Business Outlook 2001

Far East eyed for potential growth
New China trade seen as keystone

By Caroline Louise Cole
GLOBE CORRESPONDENT

CHELMSFORD - As Jerry Goldlust contemplates how to grow his small   business this year, his thoughts are turning east.  To China, that is.   The Clinton administration's push to establish permanent normal trade relations with China last summer has allowed owners of small businesses like Goldlust to think about the potential of the Asian market, China specifically.  "It is hard to estimate numbers, but the potential in China is huge," said Ed Soong, who has launched a Burlington-based service company, AsiaMart, to help business owners like Goldlust sell their products in the Far East. 

     Among the products Goldlust and his company, Dielectric Sciences, produce, that he believes he could sell in China, are high voltage cables; the fat electric cords that power equipment like X-ray and CAT scan machines.  Goldlust has 50 employees in Chelmsford and 50 in Essex, England.  “The product isn’t particularly exotic, but these cords, which carry up to 75,000 volts of electricity, are an integral part of equipment built by all the major manufacturers, companies like General Electric, Phillips, and Toshiba," Goldlust said.  And while high-voltage cable equipment has been a profitable line for Goldlust since his 30-year old company took on the product in 1988, sales are relatively flat, he said.  “We've pretty much captured the market in the United States, Europe, and South America," Goldlust said. 

     "The real growth potential for us is in Asia, China in particular, as those populations become more sophisticated and demand high-tech medical testing.  “Currently, cables made in Chelmsford are making their way into China on equipment sold there by his American-based multinational customers.   “What we are looking into, however, is actually having our own presence in China so that we are able to sell directly to Chinese companies that we expect will be making this equipment soon," Goldlust said.  “That could mean partnering with a local Chinese company, and making the cables there."  Goldlust said this doesn’t mean any changes in his work force in Chelmsford because the high cost of shipping the heavy wiring makes it cost-effective to manufacture near where the product is being used.

   "This would be additional volume," he said.  Goldlust said his first hurdle is the language barrier.  "We're certainly not China experts on any count," Goldlust said.   'We're not big enough to just pick up and go to China and build a factory, but our feeling is that if we don't start making cables in China under some scenario someone else will." 

   Establishing permanent normal trade relations with China has allowed the world's most populous nation to join the World Trade Organization, said attorney Michael Meagher, who is a China trade specialist with the Boston law firm of Bums and Levinson.  "Being part of the WTO gives companies, such as Dielectric Sciences, a level of comfort in their dealing with their Chinese counterparts," Meagher said.  "The WTO is a rules-based, quasi-governmental agency, and now that China has to pay attention to WTO requirements, that gives a level of predictability to global business relationships."

   And the lowering of trade tariffs in the process means US companies are facing "a level playing field" as they begin to develop markets in China, Meagher said.  Soong, a native of Shanghai, who spent 17 years with the old Wang Corp., six in its Asian Pacific operations, launched his Asian consulting business, AsiaMart, in 1996 to help companies around the world do business in China.  "What we do is link suppliers in China with businesses in the United States and vice versa, for example," he said.  AsiaMart is taking advantage of the Internet to connect trading partners, he said.  "Today, we have over 1,600 members in 97 countries," Soong said.

   While Soong is upbeat about China's potential for American businesses, he said profits often turn on the small details of any business relationship.  "Just getting the address right for wiring monetary actions can be a headache," Soong said.  "Sometimes the most important thing we do is provide simple things like the most updated fax numbers and e-mail addresses for Chinese customers."

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