Many of America's Fortune 500 companies have found doing business in the emerging markets of the Asia-Pacific a challenge. Hawai'i businesses share those challenges.

Those include foreign markets being distant with legal and regulatory regimes that lack transparency. Reliability of contracts and protection of intellectual property is questionable. Commercial culture and customs are bewildering. Periodic shifting of political winds, whether domestic or international, creates uncertainty. Add to this currency risk, payment risk, collection risk, and the list could go on.

However, according to leading international analysts, the advent of new communications technologies has brought 1.5 billion new consumers into the global marketplace who are increasingly savvy, capable of reaching across vast distances to satisfy their demand for high-quality products.

Studies by the Brookings Institute, Federal Reserve Bank and others show that communities that trade — that sell more to the global marketplace — have higher standards of living than those communities that sell less. With recent rapid globalization expected to accelerate, no doubt those who seek new markets and consumers will gain even more value.

Can Hawai'i afford to be left behind?

For Hawai'i businesses, foreign market challenges may be even more daunting. With few exceptions, ours are small- to-medium-size businesses. Our financial resources necessarily limit our tolerance for risk. Time and resources to spend on foreign markets are assets in limited quantity for Hawai'i companies.

Hawai'i has a long history of trading. Early Polynesian voyagers were global explorers and traders. The 1800s saw sandalwood traders and whaling ships active here. Hawai'i's tourism is a commodity sold to distant consumers. Given our status as the most geographically isolated land mass in the world, we are dependent on flows of goods, people and capital to and from offshore markets.

The dynamics of globalization create an opportunity for Hawai'i businesses to capitalize on new foreign markets. To do so, we need to manage our challenges and leverage our competitive advantages. The state's recent trade missions sought to do both. The results were promising, as businesses that participated report additional revenues of over $100 million expected over the next several years.

Today, Chinese Vice Premier Wu Yi, dubbed by Forbes as the second most powerful woman in the world, leads a 160-person delegation of senior government officials and business executives to visit Hawai'i. During this delegation's visit, the Department of Business, Economic Development and Tourism will host a trade and investment symposium and sign a memorandum of understanding with the China National Tourism Administration, China's tourism ministry.

Emerging markets are fraught with risks — legal, cross-cultural and political. In this context, personal relationships matter in Asia — as they do here in Hawai'i's Asia-Pacific-based culture. Relationships often are the most effective guide around unknown risks or the best solution to an unanticipated risk.

Within this often complicated web of relationships, the ones with governments are possibly the most important. Governments matter in Asia — a lot. Governments in Asia can help facilitate business and they can help resolve business disputes —or they can stand in the way. Our trade missions have recognized that these government relationships are valuable assets for all Hawai'i businesses and, if properly deployed, can help our businesses manage the risks of foreign markets.

The state's trade missions included venues for all Hawai'i participants to meet and develop relationships with local and national government officials. These took place at seminars, workshops, luncheons, receptions, music concerts, trade shows, site visits and one-on-one business and government matchmaking meetings — open to all from Hawai'i. The result is added assurance and potential assistance to Hawai'i's businesses seeking to do business in new markets with new partners.

Hawai'i cannot afford to be left behind. Whether driven by intense global competition or the goal of diversifying our economy or the desire for a higher standard of living, Hawai'i has no choice but to engage foreign markets.

Governments can play a role facilitating foreign market entry. For Hawai'i and Hawai'i's businesses, our state's relationships with foreign governments are an asset.

Theodore L. Liu is the Director of the Department of Business, Economic Development and Tourism. He wrote this commentary for The Advertiser.