BIZCHINA / Weekly Roundup 'Transplants' a way for China to work with US By Anita Y.Tang (China Daily) Updated: 2007-06-15 14:57 For agricultural plants, it is important to find a place to transplant that will give enough space and light for the plant to grow - above and below the ground - to its full size. For a Chinese company to succeed in the seedling transplant model, the potential market should be big enough and open enough for competition, for the transplanting product to take root and grow. Successful transplant means the product gets known, accepted, desired, and secures respect and good sales in its transplanted market. The perfect opportunity for seedling transplant does not come easily because leading local players often close out newcomers to protect their market. An example of a great seedling opportunity currently exists for the Chinese in the US$3 billion global market for surveying instruments and GPS (global positioning system) equipment. If Chinese players can gain a foothold in this market, the ventures will be highly profitable for managers, employees, and shareholders by taking such innovative enterprises public. The global geomatics' market is dominated by three top players that are all publicly traded companies: the US Trimble Navigation, the Swiss Leica Geosystems and the Japanese Topcon. They all came to their size and power - with respective market capitalization of US$3.54 billion, US$2 billion, and US$1 billion - through mergers and acquisitions, knowledgeable management and access to sales channels. They have used China to take advantage of low-cost manufacturing and now are capitalizing on their international brand recognition to sell to China's huge and growing market. These incumbent market leaders, enjoying high profits, work to defend their position at all costs. They are not hiding their efforts to destroy competition. Their numerous merger and acaquisition activities help expand their product line and competitiveness while closing out any opportunity for the emerging Chinese manufacturers to get into the market. The door to the US geomatics market, and eventually to the world market, can be found in a Chinese company or companies forming a winning team with one of the few remaining independent US players. This local protector can help a Chinese surveying instruments manufacturer access the global market through the seedling transplant model. Related readings: Penalizing China to hurt US Wuhan Steel: US allegations of dumping unfair US export controls have small China trade impact China's growth, stability vital for all nations As Minister Bo emphasized to American business and political leaders in Chicago, the go-global effort for Chinese companies is inevitable. A Chinese team winning in the global geomatics market helps China achieve national goals for innovation and global business. Chinese survey instrument manufacturers need to find ways to transcend their position - to offer a showcase to other Chinese enterprises - and they need to do it soon. The seedling transplant model is an innovative technique that can lead to success. 1 2 3 (For more biz stories, please visit Industry Updates) Learn Chinese, Chinese language

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