Art Of Dealmaking In China

Nov. 15 - KGO (KGO) -- Bay Area trade experts say what the governor is doing is an important first step in doing business with China. But there can be obstacles to clear before deals are forged.

It's predicted to become the world's biggest economy. The potential is already evident in cities like Shanghai where consumers are cultivating a taste for luxury goods. That's why San Francisco gourmet food maker Dave Hirschkop went to China in May.

He tried to find buyers for his award-winning mustard and sauces.

Dave Hirschkop, Dave's Gourmet: "The people were very nice, and the people were very creative. They want to help you to do whatever they can, but really to sell products to me."

Dave Hirschkop's experience isn't unusual. Michael Brownrigg is a former U.S. trade official and a veteran deal-maker. He heads up the San Francisco office of Chinavest, The oldest U.S. merchant bank in China.

Michael Brownrigg, Chinavest Managing Director: "If you're not willing to invest the time, which is probably the CEO traveling over once a month for the next year or two, then don't make the investment at all. It's not a market that you can do remotely."

Most small companies can't afford to do that. Big corporations can. They are the early success stories in China.

Sebastian Teunissen, Ph.D., Clausen Center for International Business: "Starbucks is in there, Kentucky Fried Chicken's been there a long time, McDonald's. So the American lifestyle is something that is very much for sale there."

Sebastian Teunissen heads the Clausen Center for International Business at U.C. Berkeley.

He says building long-term relationships with China leads to deals. It took four years for California to double exports to China. The dollar value reached $6.8 billion last year.

China is also focused on creating jobs for its 1.3 billion people. It presses hard for U.S. companies to manufacture there.

Sebastian Teunnissen: "If they think you're there just for a quick buck, you're not going to be successful."

Doing business with China clearly has its advantages and rewards. It also has its obstacles, but most of all, it does require patience.

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