Business in Vancouver's “How I Did It” feature asks business and community leaders to explain in their own words how they achieved a business goal in the face of significant entrepreneurial challenges. In this week's issue, Jonathan Wilkinson, the new CEO of BioteQ Environmental Technologies Inc., talks about the challenges Canadian companies face when doing business in China. BioteQ recently signed an agreement to build a fourth mineral recovery and water treatment plant at a copper mine in Dexing under a joint venture agreement with Jiangxi Copper Company.
“One of the big issues is local market knowledge. The whole legal and financial structure of the systems in China is very challenging for companies that haven't done business there. You can get yourself into a lot of trouble if you don't know how you go about managing those issues. One of the key things for companies that are thinking about entering China is they've got to get good legal and financial advisers in China.
“We had to figure out where we thought our technology fit. We narrowed that down to the Jiangxi province, and we targeted the largest mining organization there to develop relationships with. The executives here spent a lot of time in China building relationships that resulted in the partnership with Jiangxi. It's important to spend time there and put some feet on the ground and have some presence.
“We hired somebody who is Chinese and moved [to Canada] some time ago. He was, and continues to be, critical to our efforts in China. He is here but he spends probably two weeks a month in China. We have somebody on the ground there as well, and we have another person here who is Chinese and has spent time there.
“Typically in these joint ventures you have to get the consent of the joint-venture partner to remove money. It's just the way the legal structure of the joint venture works in China.
“You either go back every time you want to remove money, and you have to get consent or you have to put in some kind of agreement that says you're able to remove your share of the money when you want to. It's not something you would think about in Canada, but it's different in China. We've now got an agreement with Jiangxi in terms of how we get money out of the joint venture and how it gets transferred back.
“Intellectual property is an issue for sure. A lot of tech companies have bad stories to tell about how they built one [plant] and a hundred more get built, but they get built by somebody else.
“There are only a few ways to protect yourself from IP issues in China. Our strategy has been two-fold. The first is to find the right partner, and if you find a partner that's big enough and committed enough from a relationship perspective, they will help you protect that intellectual property within China.
“The best strategy for protecting intellectual property in China is continuing to advance your technology in Canada – investing in research and development so your next generation is better than your previous generation so that people will always do business with you because what they're going to be buying is better than what they could copy.” •