Why a Minnesota Mission to China?
In the Global Marketplace, China is a Rising Economic Superpower
China's economic growth is a double-edged sword for
Minnesota companies. On one hand it presents tremendous opportunities.
On the other hand, it poses tremendous challenges. Governor Tim Pawlenty
and others are traveling to China to learn about both.
As China's economy develops, people will have more money to
spend on things they want and need. Minnesota companies focus on China
as a market because we want them to buy those things from us.
A Chicken-and-Egg Illustration
To understand the powerful opportunities that China's
1.3 billion consumers present for Minnesota companies, all you
need is an egg. Take one out of the fridge and hold it in your
hand. Doesn't seem like much, does it?
But if China doubled its yearly egg consumption from 100 eggs
per person to 200 eggs, it would take more grain than some countries
raise in a year just to feed the hens needed to lay the extra
eggs. Suddenly, there's a tremendous opportunity for Minnesota
farmers to sell feed grain to China.
Or, if Chinese consumers ate just one more chicken per year
(a modest increase, since right now they eat only six), the increased
consumption would be equal to one-sixth of all the chicken raised
in the United States. Imagine the huge new market Minnesota poultry
raisers would have for chicken and turkey. And since it takes
two  pounds of feed to raise a pound of poultry, Minnesota farmers
who raise feed grain and oilseeds would also benefit from poultry
exports to China, because demand for their products would rise.
Food, clothes, electronics, manufactured goods, no matter the
product or service, even a small increase in demand from a country
with a population the size of China translates into big business
opportunities for companies prepared to do business there.
And we know demand for almost everything will continue to rise
in China. The country's economic growth spurt has only
just begun, and already consumers are earning and spending more.
Average incomes in China quadrupled from 1978 to 2000. Chinese
spending on entertainment, leisure, and education has risen significantly.
People have more money to spend and more free time to spend it.
Hundreds of Minnesota companies already do business in China,
earning strong profits and preserving manufacturing jobs at home
in the process. Take a look:
- China is now the state’s fourth largest export market.
- Minnesota manufacturers exported $672 million to China
last year – an increase of 100 percent since 1997.
- U.S. agricultural producers export $6 billion to China – an
increase of 227 percent since 2000.
Competition: The Race is On
Naturally, Minnesota companies aren’t the only ones that
want to satisfy China’s growing appetite for goods and services. Companies
from all over the world see the same potential for profit that
we do. That means  competition
for Chinese customers is fierce. And that’s what makes this Minnesota Mission
to China so important. Governor Pawlenty and his delegation
will use the mission to asses the competition and open doors
for Minnesota companies.
People tend to do business with companies they know and trust. That’s especially true in China, where they prefer to be friends before they are business partners. Fortunately, Minnesota has spent many years carefully building its friendship with China.
When the current mission concludes, four Minnesota governors will have led trade missions to China, each of which was historic in its own right.
- Governor Tim Pawlenty will have brought the largest trade delegation on record from any state to cultivate business dealings in Beijing, Shanghai and Hong Kong and promote the Minnesota-China Partnership.
- Before leading his trade mission in 2002, Governor Jesse
Ventura was the only U.S. governor to testify before Congress on behalf of
permanent normalized trade relations and in support of China’s accession to the World Trade Organization.
 In 1998, Governor Arne Carlson became only the second U.S. governor to be received by Chinese President Jiang Zemin, a gesture widely interpreted as a show of respect for the carefully cultivated relationship between China and Minnesota.
- In 1983, Governor Rudy Perpich brought the first official Minnesota delegation to China, recognizing the nation’s importance and paving the way for many of the trade, business, and cultural relationships that exist today.
But the state’s relationship with China extends well beyond trade and includes cooperative partnerships in education, government, cultural and humanitarian works.
Minnesota’s commitment to China reached new heights in this year with the Minnesota-China
Partnership, an unprecedented statewide initiative to help the people of Minnesota and China continue to build our friendship.
 The partnership brings together public and private organizations throughout the state to promote all facets of Minnesota’s many relationships with China, including trade, science, academia, arts, culture, friendship and humanitarian endeavors.
The uniqueness and sincerity of the statewide initiative prompted Zhou Wenzhong, China’s newly appointed ambassador to the United States, to pay a special visit to Minnesota in the spring of 2005, his first official visit to any state since his appointment.
“This partnership is quite remarkable,” said Ambassador Zhou, noting that the initiative will further enhance Minnesota’s already favorable reputation. “Minnesota is a very familiar name in China.”
Governor Pawlenty and 200-member delegation traveling with him will be building on that reputation in many ways that will benefit both Minnesota and China in the future.
Factoids:
China is the world’s seventh largest economy, valued at $1.4 trillion.
China has slightly more than 20 percent of the world’s population.
China is the world’s fastest-growing major economy, with an annual growth of about 9 percent in 2004 and 8 percent so far in 2005.
Still Curious?
The World Trade Organization
The WTO develops ground-rules for international commerce.
www.wto.org/
International Trade Administration
International Trade Administration is the first stop for information about all U.S. government export assistance
www.ita.doc.gov/
Minnesota Trade Office
The state’s official export promotion office
www.exportminnesota.com
Office of the United States Trade Representative
Official web site of America's chief trade negotiator and principal adviser to the president.
www.ustr.gov
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