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Pittsburgh groups look to make inroads into China

By Joe Napsha
PITTSBURGH TRIBUNE-REVIEW
Tuesday, March 22, 2011

As Zipei "Jack" Tu sees it, China and the United States must overcome misunderstandings before economic relations can improve.

"Most Americans regard China as a competitor that is trying to take away their jobs to China. In China, America is regarded as a friendly country from which they have things to learn," said Tu, manager of Ross-based software company KIT Solutions LLC and president of the China Association for Science and Technology-Pittsburgh Chapter.

Formed 17 years ago, the group has more than 200 members and is recognized by the Chinese government. It and the Pittsburgh-China Chamber of Commerce, founded in September, have a common goal -- to improve relations between the countries in order to open the Chinese market to Western Pennsylvania companies.

Companies in the Pittsburgh region logged sales of $816 million in China in 2008, according to the Pittsburgh Regional Alliance. But language and cultural barriers persist, those who do business with China say. Overcoming those differences can help business relations, said Fang Liu, a chamber founder and vice president of overseas operations for Fresh Link, a Cranberry manufacturer of window hardware.

"The more they know about each other, there is less conflict," Liu said.

But, says Frank Li, a Squirrel Hill business consultant and another chamber founder: "I'm not sure there's a misunderstanding. We need to understand the culture better. Once you understand that, we are a similar kind of people."

The organizations want to make inroads into China at a time when the economic relationship between the countries is rocky, in part because China's undervalued currency keeps U.S. goods priced high and Beijing's subsidies to industries make it easier to export goods to the United States.

American business groups and labor unions criticize the Chinese government for subsidizing exports such as steel, pipe, wood and manufactured products at less than the cost of producing them.

The Pittsburgh-based United Steelworkers of America strongly opposes subsidies for China's exports, which the 850,000-member union blames for the loss of thousands of jobs. The union filed a complaint with the U.S. Trade Representative in September, alleging China violated World Trade Organization rules in an attempt to dominate the global market for renewable energy products through subsidies and trade barriers.

The Chinese can play "hard ball" when it comes to putting barriers against imported goods, but the United States also provides subsidies -- export credits to companies, said Gary Quinlivan, an economics professor and dean of St. Vincent College's Alex G. McKenna School of Business, Economics and Government.

"The Chinese say the same thing about us" regarding subsidies, said Quinlivan, who traveled to China more than two dozen times.

Against this backdrop, the newly formed chamber of commerce is working with several companies in the biotechnology and advanced materials sectors on business opportunities in China, said Li, who declined to identify the companies.

"We feel we need to provide a platform to assist small- and medium-sized businesses here to improve communications with small- and medium-sized businesses in China," said Liu, who came to the United States 25 years ago to earn her master's degree in business at the University of Pittsburgh.

Tu, who worked in the foreign trade office for 10 years in China, wants to encourage the region's Chinese population -- he estimates 10,000 live in Western Pennsylvania -- to establish businesses in China.

There is a great opportunity for technology companies to do business in China, particularly in the health care field, said Xioayan Zhang, CEO of KIT Solutions and a member of the Chinese science and technology association.

"We know there is a big market. Western Pennsylvania is very strong in information technology," Xhang said.

The chamber is "a good first step" toward increasing business opportunities in China, said Mark E. Stulga, CEO of China-U.S. Strategic Development Group LLC, a White Oak-based consulting company.

"There are many middle-market companies in the region that should have business in China and they don't. I think it is a lack of experience and expertise," said Stulga, who represents companies such as homebuilding supplier 84 Lumber Co. in business dealings in China.

Representatives of the organizations want to foster two-way development. Only three Chinese companies operate in the region, employing just six people, according to May data from the Pittsburgh Regional Alliance.

By contrast, India has six companies employing 325 people in the region. Japan tops Asian countries with 35 companies employing 10,389 workers, most of whom work for Toshiba Corp.'s Westinghouse Electric Co.

Joe Napsha can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 724-836-5252.


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