Trade Mission to China was an Eye-Opening Experience

For the last month, in nearly every conversation with CenterState CEO members and community partners, I have been asked about CenterState CEO’s recent trade mission to China. Quite honestly, it’s been difficult to distill such a powerful, provocative, and perspective-changing experience into just a few short paragraphs. 

As someone who has been fortunate enough to have traveled to more than 30 countries on three continents — and as a professional involved in economic development, seeing urban renaissances in our Central New York communities and experiencing the stark challenges of encouraging private investment in areas buffeted by decades of economic and demographic decline — I have developed a vision of what I expect success and prosperity to look like.

That made it all the more startling to realize how totally unprepared I was for what I saw in China. Here was a country whose GDP in 1970 was equivalent to 91 billion U.S. dollars, nearly 12 times smaller than that of the United States at the time. Moreover, it boasted a per-capita income of a mere $121 U.S. per citizen, ranking it 161st in the world — so far down the list that it didn’t bear mentioning as even a burgeoning market for U.S. goods and services.

Fast forward to today, when China’s GDP now totals more than $8.3 trillion, second only to the United States — a staggering rate of growth unsurpassed by any other country over the last 45 years. More importantly, per-capita incomes in China have risen dramatically to more than $8,000 a year. While this is a far cry from our income levels here in the U.S., the Chinese development curve represents a fivefold increase in per-capita income since 2000. That rate of growth is almost unimaginable — it took seeing and experiencing it for myself in order for it to really sink in.

At every stop of our trip — from Xi’an to Beijing and Wuxi to Shanghai — we saw development at a pace and scale that was at times both terrifying and thrilling. But make no mistake; it matters to every one of us. 

Ever since we began our focus on exporting, I have heard from dozens of members who applaud the effort but who wonder what, in practical terms, an export strategy means to their business. That was part of the reason for inviting CenterState CEO member David Katleski, owner of Empire Brewing Company, to join us for this trade mission — to help us understand if we were on the right track. While in China, David was able to see firsthand how his small, locally owned business could benefit from exporting and increased connectivity to the global economy. 

The simple fact is that China’s remarkable growth has given birth to a growing middle class that now totals more than 400 million people — an increasingly vibrant consumer class that is now larger than our entire U.S. population. And in that consumer class lies a remarkable set of opportunities for American business, large and small, including so many of you in our very own region:

Tourism 
In all, 1.47 million people from China visited the U.S. in 2012, spending $8.8 billion. And, visitation to New York City is growing by 20 percent, annually, with more and more of those visitors showing interest in visiting upstate amenities such as the brand name outlets at Destiny USA, touring university campuses, and taking educational tours of farms, orchards, and vineyards. There is also potential to attract medical tourism, including distinct opportunities for Chinese business executives to receive clinical services in Syracuse and Central New York.

Education 
One-third of the foreign college students in the U.S. are from China, and recent research from the Brookings Institution shows that there are more than 2,000 Chinese students enrolled in schools in the Syracuse metro area alone. These students are critical contributors to more than $240 million in foreign-student spending at our retail outlets, restaurants, and service providers.

Agriculture
Food, and in particular food safety, was front and center in many of our discussions with partners in China. Dairy is one of China’s fastest growing imports, rising 30 percent in 2013 to $5.2 billion. Food products, particularly fruit, usually command a premium if they are considered safe and from the U.S. There is also strong Chinese interest in investing in food processing, which could present opportunities for our region in the apple, dairy, hops, and wine industries (with the export of our wine-production knowledge), among others.

Energy efficiency and pollution control
There has been a real price for China’s rapid and extensive growth and that’s pollution — air, water, and soil. This is yet another opportunity for us to apply our technologies and regional expertise in these fields to provide solutions in China. 

FDI
There is opportunity for foreign direct investment (FDI), particularly in public infrastructure through the EB-5 economic-development program. Last year, 6,895 Chinese nationals participated in the program, outpacing all other nationalities. Since 1990, the program has raised $8.6 billion and created at least 57,300 jobs. 

After this trip, I am more convinced than ever of the importance of that global perspective to our success here in CenterState New York. CenterState CEO has a critical responsibility to be a conduit to the global economy for each and every one of our members, large and small, irrespective of industry, to fully capitalize upon this tremendous opportunity and rapidly growing market.

We believe our region can and must be an active and relevant player, and our goal is to bring distinct and strategic elements of that global market right back here to our region, and to all of you. I encourage you to connect with us and learn more about China, our global strategy, or how we can help connect you to these opportunities. 

Robert M. Simpson is the president and CEO of CenterState CEO, the primary economic-development organization for Central New York. This editorial is drawn and edited from the CEO Focus email newsletter the organization sent out on Sept. 4.