China Business a Simple Substitute for Global Sourcing

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China business can be rewarding than global sourcing provided critical issues regarding manufacturing and import and export are sorted out quickly.

Sourcing from China need not be a complicated issue unlike global sourcing, at times, can be. In fact, China business, import/export included, has never been easier than it is today. Global sourcing implies searching for cost effective and better ways of doing business. It is obvious that import and export from China offers this powerful opportunity and has descended as an effective business tool to cut down costs and gain competitive edges.

Sort out Issues before Engaging in China Business for Import and Import Needs
Global sourcing managers in China business need to understand the rapid nature of churning in the labor force there. Those that couldn't scale up their import/export from China business because of their inabilities to find suppliers, complain about suppliers not meeting their quality expectations. Global sourcing companies must not turn a blind eye to working conditions in manufacturing facilities—especially concerning the humanitarian and environmental issues, critical issues in China business. Eventually, this turns out to be an exercise to assess the manufacturing environment both quality and quantity wise, in order to recognize the challenges of engaging in China business for your global sourcing needs. This, if not tackled, must serve as an eye opener as Wal-Mart and Perry Ellis found out that just the combination of low cost and high productivity means little value for global sourcing from China and can hardly be a preferable option.

Global Sourcing Turns into Import/Export from China Business
A major chunk of global sourcing appears to be turning into direct import and export from China business due to the potential labor savings. Despite cost advantage, import/export companies can't afford to forget the huge startup costs as they initiate their China business.

Points to Ponder Ahead Of Import and Export from China
Import/Export or global sourcing managers in China need to list out points that concern their long term interests.
1. Risks and rewards associated with import/export from China business rather than global sourcing
2. Cost of setting up global supply chains even for import/export from China business sources
3. How different are China business supply chain enablers from global sourcing supply chain managers? How good are their support and organizational structures?
4. Can you expect mechanisms for coordination, periodic reviews, global sourcing contracts, language translation etc?
Exclusively depending on China business relationships and guanxi that are instinctively personal, it only takes you a little further for it neither globalizes nor is it transferable. Sorting out issues initially rewards your China business endeavors as MNCs have found China business to be doing to them.




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How to Run an Import and Export China Business-In the Right Way

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If you are planning to venture your import and export China business, plan beforehand. Make sure you have adopted effectual business strategies to make your China business a successful business. Below are explained three formulas to make your China business a hit. Include these three ways when you weave plans to land up your import and export business in China. 

You Must Distribute Your Products Directly

In order to make it big with an export based China business, conducting a market research is very essential. Even before you start finding a Chinese partner dealing in import and export, emphasize much in carrying out market researches. Market research and due diligence must be your first concern while entering into a China business. Look for companies which are aware of import and export related problems to arise in a China business.

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Import & Export Policies Boost Business To Business (B2B) Transactions in China

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Did you know that the prevailing import/export policies of China present business opportunities to start import/export business to business on your own provided you are organized and raring to make it in global sourcing arena? Import/export opportunities galore with the booming online business to business boosted by China's Import and Export Policies.

China's Import/Export Policies and Its Effect on B2B and Global Sourcing
Reforms pertaining to China's import/export policy have largely been focusing on improving import/export but the pace of advances in the import/export has been comparatively slow although barriers like export/import planning and quotas, which affected global sourcing, are removed.

Import/Export, B2B and Global Sourcing Policy Reforms
The recent economic emergence has positioned China as preferred global sourcing destination, thanks to bold steps with regards to import licensing. Pre-reform import/export policies regarded foreign trade as necessary evil and global sourcing, a strict taboo, regulated by a few FTCs. Trade reforms are linked to broader economic reforms and have two major components:
1. Decentralization of policy making authority
2. Price rationalization supported by market forces
As a result, prices are determined by market forces, which is great news for business to business (B2B) which trades in the now deregulated foreign exchange.
The scope of import & export as well as global sourcing now falls with local authorities without having to go through the rigid FTCs, which as of now have become efficient. The mandatory policy planning had changed protocol into more liberal, non-binding guidance boosting increased business to business (B2B) and global sourcing activities.

Incentives to Import/Export and Overseas B2B
Reforms to foreign exchange systems reinforced the much awaited boost to overseas business to business and import and export transactions. Regulated foreign exchange rates and tabooed imports presented little incentive to Chinese B2B and import/export operators in the pre-reforms era rendering earnings on par with domestic regardless of overseas trading; worst- B2B companies did not enjoy freedom to retain foreign exchange earned by them. Regulated RMB also meant global sourcing companies paid unnecessary rates.

The real boost to international business to business came by in three phases through foreign exchange reforms.

1. Reforms with planning framework (1979-86) allowed for foreign exchange retention by B2B and devaluation of RMB

2. Dual foreign exchange system (1987-93) allowed market controlled currency swapping which resulted in significant devaluation of RMB, welcomed by both global sourcing and business to business community

3. Foreign exchange rate re-unification (1994 onwards) more or less stabilized RMB on the basis of stupendous reserves




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China- King of Global Sourcing

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Rapid developments in business-to-business summits for import-export trade have made utilized terms akin to price analysis and the quantity of goods ordered without giving much thought to management of resources and commercial traditions. A practical approach is needed for B2Bdealings along with a vital study of past negotiations. The present scenario of import-export can be easily assessed by a detailed study of its past history, thereby solving many of the current trade problems. The validity of a professional opinion on B2B negotiations can be assessed by a planned and systematic approach. This will lead to improved all-round decisions in business-to-business deals.

International traders respond to B2B negotiations when they are faced with difficult B2B proposals from private suppliers, wherein they have to act quickly. Therefore an automatic or computerized B2B negotiation outcome is a must to burst the B2B monopoly.

Flexible B2B is essential for systematic International global sourcing. It is a myth that global sourcing will tend to increase costs. Electronic trade hugely benefits many business partners across the world. It has led to elasticity in structures and possibility of more communications by its successful implementation. International companies have contributed largely in B2B import-export from Countries like China. In spite of restrictions in import-export of particular products under environment and wild life act, the international companies have flourished in China by almost 36% share in the trade market. B2B deals are becoming increasingly popular in the global arena and business societies. Business-to business negotiations needs to take a tougher stand on global issue pertaining to trade and commerce like foreign trade policies, trade bargains and traditional aspects. B2B negotiation is an Art as well as Science for dealing with major issues, which requires arriving at possible understandings. B2B negotiation is thus the most strategically answer for global sourcing of import and export dealings. But it nevertheless needs the knowledge of global culture for successful import-export ventures in international markets. It is highly frustrating and annoying when source partners cannot arrive at a mutual and logical conclusion. Then B2B negotiations take much longer time in such cases. This is indeed one of the disadvantages of business-to business negotiations.

Legal hassles are being eliminated for smooth flowing import-export trades into developed countries like UK and US. Even imports and exports from China are less held-up for security purposes; diversion of Chinese trade to other parts of the world is a major concern for United States. Imports of food products like seafood, diary and poultry foods are facing SPS complexities. China is the undisputed king of global sourcing for import and export of various products. Restrictions over Chinese goods are being relaxed subsequently. This has helped China business to a great extent. B2B has helped Chinese exports and imports in a positive way. But there is concern on the rising prices of import and export goods that could harm millions of traders who are riding high on China’s global boom.




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Laws of import/export of goods to China

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China has made great strides in the world of B2B or business to business and hence the import/exports of goods and services and global sourcing of commodities is on the rise. There is tremendous scope for the development of B2B or business to business dealings in China and with the increase in the flow of goods and services across the border in the form of import/export and global sourcing, government found it necessary to make stringent laws and regulations in order to govern the same so that only standard goods and services get exchanged across the border.

Of course this does not mean to say that these regulations are very recent but have been in existence for nearly two decades now. As early as 1989, Chinese government laid down rules which were adopted at the sixth meeting of the standing committee of the Seventh National People's Congress and dealt with import/export of goods and hence in a way it covers global sourcing and B2B or business to business deals as well. The regulations are spread in over six chapters which vividly lay down regulations which need to be followed for import/export of goods and hence provide a basis for related activities like B2B or business to business and global sourcing deals.

It would not be appropriate to go into the legal details and implications of each of the chapters. In fact article 1 of the first chapter basically outlines the mission these regulations as follows – "This Law is enacted with a view to strengthening the inspection of import and export commodities, ensuring the quality of import and export commodities, protecting the lawful rights and interests of the parties involved in foreign trade, and promoting the smooth development of China's economic and trade relations with foreign countries". Of course it goes without saying that it also covers B2B or business to business dealings and global sourcing activities within its scope as well which involved cross border transactions of goods and services.

The rest of the chapters lay down provisions for inspection of goods which are meant for export as well as which are being imported from foreign countries. No goods which are not of the requisite standards can go through the import and export process. Thus in a way this regulates the B2B or business to business and global sourcing deals as well where goods change hands over national frontiers of the country. Thus we see that B2B or business to business deals are well governed in China and carrying out of import/export and global sourcing activities requires fulfilling of stringent conditions which ensure the quality of goods that cross her borders both ways.




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Is China a Risky Proposition

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We are all familiar with the ever growing and expanding economy of China which has literally created waves in the global circles, especially with people not expecting such a rise from a nation which was hitherto known to be quite conservative in her policies regarding open market policies and so forth. Having said that there is little reason to doubt that in the times to come the Chinese nation would go leaps and bounds and would reach a place in the global arena where it would be christened to an economic superpower. The increasing role of B2B or business to business dealings and the ever growing import/export and global sourcing figures are a witness to this statement. Nevertheless not all experts hold such an optimistic view of the distant future of B2B or business to business scenario or the import/export and global sourcing picture. There are several reasons for this doubt and these shall be discussed in brief in this article.
One of the concerns of the doubting Thomases dealing with B2B or business to business deals and carrying out import/export and global sourcing is that safety and quality of products might not be as good as other developed nations of the world say the countries of the European Union or the United States of America. Of course these fears cannot be said to be totally baseless as there have been a few incidents where sub-standard products were found which do not adhere to the high quality of the western world, yet it would be wrong to view the whole Chinese market in that light. There are very stringent rules and regulations which govern various business and commercial activities in China be it B2B, business to business, import/export or global sourcing transactions and such incidents are only few and far between.
Even otherwise the Chinese entrepreneurs and executives are well aware of the fact that to survive in the B2B or business to business market and to gain import/export and global sourcing orders in the long run, it is imperative that quality and safety standards are strictly adhered to, otherwise the profits from B2B or business to business activities and import/export and global sourcing deals are going to be short-lived.
Despite these challenges and hurdles people and organizations globally are having increased confidence in the Chinese B2B or business to business arena and are carrying out extensive import/export and global sourcing deals and will continue to do so in the coming future.




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Some Important Destinations during China Business Travels

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As we have seen in another article there exist several opportunities for sightseeing and enjoyment during China business, import/export and global sourcing related travel arrangements. These opportunities lie in the form of attending festivals, travelling to historical places during China business travels and so forth. Such travels are necessary during import/export and global sourcing deals since they give the required relaxation to the mind, spirit and body which is very necessary for the optimum performance of executives and business professionals hunting across the region for China business partners and securing import/export and global sourcing opportunities with them.
It would certainly a great aid for those people if they know a few places worth the visit during China business travels so that whenever they pass near to any of these places during their import/export and global sourcing ventures, they take out time to have a look at them. Some of these important and interesting places have been listed below for the benefit of the reader, however by no means is this list complete and the order of listing of these places does not indicate their order of importance in any manner.
The Imperial Palace or the Forbidden City is name given to a grand and great palace which used to be the resident for emperors in the ancient days. China business travellers certainly can have a glimpse of this wonderful architecture since it lies in the main Chinese city of Beijing where most China business travellers come in search of import/export and global sourcing opportunities.
We all have surely heard about the Great Wall of China whether we have been to China business travels or not, and a glimpse of this great monument would certainly make you visit time and again just for seeing the same, if not for import/export or global sourcing orders. It was built for purpose of self defence in the earlier days.
Yet there is another popular place which might be very interesting to hear about but only a few China business travellers would dare to venture out into. This is known as the Silk Road and contrary to the name it is not a road but a region which is full of dangers because of its climate and geographical location. Basically this region separates China from Europe and Western Asia and is feared upon by the locals as the land of death. Of course you will not find any import/export or global sourcing opportunities here but certainly you will find a great adventure if you are courageous enough to venture in this region.




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Enter In China and See Your China Business Prosper With Profits

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Take a leap forward in China and head toward the market instead of its mighty walls – what today's offshore import and export China business enthusiasts do. Follow the footsteps of leaders to discover the enormous business opportunities lies in China's import and export industry. Already small and mid sized import and export companies from various parts of the world are keen on venturing China business and global sourcing. Numerous legendary companies of US like United Technologies, GE, Motorola, DuPont etc., have established deep penetration in China market. As per an estimation taken in 1992, 3,100 small and medium scale import and export companies have landed in China and later the number rose to more than 20,000. From manufacturing to exporting and servicing, China business opportunities are burgeoning and attracting all size of import and export businesses from the rest of the world. Over the last decade, number of US import and export companies taken up China business has raised at an astronomical rate – more than five times faster than other parts of the world.

Scope of China Business – Broad Market Range and Manufacturing Potential
Attractive China business opportunities are growing and the growth is spanning through diverse industries. The growth is already evident in a series of industries, like medical, construction, energy exporting China business, telecommunications, agribusiness, machine tools, security and recreational products and service market, infrastructure etc. These are just to name a few of the vast import and export market where overseas China business owners are venturing in.

China Business Partnership of Us Companies
China and Hong Kong together has become the third largest export partner of USA – Canada and Mexico have taken the first and second position. China continues encouraging US based import and export companies to venture and fortify greater business partnership. To generate further enthusiasm amongst more US business owners, Hu Jintao, the president of China, sent two hundred Chinese executives for a buying tour to US. US companies’ trade offices being located in China and fostered by China speak how US companies are deepening their penetration in China business and import and export industry.

Haven for Import and Export Companies and Investors
Besides immense potential found in import and export China business, China has become the heaven for overseas investors. USA companies alone have invested over three billion dollars annually, making China the third largest investing area in the world. China is yielding sumptuous returns on investment, also profits at an expected ratio to the overseas investors. US companies are reaping myriad benefits by investing in manufacturing China business. The list of benefits includes competitive labour resources in China, incentives on investment and extensive local markets of China.

Investment in Locally Manufactured and Imported Products in China
China now allows foreign firms to invest in China's locally manufactured products as well as to support in products brought through global sourcing. Small and medium sized companies can secure huge benefits for trading different types of China business ventures in locally manufactured products, imported goods and import and export of both locally manufactured and goods accessed through global sourcing in China.




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E-Commerce: How different is it?

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E-commerce has been around for sufficient amount of time now and made its impact felt in the arena of international trade, import/export and global sourcing. Still if there are some of you around who aren't familiar or comfortable with the term or the technology behind it, this article is just the right choice for you to read and dispel your ignorance for ever and ever.

It was stated nearly a decade ago that the main concept of e-commerce is not about bolting technology to business, rather utilizing technology to carry out processes related to trade which includes international trade, import/export and global sourcing in a slightly different manner, as compared to traditional methods of the same.

E-commerce most covers activities related to trade including international trade, import/export and global sourcing across networks using information technology. So basically it changes both the cultural and operational aspects of carrying out domestic trade, international trade, import/export and global sourcing. Although the end results of carrying out these activities related to domestic and international trade, import/export and global sourcing still remain the same, namely to earn profits by making sure that output exceeds the input. Of course one might be tempted to say that output can never exceed the input in scientific terms and this is very true also. But when we talk in business terms we measure input in terms of tangible things such as raw material etc but intangible things like mental work, planning etc are not included hence the equation does not satisfy the normal physics laws.




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E-commerce: is every product suited for it?

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We know that e-commerce rules the roost today in the arena of international trade and its various aspects such as import/export and global sourcing. Countries such as China have taken the world by storm and literally revolutionized the pace of economic growth by opening new vistas for e-commerce and international trade which has added fuel to the fire of import/export and global sourcing deals making them the hot chase of the current times.

Although the talks about international trade and activities such as import/export and global sourcing being carried out using e-commerce technologies are in the air round the clock, have you ever bothered to stop for a while and just check whether the same is meant for all sorts of products and services? The answer to this question is not very straightforward and needs some brain tinkering which has been done below.

In the arena of e-commerce and international trade involving import/export and global sourcing of goods and services, the best or most suited products are those which are non-tangible or digital. To take an example it is very easy to transmit a file or a code across the globe via the internet or any other form of networking, but it is more difficult and cumbersome to send a pair of shoes half way across the globe without spending a lot of time and money in the process. Secondly in case of any complaint it is literally impossible to exchange the same pair of shoes by sending it back and forth which will cost time and money, whilst a file sent across the internet can be readily modified and sent back and forth as many times as required without much time or money involved in the process.

This makes digital products and services the most wanted products in the list of e-commerce items most suited for international trade, import/export and global sourcing activities. To talk even in the negative sense a customer might feel embarrassed to go across a high street shop counter and ask for any pornographic stuff, but he/she would be more comfortable in purchasing the same anonymously from the internet by paying with a credit card. Of course this is a very crude example yet it goes to demonstrate the effectiveness of e-commerce in international trade, import/export and global sourcing activities.

Thus we see how e-commerce is suitable for products which are digital in nature and non-tangible in existence because of their ease of transmission across electronic media in international trade, import/export and global sourcing.




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How Big is China Business Travel?

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We have already seen that China business travel is having a bright scope in the sub-continent and due to the rising import/export and global sourcing trends in China, it is likely to grow even more in the future. But this is a mere quantitative statement not of much interest to a statistician or a researcher who deal and believe in numbers even if they are an estimate and not the exact value. So let us try to find out a few statistics about China business travel and how the expanding activities of import/export have affected them.

According to even the most conservative of estimates, the China business market is going to become the third largest in the world by the year 2010. This estimate is not based on any guesswork but has been found through laborious surveys conducted by the American Express business travel on the subject of corporate business travels. Of course the methods used to carry out the survey might be different but several such surveys point out to similar results. Even otherwise it is common sense to think that since China business, import/export and global sourcing is expanding at a phenomenal rate; associated activities of business travel are certainly going to increase. Agreed that in the current times technology has developed a lot and business managers can communicate with other people without ever physically leaving their location, yet at the same time it must be remembered that human interaction lies at the bottom of these activities and therefore travel related to China business will certainly be on the rise.

Another projection of future figure estimates has shown that by the end of the second decade of this century i.e. by the year 2020, business travel in China would involve at least five times more people travelling across the nation as they travel today. This certainly seems to be a very positive projection about the China business and certainly it indirectly indicates that the import/export and global sourcing activities are also going to be on the rise. Another figures show that nearly 20 billion US dollars are spent every year on the domestic travel related to business tours in China.




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How to avoid B2B risk in China

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We know that China is a burgeoning economy and it is very profitable for most ventures to carry out B2B or business to business deals within the country as well as to engage in import/export and global sourcing ventures with companies of China. However as it has been pointed out in another article that such B2B or business to business deals might be fraught with certain risks which should be avoided if one plans to carry out long term profitable business in terms of import/export or global sourcing ventures. Of course there are not hard and fast rules to be followed to avoid or minimize risk in B2B or business to business deals, global sourcing or import/export ventures, yet a few basic steps could go a long way to ensure the same. These steps should be combined with general knowledge and common sense of the individual so that the B2B or business to business transactions and the import/export and global sourcing activities do yield positive results for all concerned in the long run. Some of these basic steps have been described as follows.

Firstly all B2B or business to business deals involving import/export or global sourcing require exchange of money or payment for the goods or services which are exchanged in the process. Therefore the payment rules should be simple and fair for all the involved parties. Major proportion of the payment should only be paid once it is sure that the goods or services will be delivered on time and will be of the same quality standards as ensured by the other party.

It is a must for companies of all levels and sizes to have all the terms and conditions of carrying out B2B or business to business deals and import/export or global sourcing deals in black and white i.e. to say that they should have everything written down in order to avoid any conflicts or confusion at a later stage.

Proper registration of the brand name and logo etc. should be done in accordance with the provisions in place so that no party involved in the B2B or business to business deals can take undue advantage of the fact and the import/export and global sourcing activities are carried out in a safe and sound manner without any legal implications for either of the concerned parties or any third party for that matter.

Thus following these few simple rules one can ensure that all B2B or business to business deals and other related activities of import/export and global sourcing are carried out without any risk to any of the parties.




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Business in China: Does appearance matter?

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In this article we will discuss an interesting aspect of business often not much talked about and usually remains secondary to all the technical talks of profit and loss economics. Yes, we are talking about the appearance of the person here, which includes various factors such as cloths, manners, personality and so forth. One might be tempted to ask what has that to do with the technicalities of e-commerce and international trade or business talks of import/export and global sourcing, but it must be remembered that no matter whichever technology is used the basic human element does not disappear from the perspective, and all activities associated with e-commerce, international trade, import/export or global sourcing are present for the benefit of human beings and do not exist for themselves. So wherever people are involved, their outfit and appearance also takes a prime place in the scheme of things and more so in meetings involving decisions about import/export, global sourcing or other forms of international trade either through traditional or e-commerce technology. Since our main topic of discussion is related to China and its growing volumes of international trade, import/export and global sourcing through e-commerce, it would be appropriate at this stage to take a look at some of the appearance facts that each executive involved in e-commerce, international trade, import/export or global sourcing should follow at least to some extent.

Try to wear subtle and sober colours whenever going for business meeting associated to import/export or global sourcing deals. This is the practice in China and although one might be tempted to ask that in international trade involving e-commerce, the personal touch is not of prime importance, yet it must be noted that even for activities carried out over the internet such as import/export or global souring deals, personal interaction might result at a later stage wherein e-commerce and international trade partners meet each other to discuss and review their deals and business processes.

Formal dress is literally mandatory as casual jeans/shorts etc. are not acceptable to the Chinese people whether they are dealing with local traditional trade meetings or international trade via e-commerce and other activities like import/export and global sourcing. Contrary to the western concept of openness it is considered quite indecent in China if a man touches a woman in public and should be avoided wherever in doubt. Of course the society is becoming less conservative currently in the era of e-commerce, international trade, import/export and global sourcing yet the tinge of this cultural instinct does remain deep inside China.




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