Take Patriot Scientific (San Diego), a company that licenses semiconductor intellectual property (IP) to chip designers. Patriot is as attracted to the Chinese market as anyone, because it looks like an enormous opportunity, according to Jim Turley, an independent analyst based in Pacific Grove, Calif., and a director of the board of Patriot. But as with a lot of companies, there are cultural, economic and relationship issues that Patriot Scientific's staff may not have any real experience dealing with.

Thus, Patriot is approaching the market by reaching out to Chinese trading companies, engineering companies or developers--people on the ground who already know the economy, the culture and the business climate.

"Trying to license IP to design houses in China, and doing that through existing Chinese entities, is probably a smarter way to do it than to hire an American and put him on an airplane and say go sell stuff in China," Turley said. "You get the benefit of local talent and local culture, plus now you've got a foot in the door of the market as well."

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