An Amway Corp direct-selling office in Changzhou, Jiangsu province. [Zhen Huai/China Daily]

Amway chair sees markets opening up

The chairman of the US Chamber of Commerce is optimistic about the direction of the Chinese economy and encouraging companies, regardless of their size, to explore two-way trade.

Steve Van Andel, chairman of Amway Corp and of the US Chamber of Commerce since June 2013, said that what he has learned from a recent trip to China is that the country is increasingly becoming a market economy, that more opening up is being seen and that the process will continue.

He also said that it's the responsibility of companies expanding globally to make sure they fully understand their target markets and that it's important for companies to maintain the same standards wherever they operate.

He added that he expects trade between the two countries to become stronger.

Steve Van Andel, chairman of Amway Corp and of the US Chamber of Commerce

After his visit to Beijing, he said he particularly encourages small and medium-sized companies, which so far have not been actively involved in global trade, to go abroad.

He recalled that 12 years ago, in a previous term as the chamber's chairman, he led a delegation from a small-business organization to China. Most of the businessmen had never done any business outside the US.

As a result of the trip, a number of businesses established contacts with Chinese companies, and a new generation of businesses started expanding to other parts of Asia.

The growth of the Chinese economy has created more competition, resulting in better quality, pricing and choices, he said, calling for more opening up of service industries.

While discussing rising production costs in China, Van Andel said that it's natural that China, which was the world's main low-cost manufacturer decades ago, has gone through such changes.

"There's no doubt that costs have gone up," he said, adding that China is going through changes in terms of technology and productivity upgrades that will help it to better compete globally.

He added that he also welcomes investment from Chinese companies in the US.

"US consumers are a great market, and it's a great place to be," he said.

However, Chinese companies have to fully understand the market and how business works there, he added.

His advice to Chinese investors competing globally is to concentrate on understanding who they are, what they can do well and in which areas they can compete.

He said that Amway has done very well over the past 17 years in the country, in addition to its other markets around the world.

"Our top 10 markets are growing," said Van Andel. "We continue to be optimistic for Amway's businesses and the direct selling business in China."

He said that one of Amway's advantages is the close relationship between salespeople and customers.

"You're going to buy products that you've never used before," said Van Andel. "You want to use what your friends used and recommended."

He added that the way the company operates, through networks such as friends and relatives, fits very well with Chinese culture.

Amway started its direct selling business in China when there was no legislation in that field, he said.

The government is now monitoring the sector and has developed legislation. Laws to regulate the direct selling industry help consumers to differentiate ethical products from non-ethical items, he added.