PR Resource – Muarateweh.net

In China’s booming economy, wealthier citizens are trading in bicycles for cars.

More cars mean more highways.

And more highways mean more business for MeadWestvaco, a company based in Richmond, that sells a key chemical used to make asphalt.

China represents the fastest growing export market for MeadWestvaco’s specialty-chemicals division, which is based in Charleston, S.C. Its chemical sales to China grew by a third last year, and the company expects sales to double by 2010.

“China is very committed to upgrading their road (network), so we see the road-construction industry growing tremendously over the next decade,” said the president of the chemicals division, Robert Beckler.

Every day, thousands of Chinese products – from toys at Wal-Mart to toothpaste for prisons – pour into this country.

This flood of low-priced goods over the past five to 10 years is partly to blame for the decline of the Southern furniture, apparel and textile industries. It has also created an ever-widening trade gap between the United States and China.

In 2006, the United States spent $232 billion more on Chinese goods than China spent here. The gap has almost doubled since 2003, prompting renewed calls in Congress last month for trade penalties on China.

Americans see China primarily as the source of low-priced goods. But as the trade gap has grown, so too has the number of Southern companies such as MeadWestvaco that have found China a profitable export market.

Since 2003, U.S. exports to China have doubled to $55 billion, and the growth has been strong in the South.

Most Southern states have recently opened or expanded trade offices in China, and are making more trips to spur trade.

North Carolina businesses ship everything from computer equipment to machinery and chemicals to China. Over the past six years, the state’s total worldwide exports grew 18 percent, and exports to China expanded by nearly 300 percent to $1.34 billion.

“What did Rudyard Kipling say, ‘East is East and West is West, and never the twain shall meet’? Well, he was wrong. In North Carolina, we’ve met, and we’re doing business,” said Tony Copeland, the assistant secretary for international trade for the N.C. Department of Commerce.

Although Canada, Mexico and Japan are still larger markets for North Carolina businesses, “China has the largest potential right now,” Copeland said.

South Carolina businesses ship everything from railway equipment to chemicals to scrap materials. Over the past six years, the state’s total worldwide exports grew 60 percent, and exports to China grew 450 percent to $703 million.

Much of what the state ships are the raw materials that China uses to create consumer products, said Clarke Thompson, the director of export development for the South Carolina commerce department.

“They’ve overtaken their domestic supply, so they need to import,” he said.

Gregory Guest, the Asia-Pacific trade manager for the state commerce department, works with South Carolina businesses to establish ties with China.

Some small-business executives ask, “‘Why would they buy anything from us? They export everything.’ But they’re buying a lot, too, and some people have a hard time believing it,” he said.

Helping to drive growth, Guest said, are low shipping costs. So many more products come into the United States from China than go out that there’s an excess supply of shipping containers for the return. That keeps prices low.

“I guess if we start shipping more, the advantage will go away,” he said.

Virginia businesses sell everything from Appalachian hardwood for furniture production to the material used in highlighter tips to metal. Over the past six years, the state’s total worldwide exports grew 21 percent, and exports to China grew by nearly 400 percent to $950 million.

“There’s been a great awakening in the developed world that there are opportunities to sell to China, not just buy from them,” said Paul Grossman, the director of international trade for the Virginia Economic Development Partnership.

He said that the state had virtually no export relationship with China 10 years ago.

He’s unsure if the high rate of growth can continue. “There’s a lot of speculation that after the 2008 Olympics (in Beijing), construction will slow down, and so will the (Chinese) economy,” he said.

As China’s construction and export-driven growth continues, workhorse cranes that move steel at mills and shipping containers on and off cargo ships are operating overtime.

That presented an opportunity for EC&M, a company in St. Matthews, S.C., that makes controls and brakes for the big cranes. It recently sold five brakes and other equipment to a port company in China. Each brake sells for about $20,000.

Keith Hudgins, the company’s managing partner, said that the sale was essentially a one-shot deal, though he worked with South Carolina’s commerce department to find other customers in China.

EC&M exports about 15 percent of its products. Mexico and South America present bigger opportunities for the company’s growth than China, he said.

Many in the U.S. furniture industry cite low-cost Chinese imports for some of the domestic industry’s woes.

Now, Chinese manufacturers are stepping up imports of key furniture components from U.S. manufacturers, said Charlie Greene, the chairman of the N.C. Furniture Export Council and the president of an upholstery company in High Point.

“They’re building something and have difficulty figuring out how we did it. So they come here to find the piece they need and put it in their product, instead of just copying it,” Greene said.

n Sean Mussenden is a national correspondent in Media General News Service’s Washington bureau. He can be reached at smussenden@mediageneral.com or 202-662-7668.