April 2, 2012
This next week, I will lead an Arkansas trade delegation to China. During my five years as Governor, I have been reluctant to travel far from our State, and have let others take the lead on several international missions presented to me. China, however, is such an important partner for American trade that I decided I should be there in person.
In 2010, our state’s exports to China brought in $335 million, ranking China third among destinations for Arkansas goods. The country’s buying power in Arkansas is a recent phenomenon. Ten years ago, only $20 million in Arkansas exports went to China. We’ve made a concerted effort to bolster trade with this growing economic power. In 2008, the Arkansas Economic Development Commission opened a China Office.
Part of the reason we’ve seen expansion in Arkansas exports to China is the growth of wages for Chinese workers. People there now have a greater ability to purchase foreign goods, increasing demand for Chinese companies to import goods from Arkansas and elsewhere.
China’s rising wages may bode well for our other objective, attracting new investment in Arkansas. As labor costs rise in China, American labor becomes more competitive and attractive. While U.S. workers are still paid more than their Chinese counterparts, the U.S. workers are also more productive. Some companies are already shifting operations from China back to the states. In fact, some analysts predict that by 2015, between two-and-three million manufacturing jobs could move from China to the U.S. One thing we can be certain of is that China will continue to exert its influence in the global economy, and we must best position Arkansas to take advantage of this important market’s buying power.
In meetings with dignitaries and business leaders during our 2009 European trade mission, the positive power of face-to-face meetings became evident. These were essential to building relationships on direct communication and trust, with both sides gaining a full understanding of mutually beneficial opportunities. The result of those meetings was the decision of several European companies, including Nordex, Dassault Falcon, St. Jean and St. Gobain, to locate or expand operations in Arkansas. We hope for similar results from China.
As we’ve done before on international trade missions, we will highlight the benefits that businesses can expect from investing in and trading with Arkansas. Our State continues to be increasingly attractive to trading partners. We have proven resilient throughout the recession. Responsible budgeting has allowed us to cut taxes and simultaneously invest in Arkansas when many other states and nations were forced to do the opposite. Our education system has shown continued improvement, an important component for employers evaluating the quality of life a region offers. And, as more major international companies have come to Arkansas in recent years, it serves as an encouraging sign for other business executives. Arkansas is positioned well for business opportunities, and that’s the message we intend to convey to the Chinese during our business and cultural visits in the coming weeks.
Southern Governors’ Association (SGA), founded in 1934, is the oldest and historically the largest of the regional governors' associations. SGA uses the power of connection, collaboration and communications in a bipartisan manner to solve regional problems, improve quality of life and secure an economically vibrant and prosperous American South.