Henry Beck has spent much of his legal career advising small to mid-sized businesses on issues ranging from startup venture capital to mergers and acquisitions. For many of his Connecticut clients, Beck is adding a new piece of advice these days: consider China.
It’s a message he’s more committed to than ever having spent 18 days in several Chinese provinces in May, where he chaired an international law conference.
“The size of the population and the construction projects underway were impressive,” said Beck, an attorney with Hartford-based Halloran & Sage, who specializes in international transactions. “There’s more infrastructure development now [in China] than there has been in the U.S. in the past 50 years.”
That investment has helped fuel a growing and consumer-hungry middle class in China, which Beck says provides a great opportunity for Connecticut companies, both large and small.
“There are a number of technology companies in Connecticut with software and app products that could tap into a strong consumer demand in China,” Beck said. “There are also great opportunities for biomedical businesses given the public health issues and a population of more than one billion.”
And as major manufacturers like Farmington-based Otis Elevators operate plants in China, many small businesses across Connecticut and the U.S. have expanded their reach into international markets as well. “We’re seeing smaller players in the supply chains for big manufacturers, starting to do more business in China,” Beck said.
In fact, more than 90 percent of Connecticut’s exporters in 2012 were small or mid-sized companies, which sold products in more than 198 countries, according to data from Business Roundtable, a consortium of U.S.-based CEOs that tracks public policy and business trends. In China alone, Connecticut companies exported more than $916 million in merchandise and more than $335 million in services.
Those numbers don’t surprise Anne Evans, district director of the U.S. Department of Commerce, Commercial Services Division. “Per capita, Connecticut is one of the top-exporting states in the country,” Evans said, noting the Nutmeg State exports nearly $16 billion annually worldwide. “It’s a huge bright spot in our state’s economy.”
And that’s a good trend for Connecticut, Evans said, given that 95 percent of the world’s population is outside the U.S., including 20 percent in China alone.
Helping businesses pursue that opportunity and navigate a market that is still fraught with intellectual property risks, is a big part of what Evans does.
“We assist nearly 3,000 companies in the state and many are interested in the Chinese market,” she said. “We provide insights into practical and actionable market intelligence into the world’s fastest-growing economy.”
A big advantage of the Commerce Department for Connecticut businesses, Evan says, is its worldwide reach, an important factor in a state where one-in-five jobs is linked to international trade, according to Business Roundtable. “We have colleagues in Washington, D.C. who are trade specialists for nearly every industry, as well offices in more than 80 countries that understand these international markets first-hand,” she said.
Evans is also trying to help the small business owners of the future. This August, in partnership with Junior Achievement, Evans will be joining 20 students from Wallingford on a nine-day trip to China to meet with diplomats and commerce experts.
“When countries trade well, they typically peacefully coexist,” Evans said. “We need to expose more students to international experiences; in the next five to 10 years, these kids will be working for companies that need to have knowledge of international markets.”
Beck said he agrees. “We’ve got to recognize in the U.S. the need for more students to learn Chinese in our schools,” he said, noting most signs in China — even for small businesses — are in English and Chinese.
It’s a message he’ll continue to push as he talks to clients. “The market in China may not be right for all businesses,” Beck said, noting the set up time for a business, cultural differences, and legal issues can be both time consuming and costly. “A business needs to be willing to take a risk to enter this market and it needs to understand that the Chinese, while embracing our Western consumerism, are motivated by different things than we are.”
Evans, who’s been to China seven times, understands those risks, but sees the potential too. “It’s simply a huge market,” she said. “And you can’t ignore a big market.”
