Georgia Bets on Trade with China

BEIJING — If Georgia officials get their way, local executives will soon be able to obtain Chinese visas in Atlanta, fly from Hartsfield-Jackson International Airport directly to several Chinese cities and pitch business ideas to a new trade development office in Beijing.

The three goals are central to an effort by Georgia and Atlanta to bolster growing trade ties with the world's fastest growing large economy — an endeavor that began paying dividends recently when the U.S. Department of Transportation awarded Delta a coveted flight between Atlanta and Shanghai.

As China's economy has grown, Chinese companies have also begun investing in Georgia, with three Chinese firms announcing during the past 16 months that they would build factories in the state.

"China is very important to us and we see growing trade opportunities," said Heidi Green, the deputy commissioner for global commerce at Georgia's Department of Economic Development. "We're about growing investment and jobs in Georgia."

Exports to China from Georgia have nearly tripled over the past five years to more than $1 billion, making it the state's third largest export destination behind Canada and Mexico. Imports from China through Savannah topped $10.3 billion last year, up 25 percent from 2005.

To build on that growth – and overcome what some experts see as past missteps – the state's Department of Economic Development will open an office in Beijing "soon," Green said, adding that the department has hired a director and is waiting for final Chinese government paperwork.

"We have tried to be very deliberate in our process of opening, not just for today but for years to come," she said.

Atlanta and Georgia are also confident China will locate a planned new consulate in Atlanta.

Chinese officials have expressed interest in building a new consulate in the United States but have not said where or when construction will begin. It's something they would need to decide with Washington's approval.

But state officials and business leaders have lobbied in the nation's capital and are confident Beijing will choose Atlanta, said Jorge Fernandez, the vice president of global commerce at the Atlanta Chamber of Commerce.

"We are optimistic it will happen and we are very optimistic that when it happens it will be Atlanta," he said.

Georgia's third strategy to build trade ties with China is to win more direct flights between China and Atlanta. So far, government lobbying efforts on behalf of Delta have been "more innovative and certainly larger" than past efforts for routes to other countries, said Fernandez, who worked as a Delta executive before joining the Atlanta Chamber of Commerce last year.

Under an aviation agreement signed by Beijing and the U.S. Department of Transportation in 2004, weekly flights between the two countries will increase to 249 by 2010.

Delta's new daily flights from Atlanta to Shanghai, China's most important business hub, will begin next March and the carrier will apply for routes to Beijing and other Chinese cities in coming years, said Burt Pinoli, Delta's general manager for China, Korea and Southeast Asia.

If the three plans are realized, Georgia could reap an economic bonanza.

A study commissioned by Delta found that the new Shanghai route will bring $400 million of economic benefit to the southeastern United States annually and other new routes to China could bring similar gains, Fernandez said.

The consulate and Beijing office would spur trade growth, further driving a recent jump in Chinese demand for resources and products from Georgia. Exports of woodpulp – Georgia's top export product to China – rose 13 percent to $158 million last year while exports of meat and copper each more than doubled.

As China's middle class expands, demand is also rising for American made and American branded consumer products.

Atlanta-based Home Depot opened its first 12 stores in China in August and executives expect to grow the business.

"This is the beginning of an economy that's going to become strong," Annette Verschuren, Home Depot's president for Asia and Canada, said at the opening in Beijing. "It's going to be slow ... but we see big opportunity here."

At the same time, Chinese companies are looking at Georgia as a manufacturing base.

Sany Heavy Industry Co., a Chinese producer of construction equipment, announced plans last month to build a factory in Peachtree City, Ga., creating 200 jobs.

The news followed a May announcement that Chinese electrical equipment maker General Protecht Group will build a plant in Barnesville, some 50 miles south of Atlanta. Chinese condiment-maker Lehui Enterprises has begun construction in nearby Newnan and plans to open a factory next year.

Lehui, which in the United States uses the brand name Kingwasong, chose to build in Georgia because of the state's convenient air and sea links with China and relatively cheap land and labor, said Lai Yunlai, the company's president.

State officials also wooed Lai: "The most touching thing was that government officials stayed with us until 9 p.m. on Valentine's Day during a negotiation," he said.

State officials are planning to spend more quality time with China's leaders.

Gov. Sonny Perdue will make his first trip to China to open the trade office in Beijing and state officials will man a booth at China's largest travel industry exhibition next month to promote Georgia destinations.

"China has an enormous population and a lot of them want to travel outside the country, so there's a huge tourism market for Georgia," said Kevin Langston, the state's assistant commissioner for tourism.

The number of passengers traveling on international flights from China has grown at more than 15 percent annually since 2002, according to Chinese airline industry analysts.

But to be successful in the long term, experts say Georgia needs to remain committed to China.

Georgia opened a trade office in Shanghai in 1996 but closed it in 2002, a move that probably damaged the state's reputation, said James Zimmerman, chairman of the Beijing office of the American Chamber of Commerce.

"There has to be a commitment long term because it takes time to build political capital," he said.

"If they come here again and then pull out, it's going to send the wrong message."

The Department of Economic Development's Green said Georgia is planning to stay the course in China.

"My feeling is that there's a lot of commitment to this," she said.