Coping mechanisms

IT Outsourcing: Neusoft
For China’s IT services leader Neusoft, rough times mean good business. Firms looking to cut staff frequently consider outsourcing IT their services. With around a third of its business coming from foreign outsourcing, and the other two-thirds from domestic contracts, Neusoft is doing relatively well.

According to Walter Fang, president of Neusoft America, the stimulus has already had a positive effect on his business. "Even with the first installments of the stimulus, many of which are infrastructure packages, there is a spin-off," he said. "As a result, many IT services are needed."

Optics: Sunny Optical Technology Group
Export-heavy Sunny Optical Technology sells mid-quality lenses to manufacturers of camera phones, digital cameras, microscopes and security cameras. Exports make up half of its revenues.

The company responded to the downturn in foreign demand by laying off several hundred employees, as well as cutting fat from delivery, inventory and production. Ida Hu, director of investor relations, credits this proactive cost cutting with helping the firm outperform competitors.

Although Sunny Optical recorded a profit of US$11.72 million last year, Hu believes business risks still loom large because the firm’s products are seen as discretionary purchases. "We can’t see the bottom of the economy in 2009, so if things don’t get better, we worry that will affect the demand for the cameras or handsets," she said.

Hu hopes that the recently rolled-out third generation mobile phone technology will stimulate demand for new phones, and by extension her company’s lenses.

Financial services: CCG Investor Relations
CCG Investor Relations helps companies in China and the US to improve visibility and appeal to investors all over the world. While CCG has been aggressively pushing efficiency in the US, Crocker Coulson, the company’s president, said cost cutting has not been as much of an issue in China. In fact, CCG recently doubled its marketing budget, which includes plans to host a large showcase of its Chinese clients in New York later on this year.

"Among the companies we interact with in China, the businesses are doing just fine. Most of them met or exceeded their fourth quarter projections, so we’re encouraging those companies to remain visible because they have a stronger story to tell than US [firms]," Coulson said.

Coulson sees his business as occupying a prime position in the market due to cash accrued during its growth period that is now available for investment. "Now is the time to spend on marketing because everyone else is cutting. The relative visibility you get is much greater. So far it seems to be paying off," he said.

Plastics: Vautell
Vautell makes plastic fittings, most notably for Boeing airplanes, outsourcing some work to a joint venture in China. Prompted by the decline in export demand, the firm has also been trying to expand its share of the China market. Spencer Tribwell, business and program manager of Vautell China, said that China is a critical part of its business for several reasons.

"In particular, we’re interested in the development of the Chinese airline industry, and we intend to be there when new models need plastic fittings," said Tribwell. However, Tribwell acknowledges that business has been better. "As far as making new investments, we aren’t looking to spend too much money. But we see things on a case-by-case basis."