During my recent Los Angeles trip, I met with the person tasked with taking his company’s service business into China.  For about an hour we two talked of pretty much nothing but the difficulties he and his company would face.  Being the lawyer that I am, I am not sure I talked of anything other than problems and risks. Finally, the putative China head remarked, “I know, everybody is telling us we are crazy for even trying to do business in China.”  I replied, “Wait a second.  I never for a moment told you not to go into China. In fact, I am of the view that you have to go into China. Within about five years, businesses like yours will be making a fortune in China and if you don’t go now, you will have almost no chance of being one of them.”

I then told him of my disappointment with American wineries.  More than five years ago, at least a handful of good-sized wineries came to us with plans for going into China, but all of them backed out when they realized the money and time it would take for them to “make it there.”  China’s wine market is now dominated by French and Australian and Chinese wines and when it comes to everyday mainstream wines, U.S. wines are just not on the list. And because they were so late, I fear they never will be. At least two of the wineries who chose not to go into China have told me that they agree with this assessment.

Today I received the following email:

Dan,

I am a frequent reader and big fan of the China Law Blog. Back in the beginning of March, you posted a multi-part article titled “The End Of Cheap China, Part VI. Vietnam, Burma/Myanmar, Globalization, The Next Big Thing, And Falling Wages.” In this article you mentioned Myanmar and asked the readers what we thought of it as “the next big thing.”

I recently came across an article from the Economic Intelligence Unit called “Myanmar: White Elephant or the New Tiger Economy?” Although its an abbreviated version of the report (the full version requires a subscription), the article goes into adequate detail regarding Burma as a possibility for future investment. I attached the report to this email, so you could check it out.

To me, Burma seems like an intriguing possibility for future investment, but the government needs to undergo significant political reform in order for foreign companies to invest/relocate there.  With a large population, large quantities of untapped natural resources, and countless underdeveloped industries, Burma has much potential. We just have to wait and see how political and economic reforms play out. Also central to Burmese development is the reduction of military rule and the expansion of political opposition and ethnic minority rights.

What do you think?

I am of the strong view that the advantage goes to the first movers and we will in June be putting our money where our mouths are as both Steve and I head there on a fact-finding mission with a good friend/business consultant who is fluent in Burmese. We are going there on behalf of a non-American client, but we are not both getting paid to do so and we plan to stay much longer than necessary for just the one matter. While there, we plan to meet with and seek to establish relationships with pretty much each and every law firm in Rangoon with a semblance of an international practice and with various government officials regarding foreign (particularly American investment).  In other words, we plan on getting in on the ground floor of doing business in Myanmar/Burma so that when American companies decide economic and/or political reforms have sufficiently advanced for them to go there as well, we will be the American veterans in the field.  Are we putting tens of thousands of dollars (in billable time and expenses) at risk?  Yes, but we have no choice.  You either start doing business in Myanmar/Burma now or you may never get the chance.

What do you think?  And here’s another question for you. Why do American companies always seem to follow Korean and Japanese and French and German companies into places like Myanmar?  Politics? Conservative business culture? Short term profit mentality? Bigger market at home so less need to expand overseas?  You tell me.

UPDATE: Though I fear being burned at the stake, I cannot help but note that I wrote the above post on May 16 for publication at 3:00 am PST on May 17.  Only a few hours AFTER that, Secretary of State Hillary Clinton announced that the United States would be lifting its trade embargo against Myanmar and would be sending an ambassador there for the first time since 1990.  To quote Ms. Clinton, “Today we say to American business: Invest in Burma.”  This truly underscores the point of this post.  If you wait around for “perfection” in any particular country, you will probably fall behind your competitors who move in before that perfection is realized.

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Dan Harris

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

I am licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at my firm, I focus on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.