October 31, 2010

Tech council heads to China to forge ties in growing market

The reason for going to China is hammered into Steve Zylstra on a regular basis.

Every time the president and CEO of the Arizona Technology Council hears a speech by Ángel Cabrera, a native of Spain and president of Thunderbird School of Global Management, it becomes clear to Zylstra why he and others need to visit China.

"One of the things he does is he'll put up a few charts of various commodities like cellphones," Zylstra said. "He'll show how many Americans own cellphones and what the market penetration is. Then he shows how many Chinese own cellphones and he'll show the market penetration there. While the number of Chinese that own cellphones actually exceeds Americans, only a tiny percent of the market has been captured, while the American market is pretty much fully penetrated. He does this for several different kinds of products just to send the message the future markets to the world are places other than the U.S."

Beginning Wednesday, Zylstra will lead a delegation of 15, including two government officials with the Arizona and U.S. Departments of Commerce, on a five-city, 10-day trip to China.

The trip was organized after some of the technology council's board members suggested it.

"Usually you see the economic-development folks doing that, but they're usually focused on trying to attract foreign direct investment or they're trying to attract a company to locate here," Zylstra said. "But the question was posed for a little different reason. Increasingly, people understand that the emerging opportunities in the world are in places like China, India, even Brazil, for the emerging economies."

He said the council has member companies that have an interest in potentially manufacturing in China. Some hope to sell their products in the Chinese market and others are interested in finding distribution partners.

James Powers, chairman and CEO of iLinc, a Phoenix-based provider of Web and video conferencing, was one of the members who suggested the trip.

"It's a great way for small to midsize companies to be exposed to business opportunities in China," he said. "As an individual, putting together a trip like this would be somewhere between daunting and nearly impossible. The big companies - the Intels, the Avnets, the Honeywells - those organizations are in China on a regular basis and have many of their executives that are. But for the small to midsize businesses, it's more difficult to open the doors over there."

This is the first trip to China for Powers. His company employs about 50. He has a background as an entrepreneur and moved here about 10 years ago after merging a health-care company he started in Nashville, Tenn., with a public company in Phoenix.

"It's an introduction to the culture of Asian business, and I want to begin laying the groundwork for future iLinc Web- and video-conferencing-software distribution," he said.

The group from the technology council will visit Beijing and Shanghai and take trains to other cities. They will spend time in each city, visiting with local-government officials, something Zylstra said is "sort of a prerequisite when you're doing business in China."

The company that booked the trip has relationships with about 75 of 150 industrial parks in the country, Zylstra said.

"It's our first attempt at something like this. I'm sure we'll learn much. We are going to do a few side trips. We're going to see the Great Wall and we're going to see the Terra Cotta Warriors, but other than that, it's primarily a business-focused trip."

by John Yantis The Arizona Republic Oct. 26, 2010 12:00 AM

Tech council heads to China to forge ties in growing market

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