Atlanta companies that want a presence in Asia must be in China because of its importance to the region and they should seek out a business partner to help them there, a China authority said at the Federal Express/Georgia Tech trade conference held here Oct. 30.

But Denis Simon, director, Center for Technology and International Affairs of The Fletcher School of Law & Diplomacy in Boston, added that companies which enter the market now should not expect to make any profits for at least three to four years, citing a recently published study by the international accounting firm of Arthur Andersen.

Calling China “a catalyst for growth” in the region, Dr. Simon said that it should not be considered as a manufacturing site because of cheap labor only.  A more significant reason for manufacturing in China, he said, is to develop “an alliance partner” for competing in the entire region of Asia.

Although China has become more developed with “brand consciousness” and “conspicuous consumers,” he said that companies must be aware “that all relationships may change tomorrow.”

Nevertheless, companies should not be deterred, but learn to cope, he added.  Nor should they be put off by the possibility that key incentives in China which have been put in place to attract foreign companies will be removed.  “There has been so much squandering of domestic capital with so many funnels to get money out, it probably is about time to do some tightening up,” he said.

For more information about the conference, call Georgia Tech’s Center for International Business Education & Research at (404) 894-1462.