Vancouver-based Ritchie Bros. held its first
industrial equipment auction in Beijing this
past April after a decade of working with the
Chinese government to develop industrial
auction laws.
ever performed at an equipment auction.
More than 1,000 people came to the
Beijing auction site. Many people in China
are unfamiliar with auctions or they
associate them only with the sale of fine
art and wine.
Ritchie Bros. was founded in 1958 and
now conducts hundreds of unreserved
public equipment auctions around the
world each year. In 2012, the company
held auctions in 13 countries. Just like any
of their other auctions, the Beijing site
featured hydraulic excavators, wheel
loaders, compactors, cranes, and more.
Along with brands like Caterpillar,
Komatsu, and John Deere, they also sold
equipment made by XCMG, SEM,
Jaingong, and others.
"You have to be a certain size in order to
be able to do that type of thing," says
McCarthys' Lee. "If you move down one or
two tiers what we see most would be technology and biotech companies — they
won't be able to go to China by themselves.
If they go to China, they have to find a
reliable partner who won't cheat them."
Partnering is key
Lee says if smaller companies try to start
their own business in China it will be expensive and challenging from a bureaucracy perspective. "Our advice to local
Canadian companies is unless you're
Bombardier, who has been there for many
years, you have to be at least $1 billion in
turnover otherwise to go it alone into
China is going to be costly and difficult,"
says Lee.
Gowlings' Lefebvre advises companies
to do the research to understand the
various levels of government in China
and get to know key partners that can
help facilitiate business.
Biotech and telco companies are also
eyeing China with the hopes there could
be greenfield business opportunities in
the large developing urban areas, says
Your lawyer. Your law firm. Your business advisor.
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