Group formed to help Maryland businesses in China marks 10th

March 24, 2006
By JOE BACCHUS,
Daily Record Business Writer

China is one of the world’s largest economies and Maryland wants to be a player in the global marketplace. It’s only logical for the state to seek out partnerships and business opportunities.

That was the thinking 10 years ago when the Maryland-China Business Council Inc. formed with a handful of people.

That’s the thinking today, with close to 90 companies and organizations in the council’s ranks, said Clay E. Hickson, the council’s chairman and president.

The council’s role is that of facilitator, he said, whether it’s helping small companies form business plans or helping companies meet potential business partners.

“Getting people together to network among themselves and share information,” Hickson said.

The council holds monthly events that usually include networking receptions and speeches on China-related topics. Hickson said the topics are diverse to match the diverse needs of the membership.

Last week’s meeting doubled as a celebration gala for the council’s decade in existence. The keynote speaker was Timothy P. Stratford, assistant U.S. trade representative for China affairs in the Office of the United States Trade Representative.

Stratford said organizations such as the council are needed to help U.S. companies navigate the unfamiliar territory of Chinese business. He said in 2005 there was a $201.6 billion trade deficit between the United States and China, with the U.S. on the unfortunate end. Stratford said the relationship should improve now that China is a member of the World Trade Organization.

There are currently 86 council members, Hickson said. Large companies. Small companies. Consulting firms. Law firms. Universities. Government agencies. Individuals with a particular interest in China. Even students at a reduced-fee membership rate.

The number starts low and climbs throughout the year, usually ending with between 100 and 115 companies and other organizations, Hickson said. Over the next couple of years it hopes to push that final tally near 150, he said. Hickson said the council also wants to add more large companies that already have a substantial presence in China. Increasing the variety will increase the council’s ability to be an advocate for China business.

One of the council members is Chindex, a health care company with offices in Bethesda and Beijing. The company was founded in 1981 with the goal of bringing Western-quality health care products and services to American expatriates living in China, said Judy Zakreski, vice president of Chindex’s U.S. operations.

Chindex currently operates hospitals in Beijing and Shanghai. Zakreski said in addition to expatriates, the facilities also cater to middle- and upper-class Chinese who can afford to stay out of the country’s “horrible” health care system.

Chindex has been in China for a quarter of a century, but companies looking to enter the market today would face different and “significant” obstacles, she said. Among them are the regulatory environment for non-Chinese companies, the difference in culture and the non-transparent legal system. It has actually become more difficult in the past five years or so, she said.

Organizations such as the council are important resources for companies looking to negotiate the Chinese marketplace, she said.

Huge opportunity

Deborah Kielty said China’s position as one of the world’s top economies means Maryland needs to build as many connections as it can. Kielty is the president and executive director of the World Trade Center Institute in Baltimore. Like the council, the institute educates Maryland companies on foreign opportunities and helps them make business connections.

Kielty said it is China’s competitive culture, diverse manufacturing base and massive size that make it such a “critical” force in the market. She said the country’s impact will only increase with time, and eventually it could become more economically important than the United States — that is, if it isn’t already. Also, China’s culture values long-term relationships, so getting in early means a better chance of succeeding in the long term.

“Today, and down the road, it is going to be one of the major global markets,” Kielty said. “You’ve got to understand them to play in that market.”

The Maryland Department of Business and Economic Development has had a presence in China for the last decade. DBED operates the Maryland Center China, which has about 30 workers spread throughout its original Shanghai office and the Beijing office that opened last October.

Nancy Wallace, DBED’s director of international business, said the center’s role is to help Maryland companies gain entry to China and find success. She said a state such as Maryland, which markets itself as a “knowledge economy,” needs to have connections to the biggest players in the market.

“It’s a huge economy and they’re a huge factor on Maryland’s economy,” Wallace said.