Doing Business in China 101
Created on February 4, 2014
This post originally appeared on Census Global Reach Blog.
Specialists from the Commercial Service can help you overcome challenges in the market and reach specific goals. Below are some tidbits of knowledge that stemmed from last year’s American Association of Clinical Chemistry (AACC) tradeshow in Houston, Texas. Three Commercial Specialists from Beijing, Chengdu, and Guangzhou participated in the USDOC’s Showtime Program. They met one-on-one with U.S exhibitors at the show and discussed each company’s unique challenges and goals in these diverse regions of China.
Below are some things to keep in mind when trading with China.
- Where Are We. China is the world’s fourth largest country after Russia, Canada, and the U.S., so it’s unlikely that one distributor or business partner will be able to successfully serve the entire country. The U.S. Commercial Service has five offices in China and one helps you identify a local partner. Our offices can identify ideal distributors or business partners through our Gold Key Matchmaking Service, for instance, and offer several other services.
- The Price is Right. Companies concerned with adequately pricing their product for the China market can rely on local partners to guide them through an appropriate pricing structure that will be successful for both parties. The SBA pricing model worksheet is also a good resource to help you get started.
- Building Relationships. In Chinese culture, building a face-to-face relationship is necessary before any business or decision making is even conducted so frequent visits are a must to ensure success. It’s important to identify a distributor or to attend key trade shows within their industry, such as the China International Medical Equipment Fair CMEF. In many cases, doing business in China will require more than a one-time visit to identify your distributor. To identify trade shows/events within your industry, in specific countries, please visit our Trade Events Database.
- Protecting Intellectual Property. Our IPR Toolkits from US Patent and Trademark Office and the International Trade Administration can guide you through protecting your brand in certain countries. Also, the Office of Intellectual Property Rights has partnered with the American Bar Association to create the International IP Advisory Program offering one hour of FREE attorney services for any U.S. exporting companies.
- Medical Devices. All imported medical devices must be registered with the China Food and Drug Administration (CFDA) before being sold in their market. In addition to medical devices, the CFDA will also absorb food safety-related regulatory functions previously handled by other ministries. For medical devices, the CFDA has a comprehensive system for product registration and inspection, which includes product type testing and factory audits. Medical devices are divided into three classes (Class I, II, III) depending on levels of risk, similar to but stricter than that of the USFDA. Clinical trials are required for registration of Class III and some Class II medical devices. The product registration process normally takes from one to three years and registration must be renewed every four years.
- Bring a Friend. If you’re making a trip to China, our overseas colleagues are happy to meet with you while you are there. You have to contact your local U.S Export Assistance Center (USEAC) to let them know to reach out to the specific Foreign Commercial Service office in China on your behalf.
Those were some of the most important pieces of guidance provided to the most frequent concerns voiced by U.S exhibitors. If you’re ever attending a trade show, locally or internationally, we urge you to contact your local USEAC to find out if we are offering our free services, such as Showtime. These programs are a great supplement to your attendance and will add value to your participation at the show.
The U.S. Commercial Service (USCS) is the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration. U.S. Commercial Service trade professionals in over 100 U.S. cities and in more than 75 countries assist U.S. companies competing in the global marketplace. For more information on USCS visit www.trade.gov/cs/.