In every International Transaction, there is typically some level of FDI (Foreign Direct Investment). To this end, you are to develop a plan to establish a FDI in China. Your sector will be Automotive, and you are to develop a comprehensive plan to establish the following:

Assumptions:

• Establish FDI in China, Assume investment will be from $1.0-$5.0M USD
• Your product is Electrical Motors
• Assume 10,000 Annual Production in China
• 50% will stay in China and sold to Tesla
• 50% will be shipped to USA Long Beach, CA to be sold to General Motors.
• Assume you will initially create a WOFE (Wholly owned Foreign Enterprise in China) which will take approximately 3 months to secure. After proving yourself, you will be able to become a fully China Domestic Company.
• As explained, your operation will produce electrical motors for the growing automotive segment. 50% of your production will be aimed at China domestic market and the other 50% will be aimed at export market to USA.
• Your unit sale price is: $200 USD, Unit cost is $100 Ex-works China
• Container is 20', with cost of $4200 paid to Freight Broker
• Assume 1,000 units / container
• You will try to determine your potential US Harmony Code and applicable Duty

Your paper will consist of the following:

Your Table of Contents should contain at minimum the following.

• Executive Overview
• Company Profile: You will name your company and discuss why you are establishing the operation. This will be a Greenfield Operation.
• Market Overview: You will discuss opportunity in China (fact they are also going green/ need you), and master plan that you will export 5K units annual to USA (1K /Each Shipment).
• Your expected steps to accomplish such a transaction
• Assume it is a great opportunity, and will you easily penetrate both USA and China 10% annual market without any difficulty. Be sure to state fact that you right sizing investments so you can serve both markets.
• Who will be involved
  • US Government - Commerce Dept.
  • China Government - Commerce Dept.
  • US/China Attorney- You will need to hire both
  • Your management will include Ex-pat's from USA
  • You will also hire seasoned experts in "Electrical Motor Mfg".
• Pricing and Financial Forecast (You will provide your first year forecast-plan/ USA and China)
• Logistics Planning
  • Detail your assumed costs per /shipment to USA.
    • Ex-works price
    • Transportation costs
    • Duty Costs
    • Final Costs in USA
• Risk Analysis: You will develop list of threats that you are aware of and need to overcome.
• How are you going to ship (Logistic Planning)
  • Identify your key documents that will go with every shipment. State the purpose of each document.
• References: APA Format