Why Is China-US Business Matching So Difficult?

Author: ZeMing M. Gao 高泽明, Business Architect, U.S. IP Attorney; Expert in "Company-as-a-Product" (CaaP), Intellectual Property, Blockchain, Tokenization, and Smart Contracts (Build/Strategy/Economics); SEC/FINRA Private Securities Registered Representative; Principal Consultant at Caapable, advising multiple companies; gao@caapable.com

Chinese companies and individuals face enormous challenges in bridging with the United States. Due to a lack of investigative capability, dialogue capability, regulatory capability, and engagement capability, China–U.S. bridging not only frequently ends in failure and frustration, but far more commonly remains mired for extended periods in a state of "inaction born of uncertainty"—forfeiting business opportunities and life opportunities alike.

"The greatest loss is the business that should have happened but never did"—this observation applies perfectly to China–U.S. bridging.

One defining characteristic of American society is its high degree of specialization, and paired with this specialization is the expectation that clients themselves possess the capacity to engage with professional institutions and personnel. For example, when interfacing with a law firm, a typical American company has its own professional in-house legal team. Even when it does not rely on internal attorneys, it will have individuals and teams who are intimately familiar with their own business, know precisely what they need, and can hold substantive conversations with external professional institutions.

Most Chinese companies and individuals do not possess this kind of bridging capability. And this deficiency cannot be remedied merely through translation and conventional intermediary services.

The Misconception

When Chinese companies and entrepreneurs come to the United States, the approach they are accustomed to is: find a translator—usually a friend or acquaintance—and then, through a friend's introduction, engage a law firm or accounting firm and begin operations.

While the services of translators, accounting firms, and law firms are necessary, this approach tends to operate in a low-capacity state, remaining at the surface, unable to go deep, unable to break through, and unable to build genuine relationships of professional trust.

It is well known that in both the United States and China, the professional norms and business models of law firms, accounting firms, and management consulting companies are not partnership models but rather independent third-party service models. The content of these professional services is itself indispensable, but their form as standalone entities is ill-suited to the establishment of new businesses—especially ill-suited to the operations that Chinese companies and entrepreneurs are developing in the United States. These services cannot endow a new enterprise with the intrinsic vitality and agency that are compatible with the American social and business environment, and yet these are precisely what Chinese companies and entrepreneurs need most in the United States. An entrepreneur and team that can think independently, plan strategically, and operate fluidly within China simply do not possess that same capacity in the United States—and that capacity is not something traditional third-party professional services can fully provide. The distinction is like the difference between a crutch and one's own leg.

What Is Actually Needed?

What is needed is not finding a friend or acquaintance, not a referrer, not a Chinese-speaking attorney or accountant. What Chinese companies and individuals need is something akin to an "in-house team member" of the kind that American domestic companies possess—someone who understands their business and needs deeply, who stands completely on the side of the Chinese enterprise coming to America as a partner would, and who views and grasps the entire bridging process from the perspective and depth of an insider.

In other words, what is needed is a genuine American local partner. When third-party services are required, this partner can identify the most suitable service providers in the United States without being constrained by language. There are very few Chinese-speaking attorneys and accountants in the United States, which means the pool of choices is extremely narrow.

This partner professional team member needs to function like a designer and foreman—fully conversant with the entire picture, capable of providing the most appropriate design for the work at hand, able to independently complete the most critical tasks, and capable of selecting the most suitable third-party service providers to handle other specific work when needed, with the ability to oversee the entire process. In other words, this partner should not merely be an intermediary, but a self-contained service model possessing the combined functions of attorney, accountant, and consultant, while also knowing when and what kind of third-party professional services to engage.

To achieve all of this, the partner team must have a solid American professional background, with dialogue and engagement capabilities that are at least on par with—and ideally superior to—the other American professional institutions and individuals with whom business relationships will develop (such as clients, partners, law firms, and government agencies), and with the authority to exercise meaningful oversight.

Yet the vast majority of Chinese companies or individuals are not in a position to retain such an ideal "in-house team" overseas on a long-term basis; at the same time, because this kind of need often fluctuates considerably, it is also difficult to calibrate the size of a retained team.

Solving this problem requires an innovative and distinctive service model to provide a flexible, dynamic "virtual in-house professional team." Starting from developing a comprehensive set of practical methods and systems for solving real problems for Chinese companies and individuals, a unique service model accumulates over time, leveraging self-learning effects to improve service quality and increase the effectiveness of collaboration.

This is an outcome that traditional law firms, accounting firms, and conventional management consulting companies cannot achieve.

The Various Forms of China–U.S. Bridging

"Bridging" is an ordinary word whose literal meaning does not exceed the knowledge of a high school graduate. But achieving deep bridging between two countries, two economies, and two cultures is an extraordinarily difficult undertaking. We will not discuss bridging at the level of nations as a whole, nor at the level of national policy, nor at the level of popular culture—only, in the narrowest sense, commercial bridging at the level of companies and individuals.

For the sake of conceptual clarity, it may be useful to introduce some definitions representing several important categories of commercial bridging:

1. Physical Goods Bridging: The buying and selling of tangible physical goods, manifested in import and export trade.

1. One-Way Service Bridging: Purchasing professional services in the United States (a cash-for-service, one-directional bridging).

1. Two-Way Service Bridging: Service collaboration among industry-related links (a service-for-service, bidirectional bridging).

1. Financial Investment Bridging: Investing in the United States through financial channels. This is one type of investment.

1. Intangible Asset Bridging: Purchasing intangible assets in the United States, especially intellectual property (patents, trademarks, technology, know-how). This is also a type of investment.

1. Innovation Asset Bridging: Creating proprietary intangible assets in the United States. This encompasses investment but goes beyond simple investment.

1. Tangible Industry Bridging: Establishing independent business entities in the United States. This encompasses investment but represents the highest level of commercial creation.

Among the categories above, Physical Goods Bridging specifically involves bringing tangible physical goods from one place to another and completing a transaction. For this type of bridging, provided there is an effective import-export policy and management system and a transportation system, participants need only possess sufficient business instinct and sensitivity to supply, demand, and pricing. While both parties need some language communication ability, there is no particularly high demand for depth of communication. Starting in the 1980s, many Chinese speakers—though speaking awkward "broken English"—were nonetheless able to become successful businesspeople, achieving remarkable results in China–U.S. trade.

Beyond traditional cross-border trade, commercial activities such as purchasing real estate in the United States are also essentially Physical Goods Bridging in substance.

But commercial bridging does not remain at the level of physical goods. What follows—bridging methods 2 through 7 as listed above—are all non-physical commercial bridging.

Non-physical commercial bridging, such as service bridging, financial securities bridging, and intangible asset bridging, differs greatly from physical goods bridging. The subject matter of physical goods bridging is tangible and concrete; as long as one can grasp market trends, no deep communication is required. Non-physical commercial bridging, however, involves intangible subjects of exchange—services, financial products, and intangible assets—whose modes of existence, creation, transaction, and execution all require genuine professional capability to navigate.

In other words, in physical goods transactions, the quality and value of the goods being traded bear no direct relationship to the knowledge and skills of those participating in the transaction. The participants may influence how smoothly the transaction proceeds and what costs are incurred, but as long as the transaction occurs, its value is independent. A house's value, for example, is determined entirely by the house itself and has nothing to do with the agent you hire. The intermediary can influence the transaction process but cannot affect the substance of the object being transacted.

By contrast, in non-physical commercial transactions, the quality and value of what is being transacted bears a direct relationship to the knowledge and skills of the parties involved.

And innovation bridging is the highest form of bridging. Creating proprietary intangible assets overseas, for example, involves professional capabilities across multiple dimensions and cannot be accomplished by money and business acumen alone. The quality of the intangible assets produced through innovation bridging is directly related to the knowledge, skills, and innovative capacity of those involved.

And bridging at the level of tangible industry is especially true of this, because establishing independent business entities in the United States is inherently a creative process—the value of the ultimate "product" (Company-as-a-Product – CaaP) is determined to a great extent by the creator's knowledge, skills, and creative capacity.

The Difficulties of Bridging

Among all the categories of bridging discussed above, the core difficulty lies in the fact that Chinese companies and individuals in the United States lack investigative capability, dialogue capability, regulatory capability, and engagement capability.

Some specific manifestations:

• Chinese enterprises' understanding of overseas environments remains at the level of a "visit abroad" mentality and stage, making genuine, mature, full-spectrum peer dialogue impossible—let alone the kind of leadership that commands genuine conviction from others.

• A lack of deep domain knowledge and judgment leads to extreme blindness in bridging activities (investment, mergers and acquisitions, factory establishment, etc.).

• A lack of real engagement capability means that after investment, mergers and acquisitions, or factory establishment, the bridging ultimately still fails.

• A lack of platform-based accumulated "self-learning" effects means that the same categories of mistakes are made repeatedly—"paying tuition fees often, advancing slowly."

• A lack of long-range, systematic planning and implementation means that when it comes to importing overseas technology, enterprises only know how to "go up the mountain to collect ginseng" rather than "cultivate and farm it."

None of this is merely a language problem. Even with the best translators hired, the vast majority of the difficulties remain exactly as they were.

Dialogue capability is not simply eloquence, but deep knowledge and insight combined with powerful expression, communication, and execution.

Case Studies

Example 1: A team representing Chinese investors came to the United States in search of investment opportunities and, through referrals, visited an incubation platform known for its distinctive business model. After multiple visits, the Chinese team still had not grasped even the substance of what the platform was. More dangerously, they believed they had understood it—they were, in classic terms, in a state of "unknown unknowns." This state of unknowing only became apparent later, when a genuine expert in the American startup field appeared in the discussions on behalf of the Chinese side: once the expert arrived, what had been an awkward and superficial conversation was suddenly elevated to an entirely new level of depth, sophistication, and fluency. Even the others present—who may still not have fully understood—suddenly realized that what they thought they had understood they in fact had not, having been elevated from "unknown unknowns" to "known unknowns." This is the necessary precondition for the next step of arriving at "known knowns."

Example 2: At an IIUSA summit, top experts in American investment immigration gathered from government agencies (USCIS, DOJ, SEC) and every relevant sector of private business. The panel discussions demonstrated admirably professional dialogue capability. The panel also included intermediary representatives from China. But the contrast was striking. The Chinese intermediary representatives were essentially incapable of forming a genuine dialogue; the only thing they could do was to awkwardly announce a few questions prepared in advance. While at first glance it might appear to be a language problem (since the intermediary representatives spoke English with a heavily Chinese accent, intonation, and manner—"broken English")—the problem was in fact far deeper than a language issue. It was a comprehensive dialogue capability problem, a professional competency problem. If one cannot even form a professional dialogue, cannot carry a conversation forward, and can only linger awkwardly at the surface of an uncomfortable clash—how can successful bridging be achieved? And this was at one of the most authoritative summits in the field, where intermediaries would certainly have sent their most capable personnel with the best English. One can only imagine what actual on-the-ground bridging looks like.

The above examples concern only the level of service bridging. When it comes to intangible asset bridging, innovation bridging, or tangible industry bridging, the problems become far more severe.

Example 3: On a cross-border industrial products e-commerce platform in the United States, nearly 1,000 Chinese manufacturers once participated on the platform. The platform's core design purpose was not merely to enable Chinese manufacturers to send their products to the United States for sale, but more importantly to help them gradually learn to build independent operating capabilities in the United States—developing intellectual property including trademarks, establishing local marketing foundations and