Shenzhen Satellite Office Provides Comfort of Home for Businesses Entering US Markets

4/21/2010 - Andrew Pan, the primary official contact of the City of Shenzhen in North America, talkes about the services his team provides to Shenzhen companies - including Huawei, BYD, Tencent and others - as they invest in the USA.


ANDREW PAN: This office is very much a bilateral, two-way business promotion office. We do, basically, half-half. Half of our resources go to helping American companies do business in China, in Shenzhen, and half of our resources are allocated to helping Shenzhen companies do business in the US. But of course, phase by phase things change. At the very beginning – this office has been in place for almost ten years –

THE CHINA BUSINESS NETWORK: If I can interrupt – were you the first Chinese provincial or city-state level to have a representative office in North America?

PAN: Shanghai was a little bit earlier than us. Shanghai had an office about a half-year earlier than Shenzhen. But they are smaller in terms of their size, in terms of their operating budget. So we’re now becoming one of the major overseas offices among all Chinese cities. Hong Kong has another very strong office, but when we consider mainland China, we’re still the biggest.

TCBN: Got it. So can you give us an example of the ten or the twenty Chinese companies that are doing some looking into North America?

PAN: Yeah, I could mention Huawei Technologies, if you’ve heard about this telecom equipment technology company, it’s one of the best technology companies in the world. They just announced that their 2009 revenue was more than 20 billion US dollars. It’s a huge technology firm, and it’s based in Shenzhen, it’s 100% privately-owned. And they’ve already been in the US market for a bunch of years. They are in Dallas – their headquarters is in Dallas – and they have branch offices across the US. In New Jersey – near Newark – and on the West Coast in Silicon Valley, and in San Diego as well. They’re working with major telecom operators and trying to enter into these markets. They’ve hired – I think they’ve hired at least 700 people in Dallas itself. They’re very aggressive, not only in the US market, but aggressive globally, as in some new emerging markets like South America and some African countries. And if you remember, last year or the year before, they partnered with Bain Capital and tried to acquire 3Com.

TCBN: Right.

PAN: Unfortunately it was rejected by the US government.

TCBN: Right, and I was just getting to the interesting point that, essentially, your presence in North America, on US soil, is part of the extensive support to industry that the Chinese government gives to its businesses and to foreign direct investors in China. One of my pet peeves is that, perhaps because of the “American Way” – the American separation between government and industry – it is much harder for us to line up government resources to support industrial objectives. And you’ve just said that Huawei is employing 700 people or so in Texas. It must put you in an interesting position to try to assist Chinese companies that are looking to expand in the US. What do you do to help them with the US government, or what can they do to help themselves, or what can we, as Americans, do to try to help?

PAN: That’s a very good question. The US has no history of very aggressively attracting foreign investment. But recently, because of the financial crisis, a lot of local governments are saying, ‘we need job opportunities, we need some overseas investment, in order to bring up our economy.’ We’re seeing a lot of changes there. This is very good.

TCBN: What kind of changes?

PAN: First of all, a lot of trade missions. A lot of elected officials are going on trade missions to China to try to show their welcome, their invitation, to Chinese companies to come to the US to set up their operations, to acquire the assets or something like that. And at the same time, the federal, state and local governments also have some incentives. They allocate more resources – like human resources – and try to attract foreign business. For example, in New York we have New York EDC and also the Partnership for New York City, which has some funds to finance overseas investment in foreign direct investment projects. I heard that there used to be a project called China Center, and Partnership for New York City even financed several million into that, and it’s still going.

TCBN: They’re alive and well, the China Center. It’s doing quite well and it’s just been moving out of the Partnership for New York City offices into their own space.

PAN: That’s good to know. So, this is one thing, and of course we stay very close with the state and local city governments and try to provide some assistance from the government point – from the local government point of view; any incentives, any licenses and permits, as well as introducing them to other local business partners. That’s one part of it. Another part of it – what we can do, as a Chinese government representative office here, is we try to build up a platform for Shenzhen or Chinese companies to take advantage of. This platform, basically, is both a physical platform and a virtual platform.

TCBN: Is this to help North American companies branch into the Pearl River Delta, with Shenzhen as an operating base?

PAN: No, it’s more for Chinese companies to come to this market.

TCBN: Ok, I’m listening.

PAN: Any Shenzhen company that comes to the US, at the very beginning – because they don’t know the culture, they don’t know the people, they don’t know this and that – so, they can take our office space, because we have some spare office space, basically as an incubator concept that they can take advantage of for a short time. And when they settle down, they can move out, so we provide all kinds of services for them. That’s what we call the ‘physical platform,’ while in the ‘virtual platform’ we have another very useful tool for them. We have a kind of menu of service providers we can provide for them. So now we have this platform there, which is very helpful from my understanding, to Chinese companies, especially Shenzhen companies, to come to the US market.


With his years of experience both in China and the US, Mr. Pan is a seasoned consultant on market entry, business development, sourcing and outsourcing, as well as government relations for overseas companies to do business in China and for China based companies to develop “Go Global” strategies.

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