Transcript Doing Business in the Pacific Region

Doing Business in Asia
William Chu
International Trade Division
North Carolina Dept of Commerce
2010 April
China
Beijing
Shanghai
Macau
Guangzhou
Shenzhen
Taiwan
Hong Kong
Canton Fair
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China’s No. 1 fair
15,000 products varieties on display
40% of China’s newest product in exhibit
22,320 exhibitors @ 12 million ft2 floor space
188,170 buyers
55,927 display booths
Brought in US$30.5 billion businesses @ show in 2009
53 years in history of making
Interzum Guangzhou 2010
China & India on
Global Recovery Driver Seats
Global Real GDP
(annualized quarterly growth rates)
Global
Developed
Economies
EMERGING
GLOBAL
U.S.
U.K.
Euro Area
Japan
DEVELOPED
Emerging
Economies
China
Source: International Monetary Fund
India
Brazil
CHINA
China &
ASEAN
How to Enjoy Zero Tariff?
Meet one of the following conditions:
• Products are completely
originated in China;
• The value of the materials
coming from other than
China and ASEAN countries
is less then 60%; or
• Products are produced by sufficient
processing the materials coming from
other than China and ASEAN countries.
How Does ASEAN Cope with
This Sweeping Change?
• Not so 10 years ago, the trade balance titled to
ASEAN.
• Today: –
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Chinese competition has growing louder
A direct competition with Chinese firms will be deadly
A lower cost of capital
A lower wages in China
A limited accountability to shareholders
Chinese investments are sweeping in ASEAN
ASEAN becomes a popular place for Chinese investments
ASEAN in general accept Chinese quality with low pricing
Opportunities & Challenges
In Asia Markets
Emerging Asia Market
• Economic expansion policy in general.
• Export trade returning – especially the demand from China
market which is helping the region to flourish
• Rising inflation with low household’s debt pushes up
consumers’ spending.
• Rising exports in Vietnam made them the fastest GDP growth
in the 1st half of 2010.
• Indonesia is the largest nation in ASEAN and accounted for
60% consumer spending. The growth will get stronger due to
a boom in domestic investments.
• Malaysia has a strong and stable economy and
it is one of the fairly mature market in ASEAN.
Risk Factors in Emerging Market
• Full recovery is not yet proven.
• Majorities depend on the export markets
aboard which are facing slow recovery and
not yet quite normal.
• Government’s economic stimulus can’t last
forever.
• Increased the consumers’ spending to correct
global recovery is not an easy task.
• Increased risk from capital asset
bubble.
Huge Market Potential in the Asia
Emerging Market
Opportunities in Asia Emerging Market
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Rising middle-class consumers
Cities migration
Modernization in retail sector
Sell goods directly to retailers or at help of
distributors
• Opportunity in building brands
Market Entry Strategies
• Don’t dump products that do not sell well.
• Introduce quality products similar in here.
• Products with good features and reasonable
price fetch success.
• Created branded product to standout from
domestic goods.
• Provide warrantee and after-sales services
especially to electronic items.
Challenges and Risk Factors in the
Emerging Markets
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Stability in government and fiscal budget
Bureaucracy, corruption and protectionism
Infrastructures not sound
Retailer sector immature
Purchasing power is limited
Developing Chinese Market
• Major cities in China’s coastal region has a faster
phase of recovery.
• Government’s stimulus packages to help rural
development benefited the purchasing power in the
2nd and 3rd tiers cities.
• The stock market and housing price surged
increased demand for medium- to high-end goods.
• Market the trendy products to meet the need of
affluent class.
• Consider using several market channels for
penetration – franchise store is a popular one.
China’s Super-Rich Population
Hits 825,000
Thank You!
William Chu, Representative
State of North Carolina Asia Pacific Office
Room 805-6, Tesbury Center,
28 Queen’s Road East, Wanchai, Hong Kong
Tel：852-28650555‧Fax：852-25270819
Email：[email protected]