BENESCH BENESCH Attorneys at Law Attorneys at Law Ohio Foreign Commerce Association Ohio Foreign Commerce Association cleveland columbus philadelphia wilmington shanghai benesch, friedlander, coplan & aronoff llp www.beneschlaw.com DOING BUSINESS IN CHINA DOING BUSINESS IN CHINA March 2, 2009
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BENESCHBENESCHAttorneys at LawAttorneys at Law
Ohio Foreign Commerce AssociationOhio Foreign Commerce Association
cleveland columbus philadelphia wilmington shanghaibenesch, friedlander,coplan & aronoff llpwww.beneschlaw.com
DOING BUSINESS IN CHINADOING BUSINESS IN CHINADOING BUSINESS IN CHINADOING BUSINESS IN CHINA
March 2, 2009
BENESCHBENESCHAttorneys at LawAttorneys at Law
BENESCHBENESCHAttorneys at LawAttorneys at Law
Guest Speaker: Guest Speaker: Allan Allan GoldnerGoldnerPartnerPartnerCo-Chair, China GroupCo-Chair, China GroupCo-Chair, Polymer Group Co-Chair, Polymer Group
BENESCHBENESCHAttorneys at LawAttorneys at Law
BENESCHBENESCHAttorneys at LawAttorneys at Law
BENESCHBENESCHAttorneys at LawAttorneys at Law
BENESCHBENESCHAttorneys at LawAttorneys at Law
BENESCHBENESCHAttorneys at LawAttorneys at Law
With more than 1.3 billion
people.
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In the midst of the largest population migration in the history of the world.
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The Chinese government’s management ofthis migration is the key to maintaining social stability in China…
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(Population in Millions)
Known Forecast
2000 2005 2010 2015 2020
National Population 1265.8 1306.3 1352.7 1400.7 1450.4
URBAN
Urban Population 458.6 561.6 683.3 811.5 963.8
Urban % 36.2 43.0 50.5 57.9 66.5
RURAL
Rural Population 807.3 744.7 669.4 589.2 486.6
Rural % 63.8 57.0 49.5 42.1 33.5
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…and creating jobs(more about this later)
is the key to this management.
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China is divided intodistinct regions...
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…consisting of rural farmland,
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…large cities
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…and everything in-between.
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China is divided intodistinct regions and large cities.
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Why have U.S. companies been doing business in and with China?
Because China “opened” to the West (and East) in 1978, and opened some more in 2001.
To buy goods cheaply from Chinese companies and resell them in the U.S.
To manufacture goods in China and sell them in the U.S. and around the world.
To sell goods and services into China.Deng Xiaoping
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How do U.S. companies do business in China?
Direct purchases from Chinese factories or intermediaries.
(WFOEs) or Foreign Invested Commercial Enterprises (FICEs).
Joint ventures of varying kinds. Through varying kinds of holding company
structures.
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Why does China welcomeWhy does China welcomeU.S. and other foreign investment?U.S. and other foreign investment?
To attract technology and innovation.To attract technology and innovation.
To attract capital to build all manner of To attract capital to build all manner of infrastructure.infrastructure.
To create wealth and prosperity. To create wealth and prosperity.
To create jobs.To create jobs.
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What are some of the most important considerations / risks
in establishing a business in China?
Picking the right Chinese partner / key employee(s).
Due Diligence. Market (customers / suppliers). Operational (facilities, processes, work force,
management). Financial and accounting. Legal and regulatory.
● Labor. ● Land Use Rights (including leasing, construction
and environmental). ● IP (Intellectual Property).● Everything else.
Cultural considerations (in connection with courtship, negotiation and everything else)
BENESCHBENESCHAttorneys at LawAttorneys at Law
Picking the rightChinese partner / key employee(s).
BENESCHBENESCHAttorneys at LawAttorneys at Law
Due Diligence.
Market (customers / suppliers).
Operational (facilities, processes, work force, management).
Financial and accounting.
Legal and regulatory.
BENESCHBENESCHAttorneys at LawAttorneys at Law
Legal and regulatory.
● Labor.
● Land Use Rights (including leasing, construction and environmental).
● IP (Intellectual Property).
● Everything else.
BENESCHBENESCHAttorneys at LawAttorneys at Law
Cultural considerations(in connection with courtship, negotiation and
everything else).
BENESCHBENESCHAttorneys at LawAttorneys at Law
What are some of the most important considerations
for success?
● Continuing to pay attention – hands-on.● Ongoing competent training.● Communication at multiple levels.● Appreciation and respect for, and immersion in,
each other’s cultures and business environments.
● Competent accounting, legal andother professional advice.
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BENESCHBENESCHAttorneys at LawAttorneys at Law
Questions , please
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Thank you for attending!
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www.beneschlaw.com
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