Five years ago, Robert Martin didn't even think about China. He was busy starting Westech Aerosol, a Port Orchard company that makes sprayable...
Five years ago, Robert Martin didn’t even think about China.
He was busy starting Westech Aerosol, a Port Orchard company that makes sprayable adhesives used in boats and manufactured homes.
After his product spread across the U.S. and Canada, he pushed into Europe. The tiny company grew to 30 employees.
Now he’s taking the next step.
Martin and nearly 40 other delegates jetted out of Seattle today on a trade mission to China organized by the Trade Development Alliance of Greater Seattle.
They’re heading to the Pearl River Delta, the booming factory region that sits on China’s southeastern coast next to Hong Kong. More than 40 percent of China’s exports are made here, an output of $300 billion a year that would rank the region in the top 20 of global economies.
Since China uses more adhesives than any other Asian country, “we decided to make our Asian entry by going through China first,” said Martin, who has never been to Asia before.
China’s Pearl River Delta
The trade mission is scheduled to travel to seven economic centers in China’s most prosperous region
Hong Kong The former British colony now supplies much of the capital, technology and business know-how for the Pan-Pearl River Delta.
Zhuhai China has targeted Zhuhai, adjacent to Macau, as part of the country’s next wave of rapid economic growth.
Shenzhen An economy focused on computers and electronics as well as container shipping give Shenzen the highest GDP of any Chinese city.
Guangzhou A prosperous commercial center and host to one of Washington state’s two trade offices in China.
Zhaoqing Along with producers of food and beverages, building materials, electronics, chemicals, machinery, textiles, and furniture, Zhaoqing has a high-tech zone with the lowest wages and land costs in the Pearl River Delta.
Fuzhou The sister city of Tacoma, Fuzhou is heavily focused on import-export trade.
Haikou Part of China’s largest Special Economic Zone, with incentives for foreign companies.
Source: Trade Development Alliance of Greater Seattle
The potential goes beyond China. If he can find distributors or factories to use his glue, “we’ll be learning all the logistics involved in shipping to Asia, then move to Taiwan and Japan and possibly Malaysia.”
The delegation members, who are paying about $5,500 apiece for the 13-day drip, are equally balanced between business people and policymakers, and include six representatives from Boeing. Rather than closing jet deals, the aerospace executives say they will be learning about China and bringing back knowledge they can share with employees in Washington.
The group will visit cities in Guandong province, near Hong Kong, as well as Fuzhou, an import-export hub near Taiwan that is Tacoma’s sister city, and Haikou, on Hainan Island and part of China’s largest Special Economic Zone.
“For Boeing, they’re going to three places where they just sold some planes,” said Bill Stafford, president of the Trade Development Alliance, who is leading the trip. “They don’t need to open a door as much as acknowledge the fact they’ve got some customers they’re happy with.”
Participants also include Nancy Anderson, deputy general counsel for Microsoft; Ray Stephenson, mayor of Everett; Bob Drewel, head of the Puget Sound Regional Council; Linda Strout, deputy chief executive of the Port of Seattle; and John Mohr, head of Everett’s port.
“It’s important that public officials understand what’s going on in global competition,” Stafford said. The northern port city of Shanghai, for example, is building 14 light- and heavy-rail lines in addition to the three it already has, with the goal of having more than half its population commute by train. “That’s the competition,” Stafford said.
Governor’s previous trip
The Trade Development Alliance trip comes just two months after Gov. Christine Gregoire led a delegation to China and Japan. The state and the alliance each typically take two foreign trade trips a year, and coordinate on destinations and purposes.
China is particularly important these days. The nation of 1.3 billion people is Washington’s fastest-growing and third-largest trading partner, behind Canada and Japan. It bought $1.66 billion worth of state exports last year, not counting airplanes, a figure that has nearly tripled since 2000. The state has trade offices in Shanghai and Guangzhou.
Gregoire and her delegation visited northern China and focused, in part, on policy; for instance, meeting with government officials in an effort to ease tariffs on kraft linerboard, a packaging material that state paper companies are selling to China. And the state’s agriculture department director, Valoria Loveland, pressed her Chinese counterparts to speed up review and help the state sell fresh potatoes and other products
As a governor, Gregoire met with high-ranking counterparts in China.
The Trade Development Alliance trip is more focused on business, though it includes government officials. Stephenson, Everett’s mayor, said the alliance invited him because Everett is the center of Boeing’s 777, 787 and 747 production. They’ll meet with mayors and other similar-ranking officials in Chinese cities, helping support Boeing.
Stephenson and Port of Everett director Mohr are looking to attract cargo to Everett, which they said hasn’t had direct trade with China since the 1990s.
Stephenson also will look at Chinese education and transportation systems.
“They want to be a dominant player economically,” he said. “Anything I can learn about how they’ve done it, why they’ve done it, that’s what I want to learn.”
Sheida Hodge, who is along on the trip, has been to China twice. An author and former head of cross-cultural training at Berlitz, she has traveled around the globe teaching executives how to avoid clashing with foreign business partners.
Clash of cultures
Nearly three out of four cross-border business joint ventures fail within three years, she said. And the biggest cause — above economics, politics or competition — is culture clash. In her book, “Global Smarts,” she says people always thing their way of doing things makes the most sense.
“When your counterparts are motivated by a different set of rules — when they see things through differently tinted glasses — you have to pay specific attention to what is going on inside their heads.”
U.S. businesspeople often make the mistake of assuming their counterparts in meetings have the authority to make a deal. In fact, Chinese officials often send subordinates, armed with responsibility but no authority. After the meeting, the employee has to try to sell the idea to the boss. If that fails, the contact can go nowhere.
“You get exaggerated hospitality,” she says. “But you leave and nothing happens. That’s because you’re not dealing with the decision maker. Understanding who is the decision maker is crucial.”
In China, it’s called guanxi, paying attention to relationships, Hodge says.
On the trip, she’ll be observing personal interactions, which she’ll translate into advice for clients of Hodge International Advisors, her consulting firm in Seattle.
Martin used the U.S. Commercial Service, a unit of the Commerce Department, to set up meetings with a boat builder, a home builder and a furniture maker who might need spray contact adhesives for boat frames, installing upholstery, interiors or laminates.
“It’s pretty nice,” he said of the government help. “We give them the parameters, and they actually go out and find these people.”
Martin said he doesn’t expect to close any deals for his adhesives on this trip. He’s not sure if he’ll be dealing with decision makers in this “schmooze and handshake session.”
But he has been studying Mandarin through a course offered in Tacoma. And he thinks China’s burgeoning Pearl River Delta area holds a lot of promise. Competition against his product in the U.S. is driving him to seek foreign markets.
“I don’t think one little trade mission is going to do much, especially with a rookie like me,” he said. But making contacts is the first step.
“We know we will get there,” he says.
Alwyn Scott 206-464-3329 or email@example.com