CHARLES F. EBERT JOINED A business delegation to China last year to discuss joint ventures to make hand and electric tools. During his week there, he became proficient with chopsticks but queasy about the prospects for his company investing in China.
Building and managing a plant in the People's Republic would have consumed too much of his time. "If I went into something like that," Ebert says, "I would certainly want to keep a finger on it. But that's such a long way from home to keep a finger on it."
China is tantalizing to many American executives, but it will be a difficult market to crack for small business. Marco Polo made a go of it in the thirteenth century, but today's entrepreneur may have to defer to large companies with much greater resources.
Few small companies can afford the ne China trade. Office space is expensive and so limited that most companies conduct business from hotel rooms. "In many cases, you have to go into it knowing you are going to lose money for many years before the payback comes," notes Jeffrey L. Lee, a China specialist in the U.S. Commerce Department.
Companies that build plants in China can't take their profits home very easily. They must usually generate foreign exchange, for example, through exports, a burdensome requirement for small businesses. Oswald Rosenholm, president of OAR Tool & Die Co., of Providence, talked with the Chinese about a joint venture to help them make better plastic molds. The Chinese wanted him to export the lower-grade molds that they were already producing. "It has to be a two-way deal," says Rosenholm, who turned it down. "You also have to buy something from them."