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 user 2006-11-28 at 11:18:00 am Views: 37
  • #17195

    China buys ‘Made in Midwest’
    Midwest benefits from China trade

    Hogs, floor tiles and ink cartridges among products flowing to fast-rising partner
    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 in 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 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 supplies ceramic
    tiles for the floors of KFC restaurants popping up in China at a rate
    of 400 stores a year.”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,” company President Dave Johnson said.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.
    — 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-based company that makes
    equipment to test 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.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 and 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.Some U.S.
    businesses got their start in China by making contacts through agents
    the companies hired to find export opportunities or by selling to the
    Chinese government or universities and expanding to the private
    sector.U.S. companies acknowledge that a political shift could make
    China more closed to their products. Democrats, who won control of
    Congress in recent elections, tend to be aggressive critics of Chinese
    trade policies.”In the long run, I believe market demands — and these
    are huge — will outstrip political issues,” MTS CEO Chip Emery said.