Buffalo, New York April 5, 2000 - Accessing a diverse network of local contacts and having a clear understanding of regional logistics issues are among the keys to tapping the unlimited potential of the Chinese market. That's according to participants in a first-of-its-kind private trade mission to China, led and organized by PBB Global Logistics.

More than 20 businesses from across the continent participated in PBB Global Logistics' China: Trade Mission 2000, which took place March 9-25, 2000. Delegates visited key city centres, including Hong Kong, Jiangmen, Nanning, Xiamen, Tongxiang, Shanghai, Nanjing and Beijing. Mission participants, representing a cross-section of North American industry, met with potential business partners, government officials, governors and mayors at each stop.

PBB is uniquely qualified to lead the mission because of its integrated Logistics, International Trade and Travel expertise. Mission delegates also benefit from PBB's many years of experience doing business in China, and its first-hand knowledge and wide network of contacts in the country.

"While meeting with senior officials, the importance of established partnerships and a key contact network in each Chinese province was very clear," says Mike Scott, executive vice president, PBB Global Logistics.

"We found acquiring modern logistics technology is the top priority for industry in China and the government is looking for ways to make this possible. We also found a burgeoning demand for Western goods and services everywhere the mission travelled," says Mr. Scott.

China's anticipated accession to the World Trade Organization has opened many doors for North American businesses, but has also created new challenges - such as overcoming the underdeveloped infrastructure and dealing with predominantly state-controlled logistics resources.

Presently, the development of third party logistics, most specifically warehousing, distribution and inventory management systems, is much slower in China than in developed economies. The abundant supply of cost-effective labor and lack of sophisticated logistics technology has resulted in a diminished demand for third party outsourcing. However, with WTO status, the logistics industry will undergo significant changes. "Chinese customs brokers and forwarders are concerned about highly competitive foreign companies coming in under WTO and accessing the Chinese market. There is a great deal of interest in joint ventures with Chinese logistics companies seeking partnerships with the West," says Mr. Scott.

China's traditional business practices have long been self-contained. With WTO status, they'll be competing on the world market, against highly developed, technologically-driven companies. Access to new technologies and equipment is crucial. "Joint-ventures are certain. To stay afloat in the world market, Chinese businesses require North American technology - in return we gain access to their markets," says Mr. Scott. He adds when doing business with the Chinese, an ability to access and understand local logistics conditions and infrastructure is vital for both importers and exporters.

There is also significant cultural and social change to consider. Smaller cities are under rapid construction, as the country embraces modern philosophies and practices, but many vestiges of the old system remain. "The quality of modes of transport remain inconsistent from province to province. Maintaining dependable shipping and delivery timelines is also an ongoing concern. There are also warehousing and distribution challenges and issues regarding final payment - providing opportunities for joint ventures in a number of areas."

"We saw first hand the trade challenges that can arise under the current system. A recent deal to acquire machinery from a western merchant fell threw because the Chinese buyer did not have an import license. Customs re-valued the goods at five times their original cost, and when taxes were added - it was impossible to make the sale," says Scott.

As alliances are created with Western businesses, business practices and trading standards will be enhanced, and there will also be an emphasis on reducing smuggling, grey channel import and bureaucratism. Right now customs issues are paramount, taxation and restrictions hinder the trade industry - the accession to the WTO should reduce these barriers and ease future partnerships.

In addition to meeting high-level government officials, mission participants had occasion to meet with many local companies doing business in similar industries, having been carefully matched with a pool of potential customers, suppliers and other business partners. PBB's logistics experts were also on hand to assist in the deliberations, providing immediate answers to key trade and transportation issues.

"The overriding message from this trip is that there is ample opportunity for the West to do business in China. However, it is crucial that Western businesses team with an experienced Global Logistics provider who has knowledge and networks within China," Mr. Scott says. "However there is a distinct window of opportunity. The time to act is now. There are powerful competitive advantages to securing market position as the country enters the WTO and as the central government continues to encourage Western investment."

PBB Global Logistics employs more than 1,000 people in 70 locations throughout North America. It offers fully integrated global logistics services including: International Freight Forwarding, Customs Brokerage, Warehousing and Distribution, North American Shipping, e-globallogistics.com^TM, Trade and Regulatory Services, Corporate Audit, International Mail Order Systems and Corporate Travel through a world-wide network of automated facilities. It is one of Canada's "50 Best Managed Private Companies".