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Tales from the Development Frontier
Offices of foreign-company representatives. Many large overseas buyers
have set up subsidiaries in China to supply goods for their parent companies and for other clients. Such offices offer services that are similar to those of the FTCs, but focus on the interests of their parent companies. They identify manufacturers and distribute orders according to capacity and specialty. An executive at a bra producer, Chung Tai Garment Factory in Shenzhen, described the system as follows: Our clients have their own supply offices that identify manufacturing units, distribute orders, and check quality through their representative office in Hong Kong. For example, our company deals with an agency of Maidenform that gives us orders not just for the Maidenform brand but also for other retailers such as Costco, Walmart, and so on. Also, the agency is responsible for the shipment of goods and the distribution of final goods. Maidenform is both a brand and a leasing agency. The agency [Maidenform’s representative office] is very supportive; it helps us upgrade technology and assists in the design process. They have their own designer. … In some cases design firms send their own technical team over to help them. (July 2012 interview)
The director of the trading department of Qipai Motorcycle Co., in Xinhui District, Jiangmen, Guangdong Province, offers a more detailed description of the operations of the department: The company has its own trading department, not independent, which focuses on the international market only and not on the domestic one. The department’s main responsibility is importing raw materials and, in general, looking for profitable opportunities, such as importing goods unrelated to our products, like electronics, and making a profit by reselling them in the domestic market. In terms of procedure, we compile the feasibility study, pass it to headquarters to raise capital, and conduct the trade. In addition, we find clients through trade fairs and our parent company’s network and help with trading logistics. (July 2012 interview)
The role of government. The government has played a key role in cre-
ating markets for trading intermediaries by lifting the restrictions that formerly preserved foreign trade as a state monopoly; by liberalizing the access to trade, thereby creating the environment necessary for fair competition and allowing trading intermediaries to take full responsibility for their profits and losses; and by promoting export-oriented