Reply To A Request For An Update On My New Life-Business Venture

[Prōdigium]

Creative ingenuity always makes me smile.

Thanks Lance.

Hey, how about a post about your new adventures, not just about the industry but you personal move to your new area?

Got any neat photos?

Douglass, thanks for the interest in my new "venture". I chose to move the reply to this forum as it was not appropriate to keep it under the tips forum.

For those that might not be aware, I am now living in China (8 months now) and developing an understanding of the next huge frontier for business opportunities that abound in a market place where there are 1.5 BILLION potential customers and a middle class that is growing faster than any country in the world. As a business person this is the place to be if you want to BE in a market that has for 2 decades grown at 15% or more and shows no signs of majorly slowing down. The disposable income and even more important factor the INVESTMENT income of small and medium sized companies here is growing rapidly.....and despite what many people might think, they want quality products that many American companies produce.

So with this in mind, I chose to take on a silent partner to help manage my business in America while I moved here to begin a year long study in the market opportunities as it relates to our industry. I have also been working on learning Mandarin (Chinese language) and I can tell you that this is harder than anything I have ever done...darn this is a really hard language to get down, .... I have also been researching the distribution and supply chains in this country and developing a network system to allow for efficient and regular delivery. UPS is NOT a good system here, and there is a major hassle when shipping anything less than a crate of goods. How most items reach the correct address is still sometimes a mystery.

My hopes are that in the next year, to begin to lay the groundwork for helping American companies bring their high quality manufactured products to sell in China with all the logistics details already resolved with regards to customs brokerages, international documents and re-distribution to authorized dealers. This is a major endeavor, and one that I have committed my life to for the next several years.....maybe longer?

It has posed several problems, and sometimes I am incredibly frustrated by the way business is done here..it can be exhausting to get even the most basic information and even more problematic to have it CORRECTLY translated.  .. but I can also say that without a doubt, this is an incredible country and I am very happy with my life here. Everyone I have met treats me with absolute respect (deserved or not) and the people have a very positive view of Americans. When I am asked where I am from and I say that I am "Měi​guó" or an American, they always smile and say it is nice to meet me. Often it is followed up with an offer to take me out to eat, because all business here revolves around FOOD! , Refusing an offer to eat or drink is not only rude, it can end any chances of doing business in the future.....I have gained several pounds since last October..

Below are photos of my home town "xiǎolǎn zhèn" including some local attractions close to my home. It looks like any other town you might see in America and to be honest it might actually be better than most?..I have never lived in such a safe town (personal safety) and the sidewalks are all tree lined and beautifully landscaped. This is a very wealthy town located in the southern most province of China, formally known as Canton...and I can be in Hong Kong in about an hour with a short ferry ride. I can also be in Macau in less than 2 hours and if you think Vegas is  the gambling capital of the world....you have never seen ANYTHING like Macua.

There is virtually everything here a westerner can desire...except a good cup of coffee at a store. The public transportation system is nothing short of incredible given the volume of people it has to move every day, and for how little it costs to use. A taxi ride across town is about 5 RMB or abut 75 cents. My apartment is very nice and is located only a 15 minute walk to the main downtown area on the main street that passes through the town. Which is very convenient to get to the bus station or high speed rail that I use often to travel to other major cities. This is truly an incredible experience and despite the language barriers, cultural differences and many other little problems that I deal with every day....I am truly enjoying my time here....especially the bars where I can buy a 1-liter bottle of Budweiser Beer for a mere .93 cents !!  I also love the awesome bike path that goes through the town and connects several of the towns beautiful parks...and all nestled between my apartment.

My apartment building:


View of the city:


Old Town Canal: (only 1 street from my home)


Longshan Park only about a mile away from my apartment.



The bike trail 2 blocks from my apartment.

 

[blue moon]

very cool!

thanx for taking the time to share!

[Prōdigium]

very cool!

thanx for taking the time to share!

Not a problem... I hope Doug gets a chance to chime in as he asked me to share my venture with everyone.

Not that I wish to begin a debate on the merits of what I am trying to do in China in regards to business. But for those who might consider what I am doing negatively, consider this.

Everyone one likes to say if you want to keep American Manufacturing alive..and JOBS at home, you need to buy American. Well , yes that helps most certainly...however if your an American manufacturing company making and selling to say just North America (US - Canada) well the truth is that your marketplace is very limited, and if your company employes say 50 people currently and sells say 1000 units a month of any given product, just consider that here you could sell 10,000 items and would need to hire another 400+ employees to make those products.!!

Germany is a powerhouse in manufacturing, the products they sell are EXPENSIVE...yet they signed a massive trade agreement this year for over 50 BILLION Euros and I do not see any reason why American manufacturing companies cannot do the same, except for the reason that nobody (politically) wants to sign those deals to keep Americans with good paying jobs. What I am doing will never be on that scale, but my efforts might allow some companies to expend into markets that they are avoiding due to the myriad of complications of international trade.

I will also admit that I am doing this work for more than just the screen printing market and in fact building an entire new company that provides logistics and product management that operates from a server based (internet) software system I have developed over the past 5 years.

[inkman996]

You touched on a couple of items already but I am curious about how does the dollar overall translate into the native money. Comparison wise.

[gnizitigid]

Thanks for sharing, would like to see more pictures of places

[Command-Z]

Cool! Looks like a clean city. Many places I visited in China were not so clean...

I agree with your view on the global marketplace. Globalization has been stigmatized... outsourcing is seen as a solution to raise dividends for shareholders and executive bonuses as wages stagnate for the middle class here in the US. You're right, globalization can be an opportunity for growth for everyone who sees the world as an expanding market, not just a source of cheap labor for those who want to exploit the workers.

Good luck.

[Prōdigium]

You touched on a couple of items already but I am curious about how does the dollar overall translate into the native money. Comparison wise.

Well, the dollar is no longer linked the the RMB (Renminbi) or locally the Yuan. So the value is slowly making its way down. That said it currently exchanges 1$ to 6.45 Yuan...So the exchange rate offers me some serious buying power here. But as mentioned, that is changing..albeit slowly as the Chinese government desires. The truth is that despite the load shouts from politicians that it needs to change faster...it is accepted that the rate of value is fine at its roughly 5% value increase per year. If the exchange rate were to rapidly increase the only effect would be massive inflation in the US as everything you buy that is made in China (in part or in whole) would increase in price faster than gas has. Remember that many products manufactured around the world are made of raw materials purchased here. And when the raw ingredients cost more, so will the finished product. A steady increase in the exchange rate is stable for the markets.

However, one MAJOR difference in currency issues here is the banking system. While back in the US. my great bank (sarcasm)  offers me a 0.01% interest on my savings account..my Chinese bank gives me an AWESOME rate of 3.75% interest !!!! So i have begun to transfer most of all my savings to my Chinese bank because not only do I get a really good interest rate, I am able to add to that the value of the exchange rate....5% per year. Do the math and you will see that I am getting 8.75% on my savings account.     by the way, there are now several branches in the US for the Bank of China that offer customers Yuan/Dollar deposits with excellent interest rates. I have been with my current bank for over 15 years, and while I would love to continue keeping my money with them...the simple fact is that they do not care about my small business and have restricted the services I need to operate my business...and worse yet, charge me more for the crappy services I get now. Nothing personal, its just business. Banks are global service providers and Chase (my US bank) is here doing business, but cannot compete.

On a more personal level, I will say that here in China on a "product for product" basis such as buying a bottle of beer, or basic clothing...there is no comparison. Most everything here is less expensive in real purchasing power. For instance, the corner market has cigarette lighters like you see in ANY corner market store for .75 cents (US value) a can of Coke .45 cents (US value) and I can go to the local grocery stores and easily buy a pound of Pork for half what is in the US...and the same is true for most fresh fruits and vegetables. On the flip side, some products like Cheese and coffee are very expensive here mostly because there is not a large market for such items. My apartment is also very reasonable in price by comparison to the US. I live in a very nice building, completely furnished, 2 bedrooms and a very large private patio with 24 hour a day security services.

By Chinese standards this is a luxury apartment and costs me on average 2000 Yuan per month with all utilities included...that is only about $310.00 per-month. That being said, it is about the same as the "average" income of most Chinese workers for people who work in such jobs as say... a screen printer. I have asked the owner to sell it to me, and was told 450,000 RMB , or just under $70G's. A price I know to be about 50,000 RMB to much, but it was a first offer, not a settled price. Utilities cost MUCH, MUCH less especially electric as they have a completely state run power grid and the price tiers are adjusted for residential and business. My electric bill here averages only $15 a month and I run the AC every day now as the climate here is just like Tampa Florida.

Overall the daily cost of living is much less, my cell phone is a great example. No contracts, pay as you go is the ONLY option here for all carriers and for $12 (US) I get 25 hours of talk time, full 3G access and coverage is everywhere..and I do mean EVERYWHERE! I have rarely ever lost service, and while at peak talk times the quality suffers (AT&T customers understand) I am never without at least 3 bars even when I was on my girlfriends family farm planting rice back in April...Yes, I planted rice on a rural farm for 8 days. My girlfriends father died in February and her mother needed help on the farm. It was a great experience and actually sort of fun. I now have the (Guanxi) from every member of her family  , not easy for a foreigner to obtain with other Chinese people.

[squeegee]

Wow, really interesting stuff.  You reminded me of my own similar experiences years ago, I lived a couple years abroad and it was an eye opening experience.  Relish these exciting times, I am envious of your opportunity.  Please post more about your journey and definately more pictures.

[Chadwick]

Well how about that.
I recall us chatting, and you mentioning China some years back, and now there you are.
Good on ya.
Best of luck and all that.
Cheers Lance.
 

[Donnie]

Cool Beans Lance!!!!

[DouglasGrigar]

Nice, nice stuff Lance.

Planting rice is the best one...

Farming was something that my Dad’s family was deep into for generations, the last existent family farm continues to exist in the family.

[DouglasGrigar]

Any more news and photos Lance?