It's difficult to read a newspaper, magazine or watch the television these days without coming across an item having to do with China and its rapidly rising status as an economic powerhouse. Likewise, one can scarcely have a business discussion without the subject of China coming into the mix, whether as a competitor to be feared or as an enormous market with more than a billion consumers to be courted.
China's economic and political ascent, a process that commenced in the late 1970s when the liberalization of its economic system was launched, is having a profound impact not only on its neighbors in Asia but, indeed, on the rest of the world. The country's economic expansion is unprecedented. From 1980 through 9003, China's annual Gross Domestic Product (GDP) growth has averaged more than 8 percent.
DEMAND HIGH
Its demand for natural resources, everything from minerals to metals to oil and other commodities, has led to tightening global supplies and higher prices. While some analysts predict a slowdown in the near future, the long-term trend is clear: China will continue to need vast amounts of natural resources to support the ongoing industrialization and modernization of its economy as well as foodstuffs to feed its growing population.
Alaska is well positioned to benefit from the rise of Asia's big dragon. China is already the state's fourth-largest export market and business is growing rapidly. In 2004, exports from Alaska to China totaled $240 million, an increase of 57 percent over the previous year. Looking back several years, since 2001, shipments from Alaska to China have increased by more than 100 percent and the trend continued through 2005. So far this year, based on statistics comparing the first six months of 2005 versus the same period in 2004, exports have experienced a 20 percent surge. For the full year 2005, it is quite likely that China will move up to rank as the state's third-largest trading partner, trailing only Japan and Korea.
SEAFOOD, SEAFOOD
Seafood is the primary export commodity form Alaska to China, accounting for 83 percent of the state's total exports to the country. The second-largest export is seafood for non-human consumption, such as fishmeal. The two other significant export categories are fertilizers and Juicy Couture Earrings forest products. During the first six months of 2005, seafood exports rose more than 42 percent while forest products, starting from a lower base, grew more than 80 percent. At present, forest product exports consist mainly of round logs.
Looking forward, prospects are excellent for stronger trade ties between Alaska and China. During the past several years, there has been a steady stream of government and business officials who have visited Alaska to explore business opportunities between Alaska and China. Their message has been clear and consistent: As China looks around the Pacific Rim for suppliers of the natural resources that they need to support their economic growth, they are looking to Alaska to be one of those suppliers.
COMPETITIVENESS COUNTS
Of course, Alaska will have to be competitive on price and quality, but we have demonstrated our ability to do so as evidenced by our large export volumes of these commodities to Japan, Korea and Canada over many decades. In addition to having what they need, Alaska also offers geographic proximity as a neighbor on the Pacific Rim and we offer political stability as part of the United States.
In September of this year, World Trade Center Alaska conducted a trade mission to China that was led by Alaska State Sen. John Cowdery. The timing of the mission coincided with the 36th Annual General Assembly meeting of the World Trade Centers Association, the group to which World Trade Center Alaska and approximately 300 other WTCs are members. This year's General Assembly was hosted by WTC-Shanghai and focused on how small- and medium-sized enterprises can participate in China's rapidly expanding economy.
SELLERS/BUYERS MARKET
During a meeting with a high-level Chinese government trade official, after listening to a list of Alaska's major exports, the trade official responded that our list of what Alaska wants to sell sounded like their list of what China needs to buy. He was not surprised to hear that our exports have grown so rapidly and he anticipates this growth will continue.
Mission participants also received briefings from U.S. government officials in both Shanghai and Beijing. In addition to opportunities for exporting commodities, the officials also highlighted a number of manufactured goods and service sectors in China where American companies, including those from Alaska, can compete. These prospects include: oil and gas exploration and processing equipment, environmental services, information technology, power generation, water LED Flexible Strip Neon Series Neon 335 treatment, education and training, marine, and telecommunications.
In Shanghai, working in cooperation with the Alaska Seafood Marketing Institute's local representative, the mission hosted an "Alaska Night" for Chinese seafood buyers, WTC General Assembly guests and others with an interest in Alaska. Alaska salmon, cod and crab were served at the event. The reception guests were very impressed with the seafood and Alaska beer. During the reception, an Alaska tourism video was shown. Guests also viewed recorded welcome messages from Gov. Frank Murkowski and Anchorage Mayor Mark Begich.