China trade target

ST. PAUL - China is ripe for stronger ties with the United States.

"China is changing dramatically and rapidly," Christine Schulze said as she wrapped up packing for her fifth trip to the world's most populous country, this time as part of a Minnesota trade mission.

Hosting the 2008 Olympics has inspired the Chinese to become a more important part of the world community, she said. "They want to be considered a strong international player."

Schulze joins 216 others on a China tour designed to build relationships between that country and Minnesota. For the Chinese, building relationships comes before conducting business, so that will be the emphasis of the weeklong mission.

"China is going to have a lot to do with world markets," Gov. Tim Pawlenty said. "Anybody who wants to be forward looking and prepare for the future needs to understand China."

Pawlenty will lead the Minnesota group, the largest American trade delegation ever to visit China and twice the size of one then-Gov. Jesse Ventura led during his term. The mission, with five days in China, will cost the state $100,000. Other than state employees, participants are paying their own way.

The Minnesota delegation will be divided into seven groups - specializing in topics such as agriculture, education and the environment - that have 93 events scheduled, not including participants' private meetings with Chinese government and business leaders.

Schulze's Concordia Language Villages organization, sponsored by Concordia College on land northeast of Bemidji, long has worked with China to improve language skills in both countries. It has operated a Chinese language program in Minnesota since 1984 and in 1997 opened an English program in China.

"Every Chinese student is being exposed to and taught English, beginning in the early days," Schulze said.

Laurie Lewandowski will explore business possibilities with China for SJE-Rhombus of Detroit Lakes, a manufacturer of switches and other devices for sewage systems.

"They are building more treatment facilities," Lewandowski said. "We think there actually is a market for our product there."

The firm has already made some sales in China.

"We believe that is a growing market and the more affluent people over there get, the more they are going to want to buy," Lewandowski said.

She also will explore the possibility of expanding the company's manufacturing operations into China, where pay and the skill level of workers often is lower than in the United States. If SJE-Rhombus expands to China, Lewandowski said, the Detroit Lakes plant will not lose jobs. But she said opening a China plant could prevent labor shortages the company experienced in 2000 and 2001.

David Torgerson, executive director of the Minnesota Wheat Research and Promotion Council, said China has the potential to be a great customer, or a great competitor.

Ken Asp of the wheat group already is in China looking over farms and touring an ethanol plant, part of what Torgerson said is a continuation of the council's relationship-building efforts.

China is buying more spring wheat, usually used to make bread, than in the past few years. In 1996, the United States sold 5.5 million bushels of spring wheat to China, compared to 34 million tons a year ago.

But China also grows more of its own wheat, leaving open the question of whether it will be a customer or competitor.

"If they continue to need wheat imports, they are going to be a major player in the world markets," Torgerson said. "But they have a lot of productive land, and they may become an exporter."

Like in other businesses, the wheat industry has trouble finding places to grow.

"It is kind of a mature market," Torgerson said. "There just are not a whole lot of new buyers coming into the market. We don't see huge potential for a lot of new exports in many places in the world. China is one of those places that could have an impact for being a new importer."

Readers can reach Forum reporter Don Davis at (651) 290-0707

China trip facts

Living standards in China have dramatically improved in recent years and more personal choices are allowed, although political controls remain tight.

• More China residents have attended the University of Minnesota each year since 1914 than any other American school. Many U of M graduates will be contacted during the Minnesota trade mission.

• Minnesota's trade mission has 217 members, twice as many as most state missions to the country. It has four times more than a California one, headed by Gov. Arnold Schwarzenegger, visiting China at the same time.

• Alexandria Technical College President Kevin Kopischke is on the mission in part to find a Chinese partner for the school's nationally known robotics program.

• Midwestern companies lose more jobs to the southeastern United States than to China.

• Seven students will provide daily reports on the trade mission on www.minnesota-china.com/education.

• China has the potential of being a new investor in American companies, according to state Economic Development Commissioner Matt Kramer. "They have money."

• Minnesota buys $650 million in goods from China annually. The state's $273 million in sales to China are mostly computers and other electronics.

• China is the world's most populous country with an estimated 1,306,313,812 people.

- Sources: Minnesota Gov. Tim Pawlenty,
Economic Development Commissioner Matt Kramer, CIA