Doing Business in Washington State Debuts In China WSBA International Practice Section's Publication Key In Encouraging Foreign Trade

Monday, January 3, 2011 - 01:00

On September 13, 2010, Governor Christine Gregoire led a delegation of more than 100 Washington business, education, science, and technology leaders to China and Vietnam in an effort to expand export opportunities, encourage new investments, and create new jobs in Washington state. We were among the delegates invited to join the governor on this trip.

To support the governor's mission to China, the WSBA International Practice Section, in collaboration with the Washington State Department of Commerce, released the revised and updated fifth edition of Doing Business in Washington State. The guide aims to introduce foreign investors and business representatives to fundamental business issues in Washington. By helping to create a basic understanding of our legal and business concepts, the guide provides foreign investors with the confidence needed to succeed in doing business in our state. So along with our luggage, we packed well over 1,000 discs containing English with Chinese translation of all 27 chapters and a video introduction to the many business and recreational opportunities in our state, narrated by Governor Gregoire. The guide was featured at our business meetings in Beijing, Shanghai, and Guangzhou and was scooped up by the Chinese business and political representatives who attended.

So why did the governor schedule this mission and why did she ask the WSBA to support it with our book? The answer became clear as we prepared for, and then participated in, this important trip. Our state has a long and cooperative relationship with China dating back to the 1860s, when the first Chinese immigrants arrived in Seattle. In 1909-1910, the University of Washington established its first China studies program. Washington's positive relationship with China continued with its political leadership, including Senator Warren Magnuson, who became a leading advocate for normalized relations with China during the 1950s, and former governor, now U.S. secretary of commerce, Gary Locke. China's political leadership is similarly quite friendly with Washington; every Chinese president since Deng Xiao Ping in 1979 has made Seattle the first stop on official visits to the United States. When Chinese president Hu Jintao visited Seattle in 2006, he commented that Washington State serves as an important American gateway to China and the rest of Asia.

In 2005, Governor Gregoire led her first trade mission to China. The business ties made during that trip have since netted $23 million in sales for Washington companies. Our governor decided to return this year, in large part because China is a country that values commitment and relationships. They call it guanxi, meaning mutually beneficial relationships. When doing business in China, one must understand the cultural significance of guanxi . Governor Gregoire's return trip to China with several business leaders from our state showed the Chinese people, government, and businesses that Washington remains dedicated to continuing our long and prosperous relationship with China. Washington and China have very good guanxi .

Despite the economic downturn in the United States and most of the world, the Chinese economy grew nearly nine percent in 2009, due in large part to strong government stimulus investments. This growth has created a large and growing middle class in China, who are demanding even more world-class products from around the globe. They are, in fact, playing an increasingly important role as consumers, much to the benefit of Washington exporters. China is also the fastest-growing source of global tourism, and it is expected that by 2012, nearly 100,000 Chinese tourists will visit our state annually.

To capitalize on this rapidly growing economy, Governor Gregoire established the Washington Export Initiative, designed to open additional export opportunities for Washington businesses and to create new jobs for Washington residents. Under the initiative, state agencies are charged with helping to increase the number of Washington exports by 30 percent, thereby aiding 5,000 Washington businesses to achieve $600 million in new export sales over the next five years. With 8,000 Washington companies currently exporting products and services overseas, Washington is the largest U.S. exporter on a per capita basis. One in three Washington jobs is tied directly to trade. Efforts to expand Washington's strict trading opportunities complement the national export initiative and President Obama's plan to double U.S. exports by 2015.

Doing Business in Washington State , authored by several WSBA members, was revised and updated at the request of James Palmer, the Washington State Department of Commerce economic development manager. The plan was to use it to support the governor's trade mission to China. Professor Tarrant Mahony, of the Temple Program, Tsinghua University School of Law, and Professor Daniel J. Mitterhoff, director, Beijing Autumn Semester Program in Comparative Business Law, Central University of Finance and Economics, coordinated the translation of the book from English to Chinese. Finally, Margaret Morgan, WSBA associate director for continuing legal education, helped us assemble the finished product. This comprehensive "introductory how-to" publication on business investments and opportunities in Washington covers the A to Z of international business law and procedures from entity creation to alternative dispute resolution; from tax law to clean-energy technology; and from the Uniform Commercial Code to commercial litigation. Doing Business in Washington is the one-stop shop for nearly all fundamental legal issues related to business. There are also future plans to translate the guide into other foreign languages, including Spanish, German, Korean, and Japanese.

The China portion of the governor's trip was focused on improving market access for Washington products and businesses, while forging a closer relationship with Chinese companies interested in establishing a presence in Washington. At the same time, the trip encouraged an increase in leisure and business travel to Washington and promoted educational and cultural exchanges between Washington and China. Although the trip to China was only a short six days, results were seen immediately: the American Enterprise Center in Shanghai pledged to invest in and assist two Washington biomedical companies, Geospiza and Iverson Genetics, to enter and succeed in the rapidly growing Chinese market. The Center also told the governor that it is looking to invest in possibly hundreds of Washington companies over the next five years.

The success and effectiveness of the guide was evident throughout this trip, as delegates and guests who received the guide voiced their appreciation for the information it provides. The impact of this guide, like the governor's trip, will be felt for many years to come, helping to place Washington state as the premier destination for international businesses and visitors.

Randy J. Aliment and Tracey X. Zheng traveled with Governor Gregoire on this trade mission to China. Mr. Aliment is a member in the Seattle office of Williams Kastner and serves on the firm's board of directors. He collaborates extensively with the firm's Chinese affiliate, Duan & Duan, working in their offices in Shanghai, Beijing, and Hong Kong in his representation of U.S. and Chinese entities in various transactions. He is the editor of, and a contributing author for, Doing Business in Washington State. Ms. Zheng is a senior associate in the Seattle office of Williams Kastner. Her legal practice focuses on tax law and commercial litigation. She was a contributing author for Doing Business in Washington State. This article, which appeared originally in the December 2010 issue of the Washington State Bar News, is republished with the permission of the authors and the Washington State Bar Association.