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Dec 4, 2011

China Can Make You Money: Don't Trust Us, Trust the Former U.S. Undersecretary of Trade

A retired U.S. undersecretary of Trade, Frank Lavin, was interviewed by Forbes in an article entitled:  Export to China on the Cheap.  The article sheds light on the great opportunities present in doing business in China for American and European exporters.  American and European companies are, increasingly, seeing China not only as a sourcing option, but as a new market for their exported products. We have numerous clients that have succeeded in entering and selling to the Chinese.

The Chinese have the largest number of millionaires in the world.  These individuals, overwhelmingly, prefer foreign products over Chinese products.  Often, the price is of no concern, thus, many of my clients find they maintain higher margins in China than in the West.  The middle class is growing quickly and overwhelmingly they wish to follow in the footsteps of Chinese millionaires and thus buy "quality" foreign products.
"The China market is far more open than is perceived in the U.S., especially in the consumer space,” Lavin says.  It’s also big. Last year alone, just the increase in U.S. exports to China of about $27 billion was as large as the total value of American sales to France, he says.
Lavin doesn’t know China only from his stint in Washington. He earlier had a banking career in Hong Kong.  And he was chairman of the steering committee of the USA Pavilion at the Shanghai Expo last year. He is currently living in Hong Kong, where he also works as chairman of public affairs at Edelman Asia Pacific.

Lavin thinks one of the most promising industries in China for U.S. exporters is baby items. “People are willing to pay a premium for safety,” he says. Another: auto accessories.  China has become the world’s largest auto market, and has a growing number of car aficionados.
What do you think?
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SeanHayes@ipglegal.com