(November 05, 2004) Atlanta Business Chronicle – Mary Jane Credeur
November 5, 2004 – The second-most powerful man in China’s ruling political party is bringing a delegation of Chinese leaders to Atlanta on Nov. 10 to meet with companies like United Parcel Service Inc. and GE Energy to encourage stronger business ties and investment.
Li Junru, the vice president of China’s Communist Party, plans to meet with several business and political leaders — including former President Jimmy Carter and representatives of Mayor Shirley Franklin — to get a better feel for the goods and services the Southeast has to offer.
The visit is being arranged by the Georgia-China Alliance, a grassroots business development organization headed by state Sen. Sam Zamarripa, and Guy Budinscak, managing partner at Deloitte & Touche LLP’s Atlanta office. After the visit to Atlanta, Junru’s delegation is headed to Santiago, Chile, for similar meetings.
“The Chinese government, with all of its reforms, is sending its leaders all over the world to look at the politics, business opportunities, economic situation and logistics of all these other regions,” Zamarripa said. “We want to make sure that Georgia is at the top of their minds for any decisions they make.”
China is already Georgia’s fifth-largest trading partner, with nearly $650 million in goods exported there annually, according to the Georgia Department of Economic Development. That figure may surpass the $790 million mark in 2004, state projections show.
The ties between Georgia and China go even deeper.
Roughly two-thirds of all inbound containers at the Port of Savannah are from China, and Atlanta-based Delta Air Lines Inc. is seeking regulatory approval to operate a daily nonstop flight from Atlanta to Beijing (which could carry a $400 million economic impact on the Southeast).
Several Fortune 500 companies based here do significant business in China, including The Coca-Cola Co., UPS, General Electric’s large GE Energy division and Scientific-Atlanta Inc., to name a few.
The Home Depot imports about 10 percent of its goods from overseas, and China is one of its larger sources, the company has disclosed. Home Depot recently opened two “sourcing” offices in the Chinese cities of Shanghai and Shenzhen, which manufacture flooring, lighting, fans and other consumer goods for the retail giant.
“There is tremendous economic power emerging in China right now, and the country is ripe with opportunity for trade and business expansion and foreign investment,” said Budinscak, Georgia-China Alliance co-chair. The parent company of Deloitte & Touche, called Deloitte Touche Tohmatsu, has been expanding aggressively throughout China in recent years.
China’s economy is one of the hottest and fastest-growing in the world right now, with a gross domestic product (GDP) increase of 9.3 percent in 2003 and another 8 percent GDP increase expected in 2004.
China does $192 billion in annual trade with the United States, triple the amount of trade the countries did in the mid-1990s, according to the U.S. International Trade Commission.
Beijing will host the 2008 Olympic Games, which are expected to create several hundred million dollars in infrastructural improvements and new facility construction.
Georgia Tech economist John Garver said China’s recent emergence as a global economic engine is tied to policy decisions from the 1970s and 1980s under the late Deng Xiaoping to attract foreign investment and make China a country easy to do business with.
“There were all these special economic sites created and incentives like low wages that made China a very attractive place,” said Garver, who is a professor at the Sam Nunn School of International Affairs at Georgia Tech. “China has always had tremendous resources and good labor, but no capital. And now this ancient commercial civilization is getting the world’s attention by welcoming foreign business with open arms.”
The emergence of China’s middle class has created a boom for clothing, consumer products and real estate, Garver noted, which is also attractive to foreign businesses.
Another thing driving foreign investment in China is the development of a genuine private sector with little or no government control, he said. Minsheng Bank, China’s very first completely privately owned bank, was founded in 1996, and it is now aggressively courting foreign investors and customers.
China’s leaders realize that they have to deal with capitalist countries and that they can benefit from it, so they are being very proactive in meeting with other nationals and keeping good relations,” Garver said.
Atlanta officials hope to reciprocate that goodwill when Junru’s group is here.
Mayor Franklin’s director of external affairs and international relations, Claire McLeveighn, is planning a visit to China with Sister Cities International to explore the possibility of establishing a formal sister city relationship with one of the Chinese state capitals.
tlanta also has been lobbying to get a Chinese consulate here (the nearest one is in Houston).
“We believe there is a real window of opportunity here, and at the end of the day it’s this person-to-person diplomacy that helps facilitate business relationships,” McLeveighn said.