WASHINGTON — The Kentucky Cabinet for Economic Development has recently said it will lead a business development trip to China later this month, the latest signal of U.S. state and local officials’ unwavering willingness to enhance cooperation despite simmering trade tensions between the world’s two largest economies.
“As we continue to build relationships with Chinese businesses and seek investment opportunities, we are executing our long-term strategy to tap into the enormous opportunities that exist in China,” Vivek Sarin, Kentucky Cabinet for Economic Development interim secretary, said in a statement earlier this week. “We are confident that this will lead to more jobs for Kentuckians.”
Sarin is certainly not alone. Many state and local officials, with a more pragmatic attitude, have expressed their continued interest in boosting cooperation with China in economy, culture, education and beyond, injecting positive momentum into the bilateral relations facing headwinds.
The “most important thing” for subnational leaders is about the business of moving their state forward around jobs, moving their state forward around prosperity and making sure that each citizen has an opportunity to participate in the economy, and that’s the “motivation” for their relentless efforts in seeking cooperation with China, said Reta Jo Lewis, senior fellow and director of congressional affairs at the German Marshall Fund of the United States.
The negative factors at the national level, however, have trickled down to subnational levels, raising concerns among officials, the business community and the general public.
Kate Brown, governor of the northwestern U.S. state of Oregon, recently said that what is happening nationally has had a “chilling effect” on commodity prices and the state’s ability to sell goods to China. “It’s been extremely detrimental particularly in the agricultural sector, which is a huge driver of the Oregon economy,” Brown said at a panel discussion held by the Brookings Institution in late July.
When asked whether Midwest farmers worry about losing the Chinese market permanently, former Missouri Governor Bob Holden said that he thinks they are very scared. “If that relationship with China and others disappears for the agriculture community, then you’ve really lost the foundation of this heartland reach all the way from the Great Lakes down to the Gulf,” he said.
For Los Angeles, the effects of the U.S. administration’s trade war are causing “considerable pain” at the local level, as trade with China accounts for 60 percent of the port’s total trade volumes, said Nina Hachigian, the city’s deputy mayor of international affairs, noting that the port’s exports to China are down 25 percent, with fruit, nuts and wine from California hit hard.
Nevertheless, the temporary setback in bilateral relations does not seem to have dampened subnational officials’ willingness to promote bilateral cooperation with a long term view.
“China will always represent a major market and I think it would be a mistake to overlook the potential that is there,” Don Pierson, secretary of Louisiana Economic Development, told Xinhua on the sidelines of the 2019 SelectUSA Investment Summit held in Washington in June.
In response to Chinese companies’ concerns stemming from the trade tensions, Pierson said the southeastern state has always been a very international state and “we would want to message that we remain open for business,” eyeing a strong economic and cultural partnership between China and Louisiana going forward.
Such remarks were echoed by many at the Fifth China-U.S. Governors Forum held in late May. Kentucky Governor Matt Bevin, whose state hosted the event, told Xinhua that he doesn’t think the rhetoric at the national level has undermined the enthusiasm of governors and investors, noting that the presence of nearly 400 people indicated unceasing interest in subnational dialogue.
“Our relationship with China is absolutely key, central to the success that we have had,” said Cyrus Habib, lieutenant governor of the U.S. state of Washington, noting that the northwestern state exports more to China than any other U.S. state, and China is also the state’s number one export destination.
Asides from economic cooperation, subnational leaders have attached high importance to cultural exchanges. “From my perspective as a governor, it’s all about the jobs and the economy, but if I can’t impact that I’m gonna focus on the relationship piece, the cultural piece, because that’s a longterm investment,” Brown said, adding that it will “pay off” for Oregonians in the decades to come.
Holden, who helped bring the first Confucius Institute to the state of Missouri, told Xinhua that “it’s my contention that how well you put together the cultural relationships, how well you build the education partnerships, will determine how successful you’re going to be in the business department.”
Last week, Chinese-owned manufacturer Phoenix Paper Wickliffe announced its plans to invest 200 million U.S. dollars in western Kentucky’s Ballard County to construct a new, 100,000-square-foot paper-and-pulp recycling facility. The new investment, on top of its original 150 million dollar investment, is on its way to creating 500 jobs in the rural community.
Bevin said “a lot has happened” since the establishment of U.S.-China diplomatic relations 40 years ago, and he saw great opportunities for both sides ahead. “We are just at the beginning. I think of a long journey together.”