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More Overseas Small Businesses Eye China Market
2004/06/09



The 13th east China export commodities trade fair recently held in Shanghai attracted 15,700 business people from 175 countries and regions, more than 90 percent of whom were from small to medium-sized companies.

During the week-long fair, exports of Chinese products worth 2.04 billion US dollars were contracted, with 83 percent of deals signed by small to medium-sized companies, a rise of more than 10 percent compared with the last event.

This proves the estimation made two years ago by the chairman of the Executive Committee of the US Chamber of Commerce.

Steve Van Andel forecast at that time that more and more overseas small to medium-sized enterprises would pursue business opportunities in China after the country's accession to the World Trade Organization (WTO) in 2001.

Gruppo Emme, general manager of the Italian garment company Gianni which has 300 employees, came to China for the first time to attend this year's fair.

He took the subway every day to the fair to seek cooperation with quality garment makers, citing that his company's exports, mainly destined for the United States, face greater pressure due to the continuing rise of the euro against the dollar.

"On the contrary, garments produced in China are of low cost and good quality," he added.

To some overseas companies, commercial opportunities in China not only mean money but also the means to rejuvenate their flagging fortunes.

The Tokyo Candle Inc., for example, established in 1918, revived its successful business by relocating all its production lines to China and only retaining its sale and service sectors in Japan.

"Low-cost labor and big markets in China have saved our company. Otherwise, one more day's operation in Japan means more losses to us," said Shi Yaoguo, a Chinese manager of Tokyo Candle.

The Ever Grass International Co. Ltd., a Taiwanese company producing traditional style artistic fans, took the same road to revival, as its production costs in Shaoxing, east China, are only 60 percent of those in Taiwan.

At the Shanghai trade fair, overseas business people were especially impressed by the diversification, high quality, and stable price of traditional Chinese-style garments, handicrafts and other consumer products.

The Global Sources Corp., a big-name provider of international trade information, entered the China market in 1992 and has received a marked increase in orders for Chinese products during the past two years.

And the number of orders from overseas small to medium-sized enterprises is rising dramatically, according to the company.

Business in the China market accounted for 35 percent of the income of the information company in 2002, up 6 percent from a year earlier.

Professor Hua Min, head of the world economic research institute at Fudan University in Shanghai, indicated that high-quality but low-cost products and a market of huge potential were the key factors attracting overseas small to medium-sized companies to China.

In addition, further improvements in China's market economy system and its harmonization with international trade and legal systems in the wake of its WTO entry greatly helped reduce the cost and risks for overseas business people to explore their chances in the China market, he added.

According to a state government official, foreign companies will have much more opportunity to earn money in China in terms of its encouragement of overseas investment across much wider areas of the country.

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