THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, February 18, 1996 TAG: 9602170428
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Long : 140 lines
Starting a business in the United States can be overwhelming, especially as an entrepreneur from another country.
But Norfolk-based China Business Center USA is trying to make that process less intimidating for people from mainland China.
It's setting up showrooms in a six-story building on Granby Street and planning a trade show for business people to display clothes, industrial machinery or any other China imports they want to sell.
The idea has potential, but there's also a potential problem. There's already a similar operation in Portsmouth called China Market USA that's been doing business since 1992. And people may confuse the two.
How can two start-up operations - both selling themselves as filling a niche market - survive in Hampton Roads? The answer depends on which perspective you take.
``Whether Hampton Roads can support two competing business operations focused on imports from China remains to be seen,'' said J.R. Bullington, director of the Center for Global Business and Executive Education at Old Dominion University, who attended China Market USA's grand opening in late 1993.
``It will depend on their connections,'' said the former U.S. ambassador to Burundi. ``That's very important doing business internationally, especially in Asia. You need to have good personal connections. You need personal connections to bring people here.''
``I don't know enough about either one to evaluate the prospects of one over the other, but certainly it doesn't take deep analysis to see that it might be more difficult for two competing operations like this to succeed, than one. It doesn't mean they can't. But the prospects depend on the people involved.''
The business strategies of Portsmouth's China Market and Norfolk's China Business Center don't appear to be that different.
The China Business Center in Norfolk hopes to market clothing, auto parts, jewelry, electronics and machinery. It plans to open a restaurant, a coffee shop, a clothing and jewelry store, and a computer-repair store on the first floor.
With its initial investment of $407,000 from a private group of Chinese backers, China Business Center occupies two Norfolk buildings - one on Granby Street and one on Boush Street.
The China Market is housed in a vast complex. The Portsmouth operation has myriad white partitioned offices, each with sliding glass doors and some with windows. The spaces belong to various participating companies that sell an assortment of products ranging from lawn furniture to office equipment like desk lamps and end tables.
Started by an Atlanta developer named W.W. Gilman; Shui Ho Wong, who owns Jing Far Enterprises in Hong Kong; and Peter Chu, a Chinese-born Canadian, China Market opened to fanfare in December 1994 in a 144,000-square-foot building on Portsmouth's Airline Boulevard. Converted and designed to accommodate 300 companies in office space showrooms, it had 15 companies present for its opening and another 25 that leased space.
Today, it has 45 participating companies that have either set up shop or are in the process of applying for visas, said Tony T.F. Chan, China Market vice president.
``China Market focuses on wholesale and direct marketing and not on the retail side,'' Chan said. ``The major focus of China Market is to introduce Chinese businesses to the U.S. by providing them access to networking and personal connections. And the main purpose is to cut off the middleman.''
The Portsmouth firm gives Chinese entrepreneurs information about getting appropriate paperwork, like business licenses, completed to incorporate their companies in the United States.
Norfolk's China Business Center sounds eerily similar. It plans to recruit Chinese entrepreneurs to display their products and market its Granby Street building as an international showroom emphasizing trade shows. Its two principals, Wenson Ge and Pingping Fan, have experience in this type of business because they both served as vice presidents for China Market before they were fired in April 1995.
Both firms declined to say much about the former association except that differences in management styles existed, according to Chan. An advertisement in the Virginian-Pilot's Business Weekly tab announced the dismissals on Oct. 16, 1995.
Yet the Beijing natives who picked Norfolk for the China Business Center have more going for them, say those who are familiar with the organizations. China Business Center is better capitalized and its leaders appear more knowledgeable than the Portsmouth operation, some say.
``They seem to be more advanced in their business plan from the outset,'' said one source from the Virginia Port Authority who asked not to be named. ``They had perhaps more experience under their belts. They seem to be able to hit the ground running.''
Regardless of their backgrounds, differentiating one import-export showroom from the other could be difficult, said Peter Wong, founder and president of the Richmond-based Wong Group, a marketing outfit that assisted China Market when it began.
It's easier to throw the region's support behind one operation so synergies between marketing the city and the center to tourists or chief executives can begin, Wong said. Atlanta did that with its Gift Mart, a high-rise bazaar extravaganza that does what both China Market and China Business Center both want to do.
``They need to do stronger marketing to attract the importers or the distributers,'' Wong said about the two showrooms. By having two centers, their message to prospective importers and American companies that want to do business is diluted.
Some international relations experts, however, believe both operations can flourish, given what they perceive as the blooming economic relationship between China and the United States.
``It's going to be more difficult, but it's certainly more possible given the boom in China trade that I hope is going to occur,'' said Old Dominion University marketing professor Theodore F. Smith, who specializes in international trade issues.
In looking at the bigger national and global picture, the ventures hold promise, said Todd A. Mooradian, an international business professor at the College of William and Mary.
``The volume of trade with China is so great that certainly two firms could succeed,'' he said. ``Having those so close together could result in synergies. You could perceive it becoming a center for that type of thing.
``What they're really taking about is trade between China and the entire United States, not just the Hampton Roads area.''
China Market's Chan agreed, citing the center's two other offices in Los Angeles and its headquarters in Hong Kong. Hampton Roads serves only as a strategic location - due to its low cost, port and local government support - for networking with companies in other parts of the country.
``It could go either way depending on micro or macro decisions,'' Old Dominion's Smith said. ``Micro in terms of what the management does in differentiating itself and how they implement their strategies.
``On the macro, what the federal government does and how the U.S. tries to get China to open its trade future. It depends so much on how much capital they have and market conditions. If China continues to open up very rapidly, there'll be plenty of business for everybody. But then if the U.S. government puts restrictions on China as a way of changing their restrictions on imports, the thing's up for grabs.
``I think the future looks very good for increased trade with China,'' he concluded.
Adds China Market's Chan: ``As you know, America is a land of free choice. Well you cannot forbid anyone to go into the same line of work.
``We welcome competition. Whether a client chooses China Market or China Business Center is their choice.'' ILLUSTRATION: Color photo
HUY NGUYEN/The Virginian-Pilot
China Market USA has been doing business in Portsmouth since 1992.
by CNB