Posts Tagged ‘China’

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June 4th, 2010

Are you conducting logistics and supply chain intelligence?

Not long ago I attended the Global Supply Chain Summit, a conference held during the international business convention for the aerospace industry (Aéromart). A number of speakers and managers of large aerospace firms talked about the emergence of a global supply and logistics chain and the importance of becoming a part of it.

Here are some interesting facts I picked up at this conference:

The phenomenal development of the Asian economy, and particularly, China, is simply a return of the pendulum.

By 2020, China will have built the equivalent of Canada:

More than 96 airports and 30,000 km of rail will be built, compared to 26 airports and 46,888 km currently in Canada;
There will be 220 cities with over 1 million inhabitants.

Nine out of ten manufacturers of mobile construction equipment already have a presence in China.

In 2020, there will be more cars in China (25 million) than in the U.S. (17 million).

Most intellectual property litigation is between Chinese companies and not between Chinese and foreign firms.

R&D spending has grown by 142% and the number of R&D centres has increased by 37%.

20% of Chinese living abroad are found in Canada.

A growing number of major order givers are setting up operations on Chinese soil. It is therefore essential to follow your customers in order to serve them properly and hold onto your market share.

Lastly, there are three main reasons why you should consider this market:

Relatively lower costs and increasingly advanced skills;
Market size;
Volume of public and private investment.

Business owners have a fiduciary responsibility to conduct supply chain intelligence. You must understand the issues and make sure to have a plan for adapting to the anticipated changes. The preceding list is an example of some of the things you should be considering in your reflection.

Samir Naoum

April 9th, 2010

More about China…

Have you had a good experience trying to establish business ties in China or were you so frustrated that you not longer believe it’s possible?

Chinese suppliers and partners have changed a lot in that they have learned to better respond to North American needs and requirements. So those who have tried unsuccessfully to develop this market should think about giving it another shot. And those who haven’t yet considered this market as a way of rounding out their product lines or cutting costs would also do well to explore this huge country brimming with opportunities. If you already have a presence in China, think about expanding your network in order to benchmark your practices and experiences, and capitalize on continuous innovation.

The Laval Technopole International Business Centre is studying the relevance of conducting a trade mission to China this fall to help Laval companies:

  • Find and evaluate potential partners for complete or partial sourcing;
  • Find competitive suppliers for their materials, accessories and components;
  • Find and acquire new technologies or tools;
  • Find products to expand or complete their product line;
  • Conduct technology intelligence and benchmarking;
  • Understand how this market works and find opportunities for their products or services.

Since our missions are personalized, space is limited, and prior preparation is necessary to ensure the mission’s success. During the trip, participants meet a limited number of qualified companies and are provided with coaching and local interpreters.

For more information, contact Samir Naoum at 450 978-0991.

Samir Naoum

April 6th, 2010

How does the new Chinese law on patents affect our businesses?

On February 1, the third revision of the Implementing Rules for Patent Law took effect. The new law contains a number of measures that are consistent with practices elsewhere in the world, such as the absolute novelty standard, which invalidates a patent application if the invention is disclosed in China or elsewhere before filing (for example, disclosure in a scientific journal, magazine or at a conference).

The new law also establishes measures to address national concerns. For instance, a confidentiality examination is now compulsory for any foreign patent application pertaining to inventions “in which the substantive contents of their technical solutions have been completed in the PRC.” This confidentiality examination can take up to six months and allows China to keep exclusive rights to technologies developed in the country. Such a measure could discourage foreign companies from conducting R&D in areas of national interest or security. Many foreign groups will also have to set up local operations to manage the patents on the inventions of their Chinese subsidiaries because they will want to first file in China or file their international PCT applications from there.

A new principle of the law that could have a major impact on Laval and Québec SMEs pertains to international exhaustion of patent rights.  According to this principle, importing a patented product into China without the patent holder’s consent no longer constitutes an infringement if the product has already been sold on the international market by or with the patentee’s consent. This measure was implemented because China believes that its industrial development hinges on importing cutting-edge technologies whose intellectual property rights are almost always owned by foreign companies. What this means is that foreign firms or inventors who don’t want their patented products to be sold in China for fear that they will be copied can no longer legally prevent this from happening.

To find out more, read the article published by the Institut national de la propriété intellectuelle et le Service économique of the French Embassy in China. I also recommend this page on the Université de Montréal research site, which contains an excellent summary of the general concepts of patents and intellectual property.  Lastly, here a few recommendations from the Canadian Embassy in Peking for protecting your intellectual property rights in China.

Bruno Séguin

November 18th, 2009

SMEs can now also export to China and India

For the past few years, everybody’s been talking about the huge market potential in China, its 300 million middle class consumers and phenomenal growth. It’s the same for India. However, although sourcing in China is quite popular, only a handful of Laval and Quebec firms sell their wares there.

The fact is that China and India are distant chaotic markets fraught with entry, cultural and other barriers. It’s not easy for a small Quebec company to find its niche in the Pacific Rim without getting burned by having others copy its products or not finding the right business partner.

That said, I’m starting to hear more and more cases of Laval companies landing big contracts in Asia and we’re fielding a growing number of questions about the legal, financial and other aspects of exporting to China.  It’s very exciting to see small businesses leverage their niche expertise to stand out on the international stage. On October 19, the Globe and Mail published an article on Canadian exports in its Report on Business. Click here to read it.

SYNERGX and JMF Cranes & Hoists are two examples of Laval companies that succeed in these markets. M. Menghini, President of JMF, was telling me how the Indian market is full of opportunities for his company. He is also considering hiring a full-time representative to develop this market and evaluating the possibility to develop a partnership with a local firm.

There are many similarities between doing business in the U.S., Europe and Asia. For instance, you must make sure to know your partner well, have a clear, complete and detailed contract, and maintain a close relationship with your customer. Just because the customer is far way, speaks another language and is from a different culture doesn’t mean the rules are different. You can make the process easier by learning about the country’s business practices and surrounding yourself with the right partners.

Although they were published in 2006 and 2007, the following guides from Export Development Canada are still very relevant for our companies:

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