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New office in Beijing, possible high-level trips to help court business
By Craig Simons
Cox News Service
Published on Sunday, Apr 06, 2008
SHANGHAI, CHINA: A small office in this bustling city offers a slice of home: A football signed by Ohio State fans sits on a shelf next to a bag of Ohio soybeans and a brochure for the University of Dayton.
The Ohio China Center, which opened in 2006, is part of a state plan to promote trade with the world's fastest-growing large economy.
Ohio officials in Columbus on Tuesday announced the opening of a second China office in Beijing, China's capital. The governor's office is considering high-level trips to China and may lobby for a Chinese consulate to be located in Ohio, experts said.
The state's efforts are driven by China's economic rise. Ohio exported $1.5 billion worth of products to China last year, a six-fold increase since 1998, making it Ohio's fourth largest export destination after Canada, Mexico and Japan.
With Chinese consumption likely to surge, ''the trend is that China will surpass Japan in exports'' in coming years, said Jeffrey Bernstein, a Shanghai-based business consultant who runs Ohio's trade development office.
Chinese companies have also begun to move overseas. But only a small amount of that multibillion-dollar investment has made its way to Ohio.
The purpose of Ohio's push in China is to change that, said Deborah Scherer, director of the Ohio Department of Development's global markets division.
''The U.S. is a big market and as Chinese investors become more comfortable having facilities outside their country, we feel that the next wave of investment is going to come from China,'' Scherer said.
To tap China's growth — and compete with efforts by other states — the state hired Emerge Logistics, a Shanghai-based consulting firm run by Bernstein, in 2006. The Shanghai office, which includes a room decorated with Ohio memorabilia, is supported by $200,000 annually split between the state and the Ohio Soybean Council, a research and lobbying group.
The state has set aside another $50,000 annually to support the new Beijing office, which Bernstein said would be operational before the end of the summer.
Meanwhile, dozens of Ohio companies have built factories in China to manufacture for sale locally and for export.
Delphi has invested more than $500 million in China, China's Beijing Business Today newspaper reported last year. The company has recently opened two joint venture manufacturing plants and expanded two existing facilities, according to a company press release.
The Timken Co., a Canton-based manufacturer, will open a $15 million factory later this month to produce precision parts in western China's Sichuan province.
''We certainly see the value in greater state participation in trade with China's rapidly expanding economy,'' said Jeff Dafler, a company spokesman.
Scherer and other officials hope to mimic success they have had attracting Japanese companies to Ohio. After Honda set up a small factory in Marysville in 1979, the number of Japanese-owned factories in Ohio has swelled to 339 employing more than 60,000 people, according to state figures.
Among states, only California has received more investment from Japanese companies.
Bernstein said Ohio is in a ''very good position'' to win Chinese business because of the state's history as a manufacturing hub and its strong infrastructure. His office is discussing possible investments in Ohio with Chinese producers of cars, automobile parts and electrical equipment.
State officials may also try to bolster links with China by competing for a planned Chinese consulate. Chinese officials have said they want to build a new consulate in the United States but have not said where or when construction will begin.
An official visit by the governor or lieutenant governor could help the state win lucrative business by showing high-level commitment, analysts said. A good opportunity could come in 2009, the 30th anniversary of a sister-state relationship Ohio signed with China's central Hubei province — the first such agreement between a U.S. state and a Chinese province.
Ohio, however, is just one of many states establishing or expanding development offices in China. Georgia will open a state trade office in Beijing this week, the latest in a flurry of openings.
To be successful, a state should remain in China for many years to build relationships, said James Zimmerman, chairman of the Beijing office of the American Chamber of Commerce.
''If any state says they're going to give it a one-year try, it won't work,'' he said.
Ohio's global markets division cut $300,000 from its budget during the current fiscal year as part of overall state cutbacks but will preserve its increased funding for China, Scherer said.
''My philosophy is you have to get in on the front end. You have to be leading the pack,'' she said. ''I think there's a long-term commitment.''
SHANGHAI, CHINA: A small office in this bustling city offers a slice of home: A football signed by Ohio State fans sits on a shelf next to a bag of Ohio soybeans and a brochure for the University of Dayton.
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