Saturday, March 1, 2014

Current offer to open a company in China (Shanghai surrounding)

Following our knowledge we did discover following facts:
a) in Jan 2014 was the concept of Free trade zone in Shanghai in pilot stage, what means very is talking about it, but nobody in Shanghai knows how it works, the main aim for this zone shall be to import to China
b) we consider the prices of workers and warehouses in Shanghai surroundings, areas of Hangzhou, Taicang, Yanghan area.
c) transportation from China and within China
d) licences for export from China
e) return of VAT in China
f) warehouse status

as we want to establish a company to be in charge of purchase in China. We believe in better quality control, quicker response on our development inquiries, less negotiation about prices and quicker response on new trends.

Our solution shall be by 3 people, 2 of them in warehouse, one as manager, 500 m2 warehouse, 8 incoming orders a month, 2500 cartoons and 200 m3 in containers a month. Budgets looks following:
a) solution offer by international warehouse and transportation company close to Shanghai 5000 EUR a month
b) solution offer by local government in north of Shanghai (Taicang) .... 3500 EUR a month
c) solution offer by our own with little support of local government in close to Hangzhou .... 2500 EUR a month
d) solution offer by international warehouse and trasportation company in Hangzhou ..... 4000 EUR a month.

For additional information please inquiry on my email

Situation after the visit of China (Shanghai, Wenzhou, Shenzhen, Hong Kong) 01/2014

Making business, proving you position in China is getting more and more important. Unfortunately, business in China is much more volatile, than in Middle Europe and there can be also seen little trust between partners, as they are 6000 km fare away from each other. To prove your position in China, you must declare following:
a) who do you make business with
b) how long you do it
c) how can you prove it
d) how strict you are
e) when can you pay and how can you assure it

If you want to achieve something in China after you are able to answer these questions you need to:
a) push your partners at least every week (phone, Skype), no email
b) clarify the agreement by written agreement
c) find the way to improve relationship and talk also about personal matters
d) introduce to your partners financial solutions normal in developed world and use the bank to prove it to them.

Problems, that are facing your Chinese partners:
1. shrinking output per additional input in terms or work force, land and cash
2. decreasing outputs by fixed inputs
3. increasing demands of higher salaries of employees
4. appreciation of RMB to USD
5. increasing laziness of workers in China
6. impossibility to manage more advanced machines by workers in China
7. impossibility of import of cheap workers from other parts of Asia to China (from Philippines, Vietnam ...)
8. limits of export of foreign currency from China
9. orientation on USA rather on EUROPE, as US business system is closer to China's business system
10. high equity/total assets ratio
11. increasing prices of input, limited resources