How about a positive story about California for a change?
Whatever California’s other problems – and they are myriad – the Golden State’s position as a critical player on the Pacific Rim
is assured. California, the largest exporting state
to Asia, is a linchpin of the vast trading area encompassed
by some 41 countries that touch the Pacific Ocean.
The International Monetary Fund says California has
the world’s seventh-largest economy, with a $1.5 trillion GDP, and that’s easy to believe. The state exports to 220 foreign countries, and imports from nearly as many,
and it’s international-linked trade accounts for about a fourth of the state’s economy, according to an analysis by the California
Chamber of Commerce.
In 2006, it’s exports to China alone totaled more than $10 billion, including nearly $4 billion in computers and electronic products alone.
But China is just fourth on California’s export ladder, behind
$13.9 billion to Japan, more than $14 billion to Canada and some $20 billion to Mexico, which purchases 15 percent of all California exports. California exports
about $7 billion worth of goods to South Korea. The imports
are huge, too—some $20 billion worth from Canada alone.
The numbers are daunting, but the bottom line is that
California is an attractive market place, not only
for import-exports, but for foreign companies who want to locate
here. The lure is California itself, which has an almost
mythical reputation to some.
“That’s how we ended up with a French company producing at
the old McClellan Air Force base, a couple of Japanese
companies producing saki and soy sauce and Siemens
in Rancho Cordova,” said Brooks Ohlson, the director of the Center for
International Trade Development.
According to federal figures, U.S. affiliates of majority-owned foreign companies employ more than 5 million U.S. workers, or 4.4 percent of private-industry employment. An additional 4.6 million U.S. jobs indirectly depend on foreign investment
in the United States. Between 2002 and 2006, nearly 2,900 new projects were announced or opened by foreign companies,
yielding $82 billion in investment and about 170,000 new jobs.
California exports amounted to more than $127 billion, according to 2006 figures, an increase from the 2005 total of nearly $117 billion. California maintained its perennial position
as a top exporting state. California’s top trading partners are Mexico, Canada, Japan, China
and South Korea. California trade and exports translate
into high-paying jobs for more than 1 million Californians.
Ohlson, whose job entails building trade relationships
with other countries, notes that China is especially
partial to California.
“California holds a special place in the actual hearts
and souls of the Chinese community by virtue of our
size, our entrepreneurial spirit, our own Chinese business
community, our agricultural industry and high-tech. It’s a destination for tourism, for the entertainment
industry,” he said.
According to the Chamber of Commerce, trade between
the United States and China has risen rapidly over
the last several decades. U.S. exports to China are
on a steady increase from previous years. Hong Kong
GDP per capita is comparable to other developed countries.
The United States has substantial economic ties with
Hong Kong, and a report by the U.S. State Department
indicates that there are some 1,100 U.S. firms and about 54,000 U.S. residents in Hong Kong.
“During the past three years we probably hosted hundreds
of delegations specifically from China,” added Ohlson, who returned last week from a business
meeting in China.
Just what constitutes the Pacific Rim? Business and
trade experts use the term to describe the major Asian
economic centers – Japan, which has the world’s third largest economy; China, South Korea, Singapore, Hong Kong, Taiwan the
Philippines, Vietnam, even Australia and New Zealand; some even include India. Technically, some 41 nations comprise the Pacific Rim, including Tuvalu,
Brunei, Vanuatu and Timor-Leste. Some of the Pacific Rim nations have formed
a trade group called the Asian-Pacific Economic Cooperation organization, or APEC,
which includes Mexico, Malaysia, New Zealand, Papua,
New Guinea; Brunei and Thailand.
But when trade developers talk about the Pacific Rim,
they often are talking about the major economic players,
including what are known as the “Four Tigers”—Hong Kong, Singapore, South Korea and Taiwan—so-called because of their aggressive economies.
The members of another trade group, the Association
of Southeastern Nations, “have signed an agreement to become an economic union
by 2020. The agreement sets deadlines for lowering travel
restrictions and tariffs in the region of 500 million people. Jointly, their $1 trillion economy is slightly larger than India’s,” the Chamber reported.
In it’s analysis of international competitive markets, the
Chamber said “ASEAN includes Thailand, the Philippines, Indonesia,
Cambodia, Malaysia, Singapore, Laos, Vietnam, Brunei
and Myanmar. In November 2004, ASEAN and China signed an agreement to eliminate
tariffs on all merchandise trade.”
The 2004 deal is part of a five-year process to create a free trade area between China
and the 10 ASEAN nations. They have begun to implement two major
agreements leading to the creation of the free trade
area by 2010. The agreement will cut tariffs for nearly 7,000 products. Once fully implemented, the agreement will
create a free trade area of nearly 2 billion people and a combined gross domestic product
of $2 trillion. It would be one
of the largest trading markets, eliminating nearly
all tariffs on goods, moving to liberalizing trade
in services and opening cross-border investment.