Arkansas exports to China up 700% in 2000-2009 period

Arkansas exports to the world’s fastest-growing economy have spiked more than 700% since China’s entry into the World Trade Organization. However, the global recession has substantially slowed business deal between the Natural State and the Chinese mainland.

On Monday, the U.S.-China Business Council released its analyses of American trade to China over the past decade. According to the report, Arkansas exports to China grew from only $20 million in 2000 to a peak of $321 million in 2008.

However, the flow of Arkansas goods to China fell 27% to $235 million between 2008-2009. Currently, China is Arkansas’ 4th-largest export market, behind Canada, Mexico and France.

Arkansas’ top exports to China in 2009 were chemicals, processed foods and crop production, which together totaled nearly $150 million. Computers, electronics and electrical equipment were next, bringing in sales of more than $36 million to businesses based or active in Arkansas.

The USCBC report comes on the heels of the Arkansas Economic Development Commission’s (AEDC) presentation in June to state legislators, who questioned efforts made by agency in foreign countries — particularly China and Japan.

AEDC Executive Director Maria Haley provided a legislative committee with a summary of the state’s efforts in the Far East. According to that report, AEDC has contracted with Beijing-based Yuan and Associates to promote Arkansas businesses to more than 400 Chinese companies as well as a number of senior level government officials.

"The state’s strategy for attracting a share of the 3% of investment from China to North America entails a ‘push-pull’ mechanism," Haley’s report said. "The China Office will ‘push’ Chinese investors to Arkansas through a series of branding programs in cooperation with Chinese government agencies, promotion organizations, and business community. At the same time, the AEDC will ‘pull’ Chinese investors through attractive incentives, flexible policies, and a customized business service model designed for Chinese investors.”

Similarly, Haley’s report and the USCBC study cite the effect of the current economic downturn on trade between Arkansas and China.

"Even with a global recession, American businesses and American workers continue to benefit from expanding opportunities to sell high-value manufactured goods to the China market, the world’s fastest growing economy," USCBC President John Frisbie said in a statement.

Frisbie also warned that as the economy rebounds, U.S. lawmakers should take a balanced approach to trade with China.

"We need to address many business concerns with China, including market access barriers, inadequate intellectual property rights protection, and fairer treatment for U.S. companies operating in China," the USCBC chief said. "But we need to address these concerns with specific solutions, not with sanctions that would disrupt the important commercial relationship."

The council’s report also provided estimated growth numbers from Arkansas’ four congressional districts over the past decade.

Arkansas-made goods sent to China from the 1st District have jumped more than 800% from a measly $7 million in 2000 to $64 million in 2009. Exports to China peaked in 2008 at $96 million, but have dropped significant during the recession.

In the 2nd District, exports to China have grown from $5 million in 2000 to $30 million in 2009. Second District exports peaked at $42 million in 2007.

Western and northwest Arkansas’ booming 3rd District has seen the most explosive growth in trade with China. Exports from the 3rd started at $9 million in 2000 and settled at $69 million in 2009. However, exports from Arkansas to mainland China hit $98 million in 2007 and $90 million in 2008.

The 4th District saw exports grow from $7 million in 2000 to $49 million in 2009. In 2008, exports to China from the 4th topped $68 million.

Overall, China remains the third-largest export for American-made products, behind U.S. neighbors Canada and Mexico. U.S. exports to China totaled $69.6 billion in 2009. That total rises to $90.7 billion when shipment of American products to Hong Kong are included.

The U.S.-China Business Council is a private, nonpartisan, nonprofit organization of roughly 220 American companies that do business with China.