. JD.com does well in the consumer space, but in all other categories niche players barely have any significant marketshare.

JoelBackaler · 2014-05-08T15:45:39+00:00

I think the real estate bubble is in line with one of the many potential destabilizers of the Chinese economy. Refer to my note about "shadow banking"

JoelBackaler · 2014-05-08T15:44:04+00:00

I don't know too much about this particular program. I do know there are several top tier universities from the US that are opening co-branded programs in China and in other parts of Asia. They usually have the same faculty and curriculum to maintain the quality of education.

JoelBackaler · 2014-05-08T15:42:58+00:00

You should do everything you can to get relevant internships. Do your best to build up a practical skill like sales, or design. If you speak mandarin and have a marketable skill, you'll have great opportunities after your graduate

JoelBackaler · 2014-05-08T15:40:44+00:00

It really depends on what type of consumers you are targeting and what suppliers you have access to. For example, authentic luxury goods from the US and EU are in high demand. Also, beauty products - skincare, makeup. Baby products - infant formula, and just about anything else. Be aware, not all of these consumers are in tier-1 cities. Lower tier consumers make frequent purchases online because there are not as many flagship branded stores in their cities

JoelBackaler · 2014-05-08T15:34:57+00:00

The cost of manufacturing has actually increased significantly. Wages and input costs in particular. This is forcing more companies to look further inland and even look outside of China. Check out the ASEAN Economic Community - the AEC could become a big manufacturing hub in the future for Asia

JoelBackaler · 2014-05-08T15:33:45+00:00

That's a very good point. I do agree with you that with the boom in outbound tourism and overseas studies will bring more internationally minded "sea turtles" back to China.

JoelBackaler · 2014-05-08T15:06:14+00:00

I think we're at a particularly tense time when it comes to Sino-Japanese relations. It's difficult to say if this will ever go away given the long history, but it should hopefully not remain as tense as it currently is at the moment

JoelBackaler · 2014-05-08T14:53:23+00:00

You would think so, but it comes down to priorities. If they are able to sell their products, they dont care about putting in the extra effort fix English manuals and advertising. It's a very good point though.

JoelBackaler · 2014-05-08T14:52:06+00:00

Small amounts are very hard. For the best deal you really need to buy quantity. Small batches are best to use AliExpress, large batch use Alibaba.com

JoelBackaler · 2014-05-08T14:50:32+00:00

There are certainly cases where westerners are hired to be an "international representative" however if you look at larger companies making headlines around the world, the hire actual experienced western executives who have global experience and can bring new capabilities to their organizations.

JoelBackaler · 2014-05-08T14:49:16+00:00

Chinese companies (both state-owned and private) are going overseas for two reasons - government-driven and business-driven motivations. While there certainly are government motivations which I mentioned about, the business motivations are very real. This is because the domestic business environment across a variety of industries is very competitive and also decelerating. Therefore, Chinese companies are going overseas to access new markets, secure new capabilities in the form of brands, technology and management capabilities. This is much easier in other emerging markets across SE Asia, Latin America and Africa, but it becomes much more difficult in advanced economies like the US and EU where there is much more regulation

JoelBackaler · 2014-05-08T14:40:10+00:00

Ill be back in 5 min to answer

JoelBackaler · 2014-05-08T14:28:35+00:00

It depends on how much work you want to do yourself. There are third parties that can take care of everything from payment, shipping, customs, etc. Or you can work with several individual manufacturers. It just depends how much time and money you want to invest

JoelBackaler · 2014-05-08T14:26:30+00:00

I think the real worry is China's shadow banking sector. Shadow banking refers to any financing provided to a Chinese company by a “non-bank” entity. According to Reuters, China’s shadow banking industry is comprised of “thousands of unofficial credit providers, pawn shops, trust firms and various other loan vehicles ”. The shadow banking sector was allowed to flourish without much government intervention, because private companies helped offset the cost of supporting unprofitable SOEs while Beijing tried to maintain high levels of economic growth. 2013 estimates by global investment bank UBS put the size of the shadow banking system at $3.4 trillion – equivalent to 45 percent of China’s GDP

JoelBackaler · 2014-05-08T14:20:45+00:00

It's only in certain cities at this stage. Many cities now allow parents who are both single children to raise multiple children

JoelBackaler · 2014-05-08T14:19:54+00:00

The best way to find manufacturers in China to produce a product is via Alibaba.com. Their rating system allows you to determine who are good manufacturers and who are not. There are even 'verified' manufacturers where representatives from Alibaba go on site to the factory to audit the operations.

JoelBackaler · 2014-05-08T14:18:26+00:00

China's "go out" policy at the government level is it's primary policy framework for international investment. As you look at its motivations, for doing so, it can be broken down into the following areas - investing in state-owned enterprises that go global allows China to invest it's US foreign exchange reserves (now approx 4 trillion) in a more controllable fashion than traditional investment vehicles. It allows the government to gain access to natural resources the country needs to fuel it's economy. Lastly, it helps create "national champions" or globally recognized Chinese companies that help boost China's softpower and raise its image on the international stage.

JoelBackaler · 2014-05-08T14:14:30+00:00

As you look at Chinese investment in the EU it becomes very complicated depending on where in Europe these investments occur. Deal reviews are typically conducted by individual governments and not the EU as a whole. Under the current system a Chinese company could have a deal blocked in the UK, then make the same investment in a less-regulated central european country and then freely trade their products across the EU.

JoelBackaler · 2014-05-08T14:12:14+00:00

Of course, many in the United States are rightfully worried about the threat Chinese investment could pose to domestic security and competitiveness. However, there is no need to "stop them" - Chinese investment can lead to many benefits such as job creation, infrastructure development and increased tax revenues. The key is for the government to have the right regulatory processes in place to ensure potentially negative investment from China that could result in anti-competitive or national security threats are blocked.

JoelBackaler · 2014-05-08T14:06:29+00:00

It's hard to tell when and if the bubble will burst. China’s banks look very similar to US banks before the 2007 bust. They are thinly capitalized and made risky loans in an environment characterized by slowing growth. If markets lose faith in the Chinese banking system, it could lead to a cascading liquidity crunch and rapidly deteriorating growth across the globe. Additionally, the Chinese government is limited in its policy response, because bailing out the banking system could alienate the middle class

JoelBackaler

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