1. Which industries
and markets are competitive for U.S. firms?
a list of "encouraged" industries,
including telecommunications, consumer electronics,
environmental and agricultural. However, the
national government provides opportunities
for companies which seek
to take advantage of her highly educated, middle
class market products and services. There are
numerous huge opportunities to do business
with a country that does $50+ billion dollars
in trade with the U.S., and over 25 years of
sustained economic growth.
Are there common characteristics to companies
Yes, premium quality products and services, cultural
awareness, long-term commitment and investment, and
ongoing access to legitimate market and competitive
3. What are the
advantages of a JV and WOFE?
partners offer connections and cultural understanding.
The Chinese partner usually contributes land, labor
and infrastructure to the enterprise. Therefore,
the risk is spread. Benefits of a JV are often
illusory. This is especially true for companies
which plan to export the bulk of their profits.
Significant due diligence is required taking, on
average, six to eight months to establish.
reparation for filing a WOFE is much faster,
often set up within two to four months. The foreign
investor has complete management control with
no need to share profits. Most U.S. companies
opt to establish a WOFE. Both WOFE and JV approval
can be derived from a trading enterprise.
4. How quickly can my
firm begin generating revenues?
Obviously this is a most critical
projection. Depending on the industry and business
model (exporting, manufacturing...etc.), you should
expect to begin generating revenues in 3 – 5
years with profits in the next business cycle.
Intensive market research and due diligence can
begin to present guidelines for your strategic
marketing and ROI estimates.
5. Are my premium quality
products and/or services marketable?
Again, appropriate market research
and due diligence can provide insights to industry
competitiveness, especially as the Chinese economy
continues to demands new capital goods and infrastructure,
and its middle class the highest quality items.
6. Do language barriers
present a problem?
Chinese-speaking members on staff to help out with
negotiations and other transactions and arrangements.
U.S. executives should be aware that both English
and Chinese versions of documents must be submitted.
If a conflict arises, the Chinese version prevails
unless negotiated otherwise.
7. How do we repatriate
Although the reminbi (Chinese
Yuan) is not fully convertible, legal entities
can convert and repatriate currency. Some restrictions
8. How do we protect
our intellectual property rights?
China has made major strides in
ensuring that the intellectual property
rights of foreign companies are protected.
Remedies were and continue to be created especially
at the WTO’s rules, regulations and guidelines
come into effect as negotiated. Foreign companies
usually feel more secure with the establishment
of a WOFE when it comes to protecting technology. Outstanding
marketing can significantly counter infringements.
9. Why do businesses
It is most often due to a lack
understanding and sensitivity as
well as knowledge
of bureaucratic procedural steps at
national and provincial levels, and not from
technical or professional incompetence. Building
personal relationships (Guanxi) must precede
business. VQI and its associates in the U.S.
and China have established relations in several
key ministries and departments, marketing intermediaries
and media channels.
do choose the right partners or associates?
Their integrity and caliber will
help determine the success of your enterprise.
This critical selection process is the most important
aspect of your strategic marketing. VQI will
conduct thorough investigative due diligence to
insure your candidate list is well-vetted and highly
11. What kind of companies
does VQI represent?
We are strategic consultants and
marketing intelligence professionals, and not industry-specific.
Our core competency is Actionable
Intelligence used to facilitating
market entry and creating a sustainable strategic
position. During the past 20 years, VQI's
expertise has helped a handful of Maryland’s
Fortune 100 as well as small and medium sized firms
enter the Middle Kingdom. Each has premium-quality
products and/or services.
12. What is VQI’s investment model?
Generally, it takes one to two
years of significant due diligence in the U.S.
and China before a formal presence is established.
The investment range for SMEs is $150 – 250,000
per year to send an expat executive.
However, VQI's investment
model is 1/3 to 1/5 less, depending on the industry
and the business entity our clients want to establish.
With offices in the U.S. & China, we can conduct
initial due diligence for our select clients during
this discovery phase of their strategic marketing. VQI can
also introduce investors or partners who are willing
to take an equity position.