Midwestern states cash in on Chinese boom
the associated press
By James Hannah
Tucson, Arizona | Published: http://www.azstarnet.com/allheadlines/156370
GREENVILLE, Ohio — Eight years ago, China was just another foreign country
on the map to farmer Bill Funderburg. Now, the Chinese buy nearly half of
the 3,000 breeding hogs he raises each year on his western Ohio farm.
"They're our No. 1 customer," he said. "Lately, it's been very, very good."
The Chinese boom is translating into jobs at Rust Belt communities that have
taken their economic lumps, even as critics point to a trade gap with China
that is projected to grow 12 percent to $228 billion this year. China also
has the second largest holdings of Treasury securities among foreigners who
have 45 percent of $1.96 trillion total that is publicly traded.
Companies say the payoff for the jet engines, books and ink cartridges being
sold to China outweighs the difficulties of doing business in the country,
including cultural barriers, tariffs and limited distribution systems.
Peoria, Ill.-based Caterpillar Inc. has increased its exports by 40 percent
in the past few years. A $58 million contract to supply China with
generators that capture methane gas from coal mines and convert it into
electricity means more jobs at Caterpillar's plants in Lafayette, Ind., and
Griffin, Ga.
Summitville Tiles Inc. in eastern Ohio is supplying ceramic tiles for the
floors of KFC restaurants that are popping up in China at a
400-stores-a-year clip.
"Any time that you are shipping millions of square feet of product, it is
significant and it has helped keep workers in my factory working," said
company President Dave Johnson.
China's economy is sizzling as it continues to move toward a market-based
system, permitting small-scale enterprise and fostering foreign investment.
U.S. companies exported $41.8 billion in goods to China in 2005, up from
$16.3 billion in 2000. The 157 percent growth far outstripped the 21 percent
jump in U.S. exports to the Netherlands — the second largest increase — and
catapulted China up to the fourth largest U.S. export market, behind Canada,
Mexico and Japan.
"The Chinese market is growing so rapidly that everybody's trying to get a
piece of it," said Beno Chan, a Fairfield, Conn.-based businessman who has
helped U.S. companies get into the Chinese market.
The boom has been especially sweet to Midwestern states.
Ohio — which has lost about 167,000 jobs in the past six years — had $934
million in exports to China in 2005, a 220 percent increase from 2000.
Illinois, which lagged behind the rest of the country in income and
employment growth following the 2001 recession, has seen its exports jump to
$1.2 billion, more than twice the $533 million in 2000.
MTS Systems Corp., an Eden Prairie, Minn.-based company that makes equipment
that tests the performance and durability of everything from planes to
orthopedic joints, expects to as much as triple its 25-person work force in
China because sales there have picked up.
In September, Acura TL luxury cars made at Honda Motor Co.'s plant in
Marysville, Ohio, went on sale in China for the first time. The country now
accounts for 10 percent of the sales for Vernay Laboratories, a Yellow
Springs, Ohio-based company that sells China auto fuel-pump valves and ink
cartridges for desktop printers.
The market began to open to U.S. exports in 2001 after the Chinese joined
the World Trade Organization to help generate their own economic growth.
Before that, U.S. companies faced high import tariffs, quotas, were required
to get import licenses and were forced to use Chinese companies to service
their products.
Today, tariffs have decreased, import licenses and quotas have all but
disappeared, and U.S. companies often don't have to use Chinese companies
for service.
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