Foreign investment and San Diego companies: 3 things you need to know

In September 2021, World Trade Center San Diego (WTCSD) hosted its quarterly Global Competitiveness Council (GCC) meeting in collaboration with the San Diego Cyber Center of Excellence (CCOE) and the Committee on Foreign Investment in the United States (CFIUS). We were joined by David Rader, Deputy Director in the Office of Foreign Investment Review at the Department of Defense, who presented on the national security implications of foreign investment in the United States.

Here are three things we learned from the session about foreign investment into San Diego:

1. FDI is a positive for the United States, but requires caution

Foreign direct investment (FDI) provides American companies with valuable capital to grow and prosper. However, it is critical to exercise caution and conduct  proper due diligence when considering investment from foreign countries. There is always a chance rogue actors could undermine American companies like yours by way of theft of intellectual property.

2. U.S. companies are losing out on American-made innovative technologies to adversaries 

Foreign countries are increasingly leveraging FDI as a means to gain access to new technologies via control of intellectual property. One way adversaries do this: By raising venture capital and early stage funds to target innovation hubs like San Diego.

Unsurprisingly, the United States and its partners comprise the vast majority of innovation hubs around the world, making them and their homegrown innovation companies high-value targets. The majority of threats have been toward companies in the emerging technology space, including 5G, artificial intelligence, semiconductors, and unmanned systems. But recently, improved due diligence and private capital has allowed CFIUS and its partner organizations to minimize these threats toward American companies and technologies.

3. It pays to proactively reach out to CFIUS 

CFIUS is an interagency committee authorized to review certain transactions involving foreign investment in the United States and certain real estate transactions by foreign persons, in order to determine the effect of such transactions on the national security of the United States. Companies that are considering leveraging foreign investment are encouraged to reach out to the team at CFIUS for no-charge advising to ensure your intellectual property will remain safe. CFIUS will need your company name, technology, and foreign investor information to determine if the transaction necessitates review through its due diligence process.

To get started with no-cost advising from the CFIUS staff, please reach out to David Rader, Deputy Director, Office of Foreign Investment Review at Department of Defense – david.m.rader.civ@mail.mil

Interested in growing your business internationally?

World Trade Center San Diego operates as an affiliate of the San Diego Regional Economic Development Corporation. WTC San Diego works to further San Diego’s global competitiveness by building an export pipeline, attracting and retaining foreign investment, and increasing San Diego’s global profile abroad.

Do you want to know more about the work of World Trade Center San Diego? Click here to receive our monthly Global Brief Newsletter, delivered straight to your inbox.

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Looking to export to China? Here’s what you need to know

World Trade Center San Diego (WTCSD) partnered with the American Chamber of Commerce (AmCham) in Shanghai and San Diego Sport Innovators (SDSI) to host a business roundtable centered on the opportunities and challenges of exporting to China. Whether a small to mid-sized San Diego business or a more experienced San Diego corporation, all businesses can leverage the opportunity to export to a growing Chinese market, even amid COVID-19 challenges.

Here’s what you need to know.

1. You’ll need to locally register your business

Local officials in China have enormous say in terms of registration, policies, and enforcement. Be proactive in reaching out to the local U.S Commercial Service and AmCham teams—these experts support businesses like yours every day and can help keep you from running in circles.

2. Find the right international partner to minimize challenges and delays

It’s crucial for your business to identify suitable business partners in China or in the international space to help you understand and overcome non-tariff barriers. COVID-19 restrictions have made this process extremely difficult and global partners anticipate that pandemic-related delays and challenges will persist for the next 12-24 months. Especially now, companies should make sure to seek out and lean on local partners to increase your chance of successfully breaking into the Chinese market.

3. Leverage target demographics and Gen Z trends

China’s Gen Z are increasingly driving social trends…and consumer purchases, thanks to their disposable income. While much of their focus remains on domestic Chinese brands, their digital savvy opens up opportunities for your company to get in front of a growing market that isn’t necessarily loyal to the brands of their parents’ time. SDSI also notes that Gen Z has driven particular interest in premium consumer goods, with a focus on action sports like skating following the 2020 Olympics.

Strategizing opportunities to promote your brand to the right audience on popular digital platforms like WeChat or leveraging the right polarizing figures can help drive your successful marketing.

4. Do the work to understand consumers and cultural differences

Understanding consumer demand at the tactical level (on the ground) is critical to your company’s success. To be seen as an attractive option for your customer base, keep in mind cultural and social norms outside the U.S. For example: Understanding and leveraging Chinese holidays and special events can mean success for your company, with the opportunity for high interest and ability to reach a large demographic…if you do your research.

With some preparation, San Diego companies can succeed in the current business climate.

Businesses that have had success in exporting to China tend to do the following five things:

  • Determine whether your company is ready to export.
  • Work with local, in-country partners that can help your company navigate COVID-19 and understand local restrictions.
  • Leverage local networks to provide guidance on legal issues, and introductions to vetted service providers.
  • Identify and connect companies with distributors and industry consortiums.
  • Obtain market intelligence that helps gain perspective on overall market climate for example, understanding China’s digital landscape.

Interested in growing your business internationally?

WTCSD is now accepting applications for its flagship export assistance program, MetroConnect. 15 companies will be selected to receive a $5,000 export grant, 7 curated export workshops, access to mentors, complimentary translation software, international flight discounts, PR and marketing support from WTCSD staff, and the chance to win a $25,000 grand prize. For questions, please reach out to Lucas Coleman (lc@sandiegobusiness.org). Apply by November 15

About:

WTCSD
Founded in 1994 by the City of San Diego, Port of San Diego, and San Diego International Airport, World Trade Center San Diego (WTCSD) operates as an affiliate of San Diego Regional EDC. WTCSD works to further San Diego’s global competitiveness by building an export pipeline, attracting and retaining foreign investment and increasing San Diego’s global profile abroad. sandiegobusiness.org/wtcsd

AmCham Shanghai
The American Chamber of Commerce in Shanghai, known as the “Voice of American Business” in China, was founded in 1915. AmCham Shanghai was the third American Chamber established outside the United States, and now has 3,000 members from 1,300+ companies. As a non-profit, non-partisan business organization, AmCham Shanghai is committed to the principles of free trade, open markets, private enterprise and the unrestricted flow of information.

SDSI
SDSI is a nonprofit focused on the Sport and Active Lifestyle industries. Working with Executive Chairman and NBA great Bill Walton, its 100 company membership represents the “Southern California Lifestyle” and includes leading sports and technology brands, Nutrition and Yoga, Surf, Skate, Cycling, Golf and Retail, as well as some of San Diego’s best Service Companies. It focuses on relevant and actionable C-level content that benefits its member companies. SDSI’s award winning Accelerator program features a 20 week Mentoring curriculum whose graduates have raised $86 Million and have a 82% success record. For more info go to SDsportinnovators.org

 

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GROW YOUR COMPANY IN SAN DIEGO ↓

World Trade Center San Diego works directly with companies—free of charge—to help them expand internationally and grow in San Diego.

  • Export Specialty Center: For small companies interested in learning about exporting and international growth.
  • MetroConnect: For small and medium sized companies ready to export and grow internationally.

Plus: Get WTCSD’s Global Brief, monthly global news and updates delivered straight to your inbox.


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For COVID-19 recovery resources and information: Visit this page, or see how we can help your company free of charge.

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san diego news

Events

GROW YOUR COMPANY IN SAN DIEGO ↓

World Trade Center San Diego works directly with companies—free of charge—to help them expand internationally and grow in San Diego.

  • Export Specialty Center: For small companies interested in learning about exporting and international growth.
  • MetroConnect: For small and medium sized companies ready to export and grow internationally.

Plus: Get WTCSD’s Global Brief, monthly global news and updates delivered straight to your inbox.


You might also like:

For COVID-19 recovery resources and information: Visit this page, or see how we can help your company free of charge.