Asia Development Strategies China and Vietnam Michael Violette, AmericanTCB

1. Asia Development StrategiesChina and VietnamMichael Violette, AmericanTCB File copy provided by http://www.wll.com

2. Asia Development: Opportunities and Experience • Vietnam: Conformity Assessment Conference • China: A Film Documentary File copy provided by http://www.wll.com

3. Vietnam Conformity Assessment Conference: Vietnam Standards Development and the Impact on Commerce • Vietnam’s entry into the World Trade Organization • Opening of the market for foreign investment • The pressing need for infrastructure development • Expansion of product and process verification http://www.atcb.com/vietnam vietnam@atcb.com File copy provided by http://www.wll.com

4. Industries Affected • Pharmaceutical • Food and Biological Testing • Textiles • Construction • EMC and Product Safety (Electronics, IT and Wireless) • Fire technology • Pesticides • Infrastructure, civil engineering (Uniform • Plumbing Code, Uniform Mechanical Code) • A&E firms File copy provided by http://www.wll.com

5. Mission and Goal • Promote and further trade ties and US linkage on industry and regulatory levels File copy provided by http://www.wll.com

6. Solicitations & Support • US Department of Commerce, US Consulate General HCMC • ACIL • ASEAN • PAC • US Governmental and Industry Conformity Assessment Authorities (NIST, ANSI) • Institute of Electrical and Electronics Engineers • Private Laboratories • Manufacturing Interests File copy provided by http://www.wll.com

7. China Prospects • Growth Rates • Investment • Access Issues • Our Experience • Documentary Project File copy provided by http://www.wll.com

8. Going North Lights! File copy provided by http://www.wll.com

9. China Business Outlook U.S. imports from China reached $243.5B in 2005. China’s GDP grew 9.9% in 2005, surpassing $2 trillion (US: ~$13T) China plans to quadruple GDP in 20 years, which implies an average 7.3% annual growth File copy provided by http://www.wll.com

10. China Business Outlook • China has risen from the United States’ 11th largest export market five years ago to our 5th largest export market today. • The U.S. trade deficit with China was $200B in 2005, a 24% increase of $38B from $162B in 2004. • The value of U.S. exports to China in 2005 reached $34.7B, up 20.5 % from the previous year. (Global imports reached $148B, up 36%.) • U.S. exports to China have increased by 80% since 2001 Source: US DOC

11. File copy provided by http://www.wll.com Progress in Beijing

12. US Exports to China File copy provided by http://www.wll.com

13. Direct Foreign InvestmentVarious Markets File copy provided by http://www.wll.com

14. GDP vs Population File copy provided by http://www.wll.com

15. File copy provided by http://www.wll.com Markets

16. R&D Expenditure vs GDP File copy provided by http://www.wll.com

17. US Exports To China • Product Value (USD) %Change • aircraft and parts $3.84b 137.23% + • digital integrated circuits 3.12b 17.8% + • soybeans 2.25b 3.25% - • cotton 1.40b 1.51% - • ferrous metal scrap 1.26b 35.1% + • auto parts / accessories 1.03b 72. 3% + • auto data processing equip. 0.78b 0.2% + • copper scrap 0.76b 42.31% + • aluminum scrap 0.72b 92.5% + • Waste of paper 0.69b 42.79% + • Electric Apparatus 0.57b 7.79% + File copy provided by http://www.wll.com

18. Business Outlook File copy provided by http://www.wll.com

19. Residences File copy provided by http://www.wll.com

20. Challenges • Intellectual Property Protection • inability to systematically and vigorously enforce the law • low administrative fines do not deter infringement • Technical Barriers to Trade – Implications for Customs • development of technical standards aimed to protect non-competitive domestic industries • lack of transparency in standards development process • redundant testing requirements • National Treatment • industrial policies limit market access by non-Chinese goods File copy provided by http://www.wll.com

21. WTO Commitments (December 2006) • Reforms in: • Architecture, engineering and urban planning services • Banking • Distribution and retail • Insurance • Telecommunications File copy provided by http://www.wll.com

22. File copy provided by http://www.wll.com Testing • Capable

23. Market Entry Options Direct Exports Sales Agent / Distributor Cooperative Service Center Resident Representative Office Wholly-Owned Foreign Enterprise 100% Foreign-Owned Foreign-Invested Commercial Enterprise (FICE) Distribution and sales (retail, primarily) File copy provided by http://www.wll.com

24. Goals • Start in known environment with trusted partner (Taiwan) • Develop relationships in PRC • Develop Local Support and generate solid revenue stream • Pricing strategies File copy provided by http://www.wll.com

25. File copy provided by http://www.wll.com SINOCES

26. Money • Wire transfers to PRC • Salaries are 1/5th of equivalent US professionals • Flow of money through Hong Kong • Banking reform is imminent and necessary File copy provided by http://www.wll.com

27. Necessities • Must go and see • Must develop relationships • Must be realistic • Must look at the objectives of the Chinese partners • Must understand realities of banking and contract situations • Must visit often as the situation and opportunities change File copy provided by http://www.wll.com

28. Beer, Steve & Art File copy provided by http://www.wll.com

29. AmericanTCB Experience • Started Exploring China Market Opportunities in 1999 • Taiwan Office in March 2004 • Beijing Rep in May 2005 • Shenzen Agent in November 2005 • Shanghai Agent/Support in July 2006 • Rep Office in 2007 (Banking!) • WOFE (?) File copy provided by http://www.wll.com

30. Present Operation • Hosting organization in TW • Starting formal company in Shenzen • Developing trade mission capabilities • Training, seminars, service support • Access Channel to EMC Test Laboratories in PRC File copy provided by http://www.wll.com

31. Go & See File copy provided by http://www.wll.com

32. Documentary Project • Capture the sights and sounds • July 2006 • Qingdao (CES) • Beijing • Dong Guan • Interviews File copy provided by http://www.wll.com

33. Plans • Solicit Support from Business Interests • Develop “story” • Targets: • Discovery Channel • Sponsorship File copy provided by http://www.wll.com

34. Themes • Trusting your partner • Business Opportunities in China: Demographics • Developing Business • Language & Culture • Concerns: IP & the Environment • Expectations • Parting Advice File copy provided by http://www.wll.com

35. Credits • Production: • Liv Violette, McLeanPR Group • Direction • Jason Scadron, Collage Productions • Editing • Michael Farkas • Co-Sponser: Washington Labs • Photos: Marianne Koster File copy provided by http://www.wll.com