Are You China Ready?

The China Business Information Center (BIC) takes the guess work out assessing your market readiness. The U.S. government is increasing resources dedicated to assisting U.S. companies explore business opportunities and address challenges to doing business in China. Use this self-diagnostic tool to open the door to pursue export opportunities and evaluate whether your company is prepared to meet the challenges posed by China's system for regulation of international trade. Below certain questions you will find suggestions on how to enhance market entry preparation.

1. Prior export experience to at least one foreign market. ( ) Yes ( ) No

2. Commitment to developing export opportunities including top management support, designation of an internal China sales manager, sales and technical staff who are willing to travel to China often, and support staff including an interpreter or translator to facilitate communication with Chinese buyers. ( ) Yes ( ) No

3. Sufficient financial resources to actively support marketing of products in China including translation of product brochures, participation in trade shows, and organization of customer informational seminars. ( ) Yes ( ) No

4. Ability to host visits by potential buyers to conclude sales negotiations, facilitate pre-contractual equipment inspections, and provide installation training. ( ) Yes ( ) No
Suggestion: If you answered NO to any questions 1-4, your company should consider identifying an export management firm with China experience or approach a different market with fewer technical, logistical, cultural and business risk hurdles before attempting business in China.

5. Ability to acquire and analyze Chinese market data, identify sources of competition including domestic and foreign firms, and ascertain distribution channels. ( ) Yes ( ) No

6. Ability to acquire familiarity with export logistics unique to China including negotiation of letters of credit, freight forwarders, export documentation and export licensing. ( ) Yes ( ) No

7. Ability to locate Chinese import regulations, safety certification and labeling requirements and cultural preferences to modify the product and its packaging.
( ) Yes ( ) No

8. Prepared an international marketing plan with realistic goals, China-specific marketing strategies, progress benchmarks and an exit plan. ( ) Yes ( ) No
Suggestion: If you answered NO to any question numbered 5-8, the China BIC website can provide more information. Please review the frequently asked questions, visit the industry information page for market research and the exporting reference page to learn about Chinese import regulations. The U.S. Commercial Service Hong Kong can advise on the pros and cons of reaching mainland China through HK.

9. Sufficient financial resources to engage the services of local attorneys or consultants to navigate China's system of international trade regulation, develop a sales contract that is enforceable in China, undertake due diligence investigations, and address problems. ( ) Yes ( ) No
Suggestion: If you answered NO to question 9, you have determined your company is able to begin market activity, but may be unable to effectively address problems when they may arise. To learn more about how the U.S. government can help address market access barriers, challenges to bidding on major projects, or resolving commercial disputes, visit the assistance page. The U.S. Commercial Service offers customized services to undertake due diligence investigations and obtain market research concerning your product and clarify basic import regulatory issues. If you conclude that these resources are insufficient and the cost of private service providers is excessive, reconsider whether your company can sustain market activity through serious regulatory challenges.

10. Ability and financial resources to provide training for a Chinese sales agent or distributor in the United States, continuous guidance for conducting market research and planning sales
goals. ( ) Yes ( ) No
Suggestion: If you answered NO to question 10, your company may be able to explore the market, but will eventually need to augment capabilities in order to support expansion of market activity. Some new-to-market firms explore the market through direct exports while acquiring market knowledge. After this phase, a firm evaluates whether market prospects merit commitment of resources to select and manage a Chinese sales agent or distributor. The U.S. Commercial Service can help your firm identify a qualified sales agent or distributor through the International Partner Search or Gold Key Service.

11. Ability to establish a program for protection of intellectual property including trademark or patent registration, market monitoring, and enforcement strategy. ( ) Yes ( ) No
Suggestion: If you answered NO to question 11, your company's marketing plan may assume too much commercial risk. China's system for protecting trademarks and patents is based on a first-to-file principle. To establish a legal right to prevent others from appropriating intellectual property rights established in the United States, it is necessary to register in China. To learn more about protecting intellectual property in China, review the Intellectual Property Toolkit, located in the China BIC's exporting page. Speaking with local legal service providers in China is also recommended. An expanded reference list of legal service providers is available through the Contact China resource guide. American companies can also receive one hour of free IPR consultation from a legal expert through the China IPR Advisory Program.

12. Commitment to providing domestic and foreign customers equivalent service quality, which may necessitate frequent travel to China by a technician or establishment of an equipment service and maintenance center with a Chinese partner. ( ) Yes ( ) No
Suggestion: If you answered NO to question 12, your company may need to commit more resources in the future to maintain the quality of service delivery or the installed equipment base. At this time, China does not permit a foreign company to establish wholly foreign-owned service and maintenance centers. Most companies with a mature market presence eventually establish a joint venture service center with a Chinese partner. An alternative approach is establishing a regional service center through markets such as Hong Kong. The US Commercial Service in Hong Kong can facilitate identifying local partners.