Proposal to restrict AEDC efforts in China fails at budget hearing

A proposal to curtail Arkansas’ activity in recruiting business into and out of China did not find support from lawmakers at Thursday’s (April 9) Joint Budget Committee hearing.

Sen. Trent Garner, R-El Dorado, proposed eliminating contractual services by the state to fund “an office, liaison or representative for the Arkansas Economic Development Commission in China.” The proposal only received seven votes for passage, far short of a majority on the budget panel.

AEDC, the state agency that oversees state economic development efforts around the globe, wants to reduce its spending to $125,000 annually to work with U.S. and foreign representatives that help with Arkansas imports to China as well as recruiting Chinese businesses to operate in state. It has spent about $300,000 in the past for such efforts.

Walmart and China have a major presence in China, while Gov. Asa Hutchinson has been successful in recruiting several Chinese-based companies to locate manufacturing facilities in Arkansas. However, one of the biggest recruits, Sun Paper Co., recently withdrew its $1.5 billion paper mill project from Arkadelphia citing tariff issues and the COVID-19 pandemic.

In presenting his amendment to the AEDC budget, Garner was asked if Walmart or Tyson Foods had objected to it. He said he did not hear back from lobbyists for either company.

Garner voiced his concerns about COVID-19, which originated in the Wuhan province of China. He said the country lied last year about the outbreak and how devastating it had been. He also said it was time to send a message to China and bring more manufacturing of critical items back to the U.S.

“We can’t be held hostage by China,” Garner said. “I’m not anti-China as far as trade goes, but when it comes to critical infrastructure, we need to start sending a small but important message that things are changing.”

Arkansas Secretary of Commerce Mike Preston defended the state’s spending on Chinese import and export efforts.

“I know it’s sending a message to China, but it will hurt Arkansas more than it will hurt China,” he said.

Rep. Stephen Meeks, R-Greenbrier, asked Preston: “Will the Chinese Communists even notice we closed the office?”

“They would notice that we no longer have a presence there,” Preston said.

Several Republican legislators voiced concerns that closing the office would be “too big of a gamble” and “catastrophic” for the state’s agricultural industry, which recently has been presented with restored rice and soybean trading with China.

Editor’s note: KATV’s senior political reporter Marine Glisovic contributed to this report.