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On The Scene: Finding Oregon's path to China

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On the Scene
Monday, May 24, 2010


A business relationship with China does not just happen: it needs to be cultivated. The governor's office just sent a delegation to the country to work on this relationship, forging links that are particularly important in China, where the government and business sectors are so connected.

Four experts from the realms of academia, government, law and business came together last week in a PSU classroom to discuss “the China opportunity” for Oregon's economy.

“In China, the government says ‘this is what we’re going to do about pollution,’ and it gets done,” said Karl Mundorff of Bio-Reaction Industries. This is an aspect of China's structure that makes it a good business partner, according to Mundorff. He even went so far as to say he would rather work in China than India, because India is a democracy and thus decisions are made much more slowly.

China has made goals for pollution reduction, and that's an opportunity that Oregon businesses can seize right now.

export countries
export industries
From Marian Hammond's presentation: Oregon's top export partners and export industries.

“The Chinese government has made certain goals for pollution and climate change. And there is not enough time for China to indigenously innovate and create the technologies to meet these goals. Oregon businesses can identify those needs and move in,” said Marian Hammond of the State of Oregon business development department.

Mundoff’s Bio-Reaction industries has done just that. The company uses microbes to digest pollutants that would otherwise be burned. Burning the compounds uses natural gas and creates even more pollution, said Mundoff, while his technology disposes of it in a greener way.

Bio-Reaction industries started doing business in China in 2006. The Oregon company found a Chinese license partner to work through in creating the infrastructure for plants using their technology. It has gone well for them, but there are always concerns. The most recurrent concern in Thursday night’s discussion was Intellectual Property.

“Intellectual property is something you need to think about before you get to the other country,” said Akana Ma of Portland law firm Ater Wynne. “There are administrative and legislative frameworks for setting up intellectual property precautions. They are time-consuming, but worth it.”

However, even appropriate precautions taken do not mean your IP will be safe. Ma told of lawsuits by Starbucks and other large companies that, even when they won, only rewarded them a fraction of their legal fees.

“IP is something we are concerned about, Everywhere we turned when we were starting to do business in China there was another horror story about intellectual property, people seeing their technology come back to the states through another company...” said Mundoff.

Bio-Reaction Industries have not yet had problems with their Chinese license partner, but Mundoff says that he’s still “scared.”

“We wrote in our agreement that if it ever comes to legal proceedings, we will go to Singapore, to eliminate the home-turf situation."

China is moving away from being the “world’s manufacturing plant,” a title it got from its traditionally low-cost labor. The country wants to start embracing its own indigenous innovation, said Ma. And when Chinese companies create green technology of their own, Oregon is set to benefit from that as well.

“Oregon is known internationally as a market for green technology,” said Hammond. Nissan and Mitsubishi have both selected Oregon as a location for their green vehicles’ initial US launch.

As a location for business and a partner in investment, China provides a unique opportunity for Oregon businesses. With appropriate precautions, the potential benefits are immense.


Angela Webber is the online editor for Oregon Business.


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