China is a complex market to understand especially when it comes to laws and regulations. The first barrier for Western companies looking to sell in China is to pass the initial product registration prior to exporting to China. For many western business people, trying to understand the rules and the application procedures is extremely confusing and often slows down their entry into the Chinese marketplace. Rather than explaining what the initial product registration entails, I will share the following tips to help Western companies overcome the barrier more quickly.

Why is the import registration so confusing?

1. The Chinese regulations are ambiguous and conflicting. For instance, dietary supplements have different definitions in the U.S. than they do in China. In the U.S. this refers usually only to vitamins or minerals while in China it can be anything from vitamins, herbs, amino acids or other specialty nutrients. In fact, there is no definitive list of how an ingredient might be classified – food, dietary supplement, TCM (traditional Chinese medicine) or drug. Approvals are made on a case-by-case basis and rely heavily on how the registration paperwork is filled out.

2. Overbearing rules and procedures. Although many major authoritative bodies such as the State of Food and Drug Administration and the Certification and Accreditation Administration have published a good deal of English information online, the lengthy application process and truckload of required paperwork have made many western business people cringe. Furthermore, there is not a quick way to estimate the cost associated with the application.

How do you deal with the initial registration and certification?

1. Find out first if your product is regulated and which agency oversees your product. There is a chance that your product is regulated by the Chinese government. You want to find out right away if your product is required to have any import registration and certifications. I have referenced major agencies overseeing a large variety of products and industries at the end of this article.

2. Outsource to a specialist that can make your life easier.

As I mentioned early, the Chinese import rules and procedures in your industry can be overbearing and confusing. You may consider outsourcing the task to an expert who deals with these issues on a regular basis. There are two types of specialists that can help you; 1) import regulatory requirement consulting services that do nothing but dealing with the government agencies and application paperwork, 2) specialty logistics companies such as import and export custom brokerage houses that specialize in clearing these type of goods and take care of the entire process for you.

3. Your distributor/importer in China should be able to help you with regulatory requirements. Say for instance that you are a premium packaged food manufacturer in the U.S.; it is likely that the distributor you are seeking in China has had experience representing foreign products in your category. They have likely dealt with all sorts of import regulatory requirements in the past. With their support, you may find that overbearing import registration and certification compliances can be accomplished.

References

State of Food and Drug Administration – regulates the imported medical device registration, drug/health food registration, pharmaceutical packaging

Certification and Accreditation Administration – regulates a large group of products, for example, Electrical wires and cables, Circuit switches, electric devices for protection or connection, Low-voltage Electrical Apparatus, Low power motors, Electric tools, Welding machines, Household and similar electrical appliances and more

State Administration of Radio Film and Television – regulates the network access license and CAS/SMS certificate for television and radio broadcasting products

China Railways Product Certification Center – regulates the CRCC certificate for railway and locomotive products

Ministry of Industry and Information Technology – regulates a lot of electronic information products, the network access license for telecommunication products, SRRC license for radio frequency (RF) and satellite products.

Ministry of Public Security – regulates the sales permit of computer information system security hardware and software products.

China Certification Center for Fire Products – regulates the pattern approvals of other fire products, like fire extinguishing agent, fire extinguisher, fire-proof door, fire hydrant, fire nozzle, fire coupling, fire emergency lamp, gas detect & alarm equipment and fire-proof materials, etc.

** The article is prepared by Leverage China, LLC, an import and export consulting firm specializing in China market entry services.

What business lessons can you pick up from this image?

To understand and do business with China it’s extremely important to understand the lessons learned from the World Expo in Shanghai.

Here’s a quick glance at some of the lessons you should try to lookout for when visiting the Expo:

1. From the architecture, one can get an understanding of Chinese mentality. The China Pavilion architecture, aptly placed in the key place of the park, shows the mentality of “Middle Kingdom” with it’s centrally pointing tops, as if it were a backwards pyramid which rested solely on the heart of China. The giant building is an homage to traditional Chinese architecture with a “modern” twist. Read about the architect’s vision here: http://www.expo2010.cn/expo/expo_english/documents/
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2. With torrents and torrents of people lining up outside each pavilion waiting to get in and get tickets it’s easy to recognize the differences between the way different countries operate their pavilion.  Obviously, the Chinese one is a major attraction to all Chinese and foreigners, so expect packed crowds. Notice the differences in service from each country.
3. With regards to the shows. It’s easy to see what Chinese people find interesting is definitely different from what the foreigners might find interesting. In fact, Chinese people are so used to seeing masterful performances by Chinese acrobats, or blazing speed demonstrations of Kung Fu by professionals raised to train to perfection from as young as 8 or 9, that certain kinds of demonstrations leave Chinese feeling quite unimpressed. Yet, ironically enough, the easiest steps in a Salsa dance show, or a Tango demonstration, will leave Chinese people breathless. Observe the differences and keep them in mind next time you want to impress your Chinese business partners.
4. Notice the positioning of the buildings. A lot of thought has gone into the exact locations of each of the pavilions. This can help understand the love of face and of giving face that Chinese people practice.

Anyways, there are countless more lessons to be learned. Which ones did you learn from the Expo?

Iphone in China can succeed. Here's how...

So Iphone entered China early September. And thus far, no more than a few thousand sales have been registered. Where did Apple go wrong?

The problem isn’t due to the Iphone’s popularity, as there is a huge demand for Iphone’s in China. One can see black-market Iphones all over the place, which sell for anywhere from 4000 RMB to 6000RMB (about $600 to $875 dollars).  It also isn’t the fact that there aren’t enough cell phone users. A China news agency report printed early May 2009 showed that after introduction of 3G technology, mobile users grew to a total of 670 million people. That’s almost twice the population of the U.S.. Also, it isn’t that people don’t want a new phone since they already have one, most people I met there change their phones on a frequent basis. So, shouldn’t Iphone be making a huge blast in China?

A recent Forbes article by Shaun Rein on why Apple is Failing in China outlines some interesting  points. Here are some of my observations and commentary to his article:

1. Apple entered the market assuming China is the same as the U.S.
   • Anyone who’s been in China knows how easy it is to get a pre-paid phone number and keep that as long as one wishes. Iphone is making Chinese consumers lock in to an expensive phone plan without realizing that model, although it works for the U.S., has never been popular in China. Chinese like to change phone numbers quickly and easily, although most don’t. And imiting their “options” isn’t going to win over any new customers, considering they can get a black market iphone for around the same price that doesn’t do that.
2. Apple didn’t understand consumer spending
   • Chinese usually prefer to buy cheaper plans, although they will go all out on getting a phone. They prefer texting over calls, etc. So by having them lock into expensive call plans, they are turning off customers. No pun intended.
3. Apple didn’t understand the competitive marketplace and partnered up incorrectly
   • Partnering up with a telecom (Unicom) that sells to a least wealthy consumer and has lower number registered users was a mistake.
   • Most people believe this company to have worst signal, and most people don’t want to change carriers, let alone change phone numbers.
4. Apple took too long to enter China
   • If you are not in China quickly, then the black market for your products will start becoming the main market and it’ll be harder to get back in when u decide to.

So what can Apple do? They are locked into a contract with Unicom, but have to make the best of it.

• Spend time doing more market research to understand what people want out of a phone.
• Find a way to address needs, such as: being able to keep existing phone numbers, working with Unicom to change the people’s perceptions of their service (ie providing better coverage, affordability, etc)
• Reach out to other businesses and educating them on the power of developing great apps.
• Chinese people don’t want “convenience” through the internet, as much as Americans. They are more interested in developing connections, playing games, and keeping informed, learning English, etc etc . So Apple should develop free apps that work as English dictionaries, news feeds, as well as reviews of restaurants, entertainment, and others. (those would attract the cosmopolitan crowds at least)

The lesson here is find good partners, do your due diligence, and plenty of market research, or partner up with people who understand the market.

So one of my good martial arts buddies in China has been a DJ for several years and has always loved writing songs and rapping, etc.

Well in the past few years he’s transformed himself into a total underground Hip Hop Artist. He’s actually completed a ton of songs, and will finally get his album out on stores.

Anyways, check out his stuff here http://xennightz.com/enigma_review_kit/ he’s giving out the album for free for halloween.

Speaking of halloween… what will I be doing this halloween? Yup, that’s right. I will be working on my fashion site, trying to recruit several writers to boost our SEO, of which it’s been going great. We already rank on page 1 for our main keyword and have number 1 rankings for several other profit-bringing keywords. Things are great and getting better. Anyways, I will also be setting up several more blogs for our business, as well as trying to get bloggers to write about us .

Finally, plans are on the way to start a new business. Which will be a small business consulting, where I will help small business owners rank highly for google and yahoo and other search engines so that they may be easily found when their clients are trying to look for their products. Gonna be great!

I recently had the great pleasure of catching up with current U.S. wushu champion Alfred Hsing and finding out his motivations in wushu, and the keys to his wushu success. This motivated a series of martial arts tips on how to succeed in life in his blog. The success lessons he learned in wushu and business can be applied to any endeavor so make sure you read up on them. Below I have reorganized the information slightly and created an acronym to easily remember the points. Here you will find just a quick summary, but get to his blog to read the full article:

Success in Wushu can be Summarized with the acronym WUSHU:

1) W for Work – Be consistent and work smarter/harder than the rest.

2) U is for Undeterred and Unchanging Focus – when you are working, give it your undivided attention and focus on the work at hand by eliminating distractions. Also, focus on one goal at a time, and don’t move on until you have completed the goal at hand.

3) S is for Sleep and Recovery – Get rest and have time for just fun- You will come back much more refreshed and more effective.

4) H is for Heroes – Surround yourself with people who are getting the results you want and learn from them. Surround yourself with the Heroes, be they Zhao Qingjian, Wu Di, or Bill Gates, Peter Drucker, Jack Welch, Kotter, Brad Fallon, etc.

5) U is for Unique and Undisturbed Environment – Immerse yourself in the appropriate environment – Don’t make your workplace the same as your “rest” place. Make sure you have a place where you can just focus on work, a workplace that is only used for work, and where you can concentrate solely on work.

Anyways, check out his great article on some great stories on how this lead to him becoming number 1 spot on the U.S. wushu team.