June 20, 2017


Made in China: Why It’s Actually a Good Thing!

By Fergie (Fergül) Kuzucuoğlu

Made. In. China. You’ve probably seen these three words on practically anything you own. From the clothes we wear to the phones we use, America heavily relies on items exported from this manufacturing powerhouse in the Far East. However, in recent years, the new trend for American companies is to bring their business “home”. Backed by the current administration, many Americans are demanding that these manufacturing jobs which have been outsourced in the past, be returned to American soil. This idea has sparked a backlash against China-made products and created the social stigma that America companies should stop working in China.

 



 








Local Company

The most popular transition into the Chinese market is the tried and true practice of acquiring a local partner. Having a Chinese partner is essential in a successful move, as they will not only provide an inside-look at the current economic climate, they will also offer invaluable insight on Chinese culture that you might otherwise not possess. Partnering with an established local Chinese company provides numerous benefits, the most critical being guidance when it comes to China’s extremely complicated regulations, legal processes, and governmental affairs. Testing out a new market like China is similar to navigating uncharted waters, and both are much easier with the help of a guide. A local Chinese company will be the guide to help you through the early stages of your move.  

Joint Venture

If you think your business might need even more support when you arrive in China, your small business might consider a joint venture. Many American companies entering a new market will need the governmental backing and financial support of an already well-established company in that country, and as the classic song goes, we all need somebody to lean on. In this case, leaning on a third independently managed company allows your small business to share resources with an existing Chinese company such as their network and also share liabilities and expenses.

Wholly Foreign Owned Enterprise

Wholly Foreign Owned Enterprise (WFOE) is a popular investment mechanism for American companies looking to set up shop permanently in China. Unlike joint ventures, WFOE allows a business to incorporate a foreign-owned limited liability company, giving them greater control over the business venture and essentially the same freedom American companies are used to. While WFOEs are chock-full of perks such as autonomy and protection of intellectual property, the process of establishing a WFOE can be expensive and lengthy. However, this potentially costly set-up is sure to yield results and give American companies something that many believe is priceless when working in a foreign market: independence from Chinese partners and their stake in your company.

Agent

At AFK Strategies, we recommend companies to work with agencies in early stage of starting their business in China. I personally lived in China for seven years’; I first moved to Shenzhen in southeastern China. Shenzhen is in great proximity to Hong Kong and was actually the first part of China to start trading in 80’s. Later on I moved to Shanghai, where many international companies have begun migrating. With my knowledge of China’s market, our team at AFK can help you quickly and easily open a business. As an agent, we handle several aspects of your business that can be challenging to foreigners such as employ staffing, fulfill sales, and import goods. Using an agent is great for companies just starting out in the foreign market and offers them a quick and non-committal option.

If your business is ready to be expand in the world’s largest market then you might be ready to enter the Chinese market. “Made in China” is not the taboo it seems to be in America, but rather a move that will take your business to the next level. If moving your business to China is not right for you, a great stepping-stone you might consider is sourcing or buying products from the Chinese market see if China may be the right fit for your company to work with. Our team is ready to assist you with any all methods of working with China, from a full on company move to assisting with international procurement and supply chain management. Contact our experts on the Chinese foreign market at AFK Strategies Inc. today and learn more about how we can bring your business to the Far East.

AFK Strategies Inc. is a boutique strategic advisory and business development company that is committed to serving our partners as their associates in China, Turkey, and the United States. AFK consulting services help companies identify and solve their business challenges via an extensive global expertise. The company assists the growth of small and medium sized enterprises (SME’s) in the United States at the local level, while at the same time aiding the growth of U.S. companies in China and Turkey. The services encompass three key areas: business development, supply chain management and brand development. Contact AFK Strategies Inc.to learn more.

Although the controversy of whether to return jobs to America wages on, one fact about the “Made in China” dispute remains true: American companies enjoy financial prosperity in China! As the world’s most populous country, the Chinese are consequently spending the most money, and therefore American companies can reap major reward by bringing them their business. For this reason, having your business “Made in China” can actually HELP your business not only thrive in the foreign market but grow in sales from the world’s largest consumer base. Aside from transitioning into the Chinese market, another great way to improve your business is through sourcing or buying from the Chinese market.

At AFK Strategies, we believe in offering our clients a variety of ways to grow their business by maximizing the Chinese market.

AFK STRATEGIES INC.