Forums: Discussions for entrepreneurs and small business.

Hi,

I live and work in Qingdao, China.  I`m involved in logistics and trade.

Specifically, I can work on OEM projects, and can source products, but I specialize in building materials.

I can also outsource work to software companies here.

Let me know if I can help anyone.  Even students or people who are just interested and have any questions about China or life or the business world and culture here; maybe I can dispell any rumors or just answer some questions about the challenges here.


Daniel

Sure.  Tell me what you need and I`ll be happy to ask someone who is in the field if they have prices for similar fabric on hand.
You better be ordering a lot though, because your minimum purchase will have to fill a 20` container, both because of minimum order costs and the restrictive price of shipping.

As far as finding a reputable company, it`s not so hard but it`s certainly a cultural difference.  If you ask for one type of material and they give you a price, you start to negotiate.  If you negotiate too low, it`s coming out of the quality, not their wallet.  They will not tell you that it can`t be done, which is simply cultural - it`s not that they are lying or anything, without your pressing for a while.

Daniel,

Welcome to SUN.  I`d definitely like to utilize your area expertise sometime in the future.

 

jamie

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Jamie Dufrene
Rajin Enterprises
http://www.jceconsulting.net/

Hey Welcome to SUN!  I am new here myself and found that people here are very helpful just like you.  I am sure that you will fit in well and network with ease.

My partners and I are seeking jumbo international development projects.  I have more of an interest than they do in the Asian markets.  I read recently on another forum that this guy wanted help purchasing a home in china where he is from. 

 

asleepingpig   China. October 15 2006 wrote: In eastern China and southern China, the young people who entered the society in the 21th century, found that it`s a far and far dream to buy a house. Your income increases a 15% for one year, but the house price can increase a 50% for one year. Firstly, let`s have a general understanding... In Shenzhen city: average GDP in 2005: $7500 average income in 2005: $3500 (it is counted by the total population) The average price for a house of 100 square meters: $90,000~$120,000 In Shanghai city: average GDP in 2005: $4500 average income in 2005: $2100 The average price for a house of 100 square meters: $90,000~120,000 In other 30 cities in rich areas: average GPD in 2005: $3000~6000 average income in 2005: $1500~3000 The average price for a house of 100 square meters: $50,000~120,000 Please note that the average income can`t reach 50% of the GDP! Normally, a young who just graduates from the college earns $3000~$5000 in the first year. And after three years maybe he can earn $5000~$10,000 per year. So you can count, you must spend 10~20 years to buy a house without eating, wearing and so on. I have worked in a small coastline city for 5 years, at present, my girlfriend and I earned around $12,000 in 2005.To buy a house of around 120 square meters, I have to pay $75,000, plus $15,000 for furnitures and decorations. But I only have around $10,000 in the bank, I am being crazy every day for the left $80,000! My classmate, Mr. Ruan, who began to work in Microsoft China as a normal employee in Shenzhen city years ago. He earned around $18,000 in 2005, but unfortunately in the inner area of Shenzhen city, it`s very hard to find a house below $120,000. Maybe you can find 20%~30% of the whole GDP is from the varies enterprises for building and selling the grounds and houses. The damn GDP! PS: The Australians are happy because their Iron ore prices increase 70% Chinese steel factory are happy because their steel prices increase 100% The government people are happy because the estate company send them 10% discount for getting the ground. The house building company are happy because their can still earn 10% The Estate company are happy because they can borrow $100,000,000 from the bank to build the house and then sell it to the bank to get $150,000,000 from the bank. The bank are happy because they get the profit at last, and will not worry about the disappeared money which belong to the government. The government are happy because the GDP in the first half of 2006 increase for 11%. But we are very angry that we become slaves for the house!

It seems tuff over there to get a house. 

Well basically I am looking for leads in china.  Someone who is in the Real Estate industry or who knows the lay of the land.  These people we will make a part of the team as our Asian china contact who will become a project manager for us their.  Of course you will get a percentage of the deal for referring us.  If you know of any development in where else in the world no matter the size ( the bigger the better) please let me know.

I`m not an expert on such things; it`s not anywhere near my business, but I do read newspapers, and I do have some anecdotal evidence for you.

- I`ve met taxi drivers who have two or three houses, nobody living in one or two of them.  They may have one or two children, very young, and they must buy a house for them some day, so they`ve already purchased it.  It doesn`t matter if they can`t rent it out because they`re not paying a mortgage.  That`s one thing driving the price up.

- Next there`s a troubling mix of economic policies here.  For example, a little bit to the east, the local cadres will not allow someone who works here in Qingdao to buy a house there (avoiding suburban sprawl).
That would be OK if China had a normal internal migration pattern.  They don`t - probably half the population is from a western province (I bet the kid in the post you cut and pasted is from the countryside, and doesn`t want to go to the house that his parents could afford for him) not to mention the half million Koreans who are buying houses like they are candy, plus people who haven`t migrated here but are privately investing.

The banking system is terrible.  No percent of a bank`s portfolio has to be dedicated to building low income housing projects, so every bank is after the high profit projects, all at once, since development is happening so fast because of foreign investment (and, of course, Chinese investment in the dollar; we`ll get to that later).  Bad loans of up to 25%, even higher.

In response, the central government has raised taxes on second-hand houses.  Some of them as high as 50%.  So, if I want to sell my house that I bought two years ago, I will have to price it at 66% of what the new houses are selling for just to have my price the same as a new one.  That, of course, means that the price would have had to grow by 20% or so year-on-year just for me to break even.  Obviously, it doesn`t - it`s designed to protect the banks from racking up bad credit.


I`m going to have to cut this short as my one-year old daughter just came home from the babysitter...  Write me back to remind me to finish later.

For now, here`s the punchline:

When China decides to divest the dollar, the western provinces are going to develop.
Stay away from coastline real estate, and somehow put your money in the western provinces; if you don`t know enough about Chinese business to do so successfully, I suggest you put your money in a Sino-European investment company, or find different avenues of investment.

I`m really no expert, though.

Jeez!  China seems all backwards regarding it`s real estate market lol.  I can`t believe that there are many taxi drivers with that many houses nonetheless able to keep them tenant free wow. 

Sigh unless we check out the western areas I don`t think there will be anything worthwhile elsewhere unless we purchase a bank which may not be a bad idea.  We are really looking for beach front property in locations around the world that are about to grow in tourism.  From the sound of thing in China I should stay away from the cost as you mentioned.  I guess I have more research to do. 

I had some stats from 2005 along with some history and even that information didn`t look good.  Well thanks for the time you have invested here from your own experience.  I am looking forward to hearing the rest of your post.

P.S. I can see that you love your little girl.  I wish you the best of luck creating a secure future for her.

daniel,

ni how!

so glad to have a part of our growing community!

could you provide the following - i think people would love to read about:

• any examples of projects you`ve done for US-based small businesses
• any obvious tips you have for successfully getting a product manufactured in china if you`re a US-based company.
• what are the minimum requirements (beyond filling a shipping container) for someone who`s contemplating the prospects of getting their product(s) made in china?

again, welcome aboard!!!


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Rich Sloan , Co-Founder, Chief Startupologist, StartupNation

Ahh,

Thank you Rich for reminding me that I was supposed to segway into his area of expertise.  I will be sure to do so next time.  I would love to hear the answers to your questions as well.  I hand over the floor to Daniel.

ahh... the virtual floor...

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Rich Sloan , Co-Founder, Chief Startupologist, StartupNation

Nimen hao,

Concerning China, I had a lot more to say, but I guess it boils down to two things:

1) If you`re looking at real estate, it`s long-term.  I have faith that these apartments here are going to be worth $1,000,000 in 10 years or so.

There`s a gorgeous development going up right on the coastline of Qingdao.  If you want more info about it, reply.

2) Will China divest in the dollar?  Have no idea.  Is there a thread calculated the current US balance of payments and account deficit, calculating when the US government will no longer be able to pay its bonds?
Of course, there`s also the military aspect.  The dollar also controls Saudi Arabian (and Iraqi, whenever it starts flowing again) oil.
The first part is a lot more predictable if anyone knows about it.  I`d love to see a thread started by someone either knowlegable or having the time to research it.


Anyway, to the other questions:

• any examples of projects you`ve done for US-based small businesses

Yes.  Maybe later.  Some disastorous, the more recent ones more successful.

• any obvious tips you have for successfully getting a product manufactured in china if you`re a US-based company.

1)  You need someone reliable and honest.  (There is no accountability in international business.  No one is going to start an international suit unless there are millions at stake.)  Manufacturers will bribe inspectors.  You probably need an American as there are cultural differences (definitions of lying and stealing, for example).

2)  Have a checklist, very thorough of everything that must be checked, the percentage of the order that must be checked, etc.

• what are the minimum requirements (beyond filling a shipping container) for someone who`s contemplating the prospects of getting their product(s) made in china?

When someone is getting a proprietary product made in China, they don`t need to manufacturer a full container.
If you have a proprietary product, you can get great saving by having it made in China.

You were probably alluding to a previous post talking about cloth when I suggested that in order to get savings, one would have to order a container or more.
This only applies to commodities, as competition from so many manufacturers keeps the margins low.

This is a great misconception about China.  People expect to make millions of dollars importing carpet or plywood.  If China is after an American industry like carpet, carpet manufacturers have already gone to the government for protection, or, if that government protection is running out of time, have already changed the industry to be more capital intensive or otherwise take advantages of the US.

You`re not Wal-Mart, so don`t expect to make a billion dollars on commodities.

However, if you`ve got a proprietary product that you can sell loads of, you`ll see great saving manufacturing it in China instead of the states.


Merry Christmas.

Daniel