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However, from the standpoint of Jamaica, while many opportunities exist for continued growth and fostering of trade relations, there is still work to be done to reap the full benefits.
Many local companies are now developing trade relations with China, with many bringing in items to export through Jamaica to the Caribbean and Latin America. Some of these items being imported into Jamaica from China include appliances, generators, motorcycles, television sets and electronics.
With this distributive trade, Jamaica is now in need of warehousing space. Based on requests both from Jamaican and Chinese business people, space is needed for both warehousing and assembly plants. Warehouse space of 36,000 square feet and upwards to be used as assembling areas for imports, is a common required.
In addition to appliances and electronics, shoes are also big business. These items are brought in not only for sale in Jamaica, but are also exported throughout the Caribbean and Latin America, making Jamaica a distribution hub for Chinese imports.
There are in fact a number of Jamaican companies currently trading with China, including UBT Corporation Limited, Kingston Logistics Centre Limited, BASHCO Limited, APL Freight & Company Limited and VONS Group of Companies.
Since China opened it doors to the western world, many countries, including Jamaica, have taken advantage of the opportunities offered. Many Jamaican entities, both governmental and private, have traveled to various trade shows in China to facilitate the developing trade relations between the two countries. One such company working to enable trade relations between the two countries is China Sources International.
According to Winston Barrett, CEO of China Sources International, the idea for the company was borne out of a realisation that China was fast becoming the manufacturing centre of the world. He stated that the sooner more countries become aware of this fact, the better it would be for their economic survival. The company started after his fourth visit to Eastern Asia, but first visit to Mainland China, when he went to a trade exhibition for a furniture manufacturer in September 2006, since his core business is office furniture.
Barrett said on his visit, he met with a Jamaican whom he had heard about via the Internet, who was living in China. After meeting with Dr. Nicoleen Johnson, he had the idea to develop a company that could facilitate trade (brokering) between Jamaica and China.
China Sources assists Jamaican and other Caribbean businesses to source a wide range of products from China, with the only restriction being that the consignment is at least a container load (either 20-feet or 40-feet). However, Barrett stated that the company’s focus is currently on sourcing for the construction industry.
In response to the question of Jamaica being in need of additional warehouse facilities to meet increased demand for storage, Barrett said this was not an immediate issue, but could become so in the future. He said from his own knowledge, businesses were buying based on their current available warehousing space. He noted that Kingston Logistics Centre and ZIM Integrated Shipping Services were building warehouses on the Kingston wharf, to facilitate the need for container storage.
Challenges
Barrett said the main challenges he had seen in trading with China were:
1)”Delivery, in that orders must be placed in advance of when needed. He explained that it normally takes a minimum of eight weeks between ordering and the shipment from China to reach Jamaica.
The lingering perception that goods manufactured in China were of poor quality. He empathetically stated that this was not true and we “need to get over it”. He said customers needed to appreciate the fact that a major portion of OEM (Original Equipment Manufacturer) products are created in China. That is, the products are made in China and the labels of the major companies are then affixed to the item.
He did note that countries such as Germany and the USA were still hard to beat in terms of quality, but said China was very much a force to be reckoned with. Barrett said Chinese-made goods represented value for money; if you pay for a $50 item, you will get $50 in value.
The businessman said persons should bear in mind that in Chinese business culture it was discourteous to refuse to do business with someone. Based on this, Chinese businesspersons will bargain and reduce their prices so as not to lose the customers’ business. However, one must be careful about how to bargain, because a reduced price could also mean a reduction in quality.
“Not every Chinese company is registered as an exporting company and, as such, cannot export to other countries. This he said was the only regulation that could prevent business between a Jamaican and a Chinese company.
Barrett said one word of advice for persons considering doing business in China was to ensure that invoices are stamped with the company’s seal (or chopped as it is referred to in China). Without this seal he noted that if there were any disagreements re shipment, the importer had no recourse in Chinese courts. He said a brokerage company such as China Resources International helps to mitigate against this, and ensured that only quality goods are received. To prove his point, Barrett shared an email he received from his Jamaican partner in China, Dr. Nicoleen Johnson, concerning a shipment of sofa chairs.
“Check completed. Good job overall; in today’s inspection I only discovered one other issue. Item hb102 in the catalogue all the cushion covers seem to be made from the same material as the base, however…the cushions are made with pu material, which has patterns on it and looks very plastic. …I have requested that they redo the cushion with the same material and they have agreed.”
This he said goes to show that each shipment is checked firsthand before they are loaded onto the container for shipping to Jamaica, and because of this the Chinese manufacturers are willing to satisfy their customers.
In terms of intellectual property concerns that many countries have in relation to doing business with China, Barrett did not believe that was an issue. He said companies such as China Resources do due diligence to ensure that no internationally-branded products are purchased from companies that are not authorised to sell them. He advised that if an importer was in doubt, they should ask to see documentation, and seek the assistance of China Sources International.
He said China-Jamaica (and Caribbean) trade offered great export opportunities, and Jamaica can become a distribution centre for Chinese goods. He said that new entrants especially, would be best served by going through a sourcing agency to avoid some of the pitfalls, especially if their risk aversion was low.
Source: Jamaica Business Magazine
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