East Meets West : Talks Set Scene for Deals With Chinese Firms
Hunched over a table in the Spring Street forecourt of Los Angeles City Hall Friday morning, Poebus H. Han got quickly to the business at hand. Speaking fluent Cantonese and Mandarin, he offered his services as a commercial banking officer with Bank of America to the Chinese oil and petrochemicals industry representatives standing behind the table.
“We can help with financing for partnerships and joint ventures. We can provide letters of credit,” he said.
At the other end of the table, Stefan Wohnhas was ready with business cards printed in Chinese and English. But Wohnhas, the U.S. representative for Lotus Engineering International Inc., was looking for one of the scarce interpreters. Before the end of the day, interpreters would become precious to most of the 250 American businessmen who had come to meet 40 of the People’s Republic of China’s highest-ranking industry representatives.
The day-long trade talks organized by the city of Los Angeles were unusual because the members of the China Enterprise Management Assn. were chief executives of leading companies and governmental commissions who had the authority to make deals for specific projects.
Wang Xianliang, vice chairman of the Zhanjiang Economic Commission, was looking for equipment for a fiberglass manufacturing line. Wang Genyuan, director of the Dezhou Cotton Mill, was looking for peripheral equipment for shuttleless jet looms. Zhao Xiyou, chairman and president of Shenyang Auto Industry Corp., was looking for automobile manufacturing equipment.
Worthwhile for Contacts
After an early morning technical briefing on doing business in China and financing exports to China, the city set the Americans and Chinese loose in the forecourt to find each other. “One problem with this format is there are not enough interpreters,” said Wohnhas, whose company was looking for a partner to set up a factory in China to make automobile parts. While the format also made it difficult to conduct serious talks, the Americans generally agreed that it was worthwhile to make the contacts.
“It’s very difficult to just come in (to China) and introduce yourself,” said Douglas H. Killpack, vice president for Pacific Rim operations at Packard Associates. The Burbank company offers trade consultations. Some of the novices in the group said they benefited from talking to American business people who have had experience with China.
Wohnhas urged that Americans make more use of countertrade, which has been beneficial to his company in dealing with the Chinese. He said many Americans don’t understand countertrade--a form of bartering where goods and services are traded for items that are then sold for cash in another market.
Los Angeles accounts for about a quarter of the U.S. trade with China. The City Hall talks--the last of four such sessions in the United States this month attended by the Chinese group--was made possible by significant changes, including some decentralization of the Chinese economy in recent years.
“China is now reforming its trade system,” said Wayne Tam, chairman of the CDN Group, U.S. publisher of the English-language China Daily News. Tam, who organized the tour for the Chinese, added, “Before, the head of an enterprise didn’t have an opportunity to talk to suppliers and buyers. Most of the company heads here have the authority to trade directly with the outside world.”
Zhang Wanxin, the leader of the delegation and vice chairman of the China Petrochemical Corp., told the group that the Chinese government is serious about continuing its reforms. Noting that American businesses often express anxiety about the stability of Chinese policies, he said, “the open door policy is here to stay . . . The opening of Hainan province is a demonstration of the continuation of this policy.”
Fried Chicken in Demand
China has increased its foreign trade 14% each year for the past five years, he said. The Chinese people have savings of $87.2 billion, which translates into purchasing power, Wanxin said. “The Chinese want all kinds of products and commodities at all levels,” he added.
The Chinese are noted worldwide for their cooking, he said. Despite the dozens of ways Chinese have devised to cook chicken, “Kentucky Fried Chicken is doing very well. The chickens are imported from America because the Chinese chickens are tougher, and they are still making money. I think McDonald’s is very envious and will try to catch up,” he added.
The Chinese aren’t just looking for imports, Wanxin said. “Trade should be done on many different levels. We can’t remain at a basic level.” The world’s most populous country needs and wants technology and joint ventures, he said. “China is a very big potential market. The U.S. and China need to pool resources and develop the market.”
Wanxin acknowledged the “problems and frustrations” American business people have encountered in trying to do business with his country. “A lot of these problems come in the aftermath of a lot of policies of the past,” he said. “The Chinese government is aware of these problems and is trying to resolve them.”
