Transcript Corporate Visits - Philadelphia University

Corporate Visits
China Trip 2003
Corporate Visits
U.S. Embassy (Commercial Affairs Division)
(March 10, 2003)
International Monetary Fund (March 10,
2003)
American Chamber of Commerce (March 11,
2003)
Johnson and Johnson (March 13, 2003)
Liz Claiborne (March 13, 2003)
KPMG (March 14, 2003)
U.S. Embassy (Commercial
Affairs)
Role of Commercial Affairs
A division of the U.S. Department of Commerce
Helps U.S. firms’ exports to China to help increase
U.S. employment
Brief Overview of China
Dynamic place to do business
Substantial and sustained growth
Planned economy with an average growth rate of
7 to 10% annual growth
Issues of WTO
Olympics 2008
Key Concerns
Intellectual Property Rights
Political Issues—Taiwan
Issues of Accounting and Reporting
Lack of sound legal system
International Monetary Fund
Role of IMF
Economic Surveillance
Macroeconomic policy advice
No lending operations
Technical assistance, such as budget
reform, banking reform
Training of local bankers on international
practices and bank management
Outlook for China for 2003
7-8% growth with low inflation
Export growth could slow due to slow
global economy
Problems with the quality of statistics
• Need to follow international standards on data
collection
Mixed signals for growth
National Bureau is doing surveys
WTO Implications
• Reducing tariffs
• Eliminate export subsidies
• Remove quota restrictions and entry
restrictions
Improved environment for FDI
Benefits whole of Asia due to supply chain
links
Key Vulnerabilities
Banking weaknesses
Poor SOE performance
Risks to Govt. Budget
Fixed Exchange Rate
AMCHAM
Role
To facilitate communication between
members of AMCHAM and Chinese Govt.
Does not provide consulting services
Supports American businesses doing
business in China through
– Supply of information
– networking
Information
Several publications that include white papers also
Chapter by chapter look at different industries
Advice and suggestions to Chinese govt. on how to
improve business environs for U.S. firms
Reports are carefully drafted to keep good relations
International Business standards
Local manufacturers also benefit and try to bring their
product to WTO standards
Report Card on China—WTO implementation Process
U.S. govt. causing more problems for U.S. businesses
in China than Chinese Govt.
Networking
Events with speakers from different industries
Events with speakers from U.S. government
Events with speakers from Chinese government
Set up meetings with Chinese government so that
govt. can provide explanations
Smaller manufacturers can walk in and network
with high officials
Problems
Problems in education, especially in
Western China—no real infrastructure
SOEs—almost impossible for them to
become WTO compliant
IPR
Advice—Different Business Model
Johnson and Johnson
Introduction to China as a market
Welcome change for a better future
Background of J&J
Examples of FDI—penetration of
Chinese markets—different strategies
for different divisions of J&J
Jeffrey Lu (finance manager)
Chinese economy
Financial career in china
Financial management at J&J
Opportunities in China
• WTO
• More Demand due to expanding markets
• Globalization
• Highly education and experienced expertise
Challenges in China
• Different style of doing business
• Cultural differences
• Lack or ambiguity of laws and regulations
• People management
Issues in human resource management
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China Labor Market
Integrated Human Resource Management System
Talent Management
Career Path
Challenges in Human Resource Management in
China
– Attracting and Retaining Talent
– Linking rewards to performance and moving away from
entitlement
– Leadership
– Identifying and developing emerging leaders
Liz Claiborne
Overview of Chinese Market
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Northern
Western
Eastern—most advanced economically and well educated
Southern
Shanghai office of Liz Claiborne in 1985
Full service operations
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Product Development
Fabric Development
Product Management
QA center and mini QA centers
Shipping
MIS
Liz Claiborne does not own a factory, but works with
manufacturers to monitor quality standards
Why China for Liz Claiborne?
Excellent price value relationship
Product development possibilities in
fabrics
Short production lead times
Flexible mindset—management style
Embellished, bended, high laborintensive product
Weak issues
Inefficient manufacturing
Lack of sophisticated management
Product development skills
– Must understand market
– Must travel
– Invest money in new products
Work safety and labor conditions
KPMG
Shanghai—massive infrastructure provides
the impression of a modern city, but
• Poor banking facilities
• Poor tax environment
• Does not really facilitate multinational business—at least
not there yet
Emerging market—big competition among the
big four accounting firms
Audit is a big product
China is big geographically, but the
market is segmented
• Multinationals in the market demand top tier
quality service
• Middle (about 1200 Firms listed) don’t really
have the need for top quality consulting
• Makes it very difficult to operate in this kind of
market
Markets are also segmented within service
providers
• Big four
• Local accounting firms
– 90% not quality operations, mainly in tax filing
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Tax evasion a big problem
Labor shortage
High growth market
Mobility is a problem in China
Highly volatile
Poor business ethics—example of Pharmaceuticals