Building a bridge to China, one business at a time

TRAVERSE CITY – In 2001 when consultant Patrick Mosley made his first trip to China, there were a lot of empty seats on the airplane. It was early in the year, before 9/11. Six years later, things have changed dramatically.

"Now, those flights are packed," he said. "Every seat is full, and they're usually overbooked."

Mosley is a training consultant for RJG Inc., a global technology company with headquarters on Park Drive in Traverse City. Founded in 1985 by Rod Groleau, RJG Inc. provides process control systems, pressure sensing technology, and processing training to the injection molding industry. Mosley has already been to China once this year, and is planning a return trip in July.

"What drove us to China was our customers," Mosley said. "From garbage cans and dumpsters to high tech companies like Hewlett Packard and Microsoft, our customers were using our hardware and software here in the U.S. and it got shipped over there, so we followed."

Charlie Sperling, manager of global sales with Century Extrusion on Aero Park Drive in Traverse City, has had a similar experience.

"Our biggest customers are plastics companies and their biggest point of new growth is in China. They follow the new growth and we follow them. The economy there is on fire."

Century Extrusion has a global contract to supply parts to GE Plastics, one of the largest plastics companies in the world. That keeps Sperling "running all over the place"; so far this year he has flown close to 100,000 miles he said. In 2006, he clocked 200,000 air travel miles. For domestic companies interested in cultivating business relationships with the Chinese, the value of face-to-face contact cannot be overestimated, Sperling said. That's why he's traveled to China a dozen times in the past three years.

"It takes forever to establish trust there – it would be next to impossible to bring it about without meeting people, in person, on an ongoing basis. The Chinese culture puts a great deal of emphasis on this."

The other side of the necessity of traveling to China in order to have successful business relationships there, whether with domestic customers who have operations there or Chinese-owned companies, is the energy and expense involved. Sperling cautioned those investigating opportunities in China not to underestimate how taxing such frequent long distance travel is to those who are doing the commuting.

With that in mind, there are many advantages to this developing economic power: A motivated but inexpensive workforce, good urban infrastructure, and available power sources all contribute to China's economic growth, according to Mosley.

"Just recently, I read a statistic that ten percent of all the giant cranes in the world were in Singapore, putting up new buildings. It's out of control. I really don't see it slowing down."

Traditionally, trade between China and the U.S. has been strong because there has been a market here for less expensive Chinese goods; what's changing is that because of the growth of the Chinese economy, their domestic market is demanding more products and services imported from the U.S. According to The Wall Street Journal, the Chinese economy grew at an 11 percent annual rate in the first quarter of this year, compared with a growth rate of less than one percent in the U.S.

"There's a lot of opportunity for Michigan in China," said Michael Shore of the Michigan Economic Development Corporation (MEDC) in Lansing. "Our interest is in getting Chinese companies to invest here, locate here, and create jobs, but there are also opportunities for Michigan companies to sell goods and products and services directly to China."

In April the MEDC lead an investment mission to the Shanghai Auto Show, where Michigan was the only state in the U.S. that participated as an exhibitor, highlighting state-based parts manufacturers and auto accessories.

"Our folks thought we got a very strong response there. They were very excited by the initial results," said Shore. "The idea was to make contacts and build relationships."

The consensus of those interviewed about the strength of the Chinese market was summed up by John Kolarevic, owner of Laitner Brush Co. on Laitner Drive in Traverse City: "It's here to stay."

Laitner Brush has some of its products manufactured in China, and Kolarevic said the experience has been a positive one. His advice?

"Be very specific about your needs and requirements, travel there, and meet directly with the factory owner, not just their representative."

Companies interested in exporting can learn the ropes from Tom Maguire, director of the Grand Rapids office of the U.S. Department of Commerce's International Trade program and from Sonja Johnson, director of the Van Andel Global Trade Center at Grand Valley State University.

Both Maguire and Johnson have conducted seminars in Traverse City for business executives interested in learning more about exporting products to China and other Asian countries. Both also said that although they have no specific dates or venues, additional seminars will be offered in the future.

"We only deal in exporting because of the ongoing trade deficit," said Maguire. "What we can do is help those businesses looking to get a substantial foothold in a foreign market."

Johnson said her membership group can help with basic training, getting products ready to ship, finding raw materials, networking, and other services. BN