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Winter 1997 - Volume 2, No. 3

Governor Sundquist Promotes Trade With China
by Governor Don Sundquist

I am convinced that Tennessee's economic health, our ability to provide a rewarding standard of living for our citizens, is increasingly linked to active participation in the global marketplace. That's why I support an aggressive program for developing trade and commercial opportunities, building upon the work of my predecessors, Lamar Alexander and Ned McWherter.

The possibilities for Tennessee companies in China's emerging economy are particularly exciting. In pursuit of these opportunities, an active partnership between the state and the Tennessee Valley Authority supports Tennessee companies in commanding an even greater role as providers of the products and services needed to fuel China's explosive growth and development.

When I first visited China in 1978, as a member of a delegation from the American Council of Young Leaders, I saw a land very different from what I found earlier this month. A new era of openness has emerged, bearing out what I have long believed that open and free trade between the United States and the People's Republic of China is a winwin situation for both nations and both peoples.

Tennessee's 200 years of history is, in contrast, not much time at all when compared to the 7,000 years of China's recorded history. Yet, at a time when both economies are booming, Tennessee and China are focused on new beginnings and new ways of working together to meet the challenges of the future.

China's economy expanded by more than 50 percent over the last five years, and this economic momentum is predicted to continue at a brisk pace well into the 21st century. The nation is likely to become the singlemost important trading partner with the U.S. over the next 20 to 30 years.

China is Tennessee's sixth largest market for export products and services, after Canada, Japan, Mexico, Germany and the United Kingdom. Agricultural exports average more than $425 million each year and are the state's number one export to China, followed by chemicals, nonelectric machinery, primary metal products, paper and food and kindred products. Overall, Tennessee already ranks among the top 10 states in terms of products and services that China imports from the U.S.

During the Economic Opportunities Through Water and Energy Conference in Beijing, those of us representing the State of Tennessee met with officials from our sisterstate of ten years, Shanxi Province. Warmly received and engaged by our counterparts at this meeting, we renewed the relationship that in the early eighties established exchanges in trade and education between Tennessee and Shanxi and served as a springboard into opportunities in other areas of China.

In a show of goodwill and friendship, Shanxi ViceGovernor Xue Jun and I signed an agreement to work toward expanded exchanges between Tennessee and Shanxi in 1997. These exchanges are suggested in the areas of economics, trade, culture, education, science and technology and medicine. This meeting served to renew the formal relationship between our sisterstates and marked the first time since 1985 that Tennessee honored Shanxi's official invitation for the governor of our state to visit China.

Following our meetings in Beijing, Tennessee Dept. of Agriculture Commissioner Dan Wheeler led a fourmember delegation to Taiyuan, the capital city of Shanxi Province. As official guests of Governor Sun Wensheng, Tennessee's delegation spent their dayandahalf visit touring both private and stateowned agricultural operations and outlying rural villages and meeting with local officials. They found every inch of land in use, either planted with crops (mainly corn, millet, sorghum and vegetables) or sheltering village inhabitants. Technical assistance for agricultural development is an area of particularly keen interest to our Shanxi counterparts.

Whether from economists' foretellings or from firsthand observation, we can predict with certainty that China's role in the world economy will continue to have implications for us in Tennessee. Now is the time for resident companies to stake their claims on tomorrow's business landscape. And, through the Tennessee/TVA partnership and a renewed sisterstate relationship between Tennessee and Shanxi, Tennessee's companies are a step closer to matching their strengths to the needs of the world's fastest growing market.

In terms of its farm sector, technological capabilities and service sector strength, Tennessee is well equipped to serve the growing demand for goods and services that will accompany an endlessly expanding Chinese market. China's Ninth FiveYear Plan calls for investing in target industries that complement the technical capacities of companies already here in Tennessee: machine building, electronics; automobile manufacturing; construction and building materials; textiles and light industry. As farreaching growth moves further and further into China's interior, the developments and the opportunities will be stunning.

Tennessee companies intent on competing globally are strongly advised to evaluate what a foothold in the China market could mean for their futures. Ultimately, success in China means more jobs for Tennesseans as companies position themselves as industry leaders that set the standards, provide the systems and service the technologies for a nation ripe for longterm economic development. Without a presence, companies risk surrendering market share in China and the greater Asian region to their rivals from around the world.

The China market represents vast opportunity for those with long term vision and resources to invest. In partnership with TVA, and with additional support from Ambassador Jim Sasser and those serving with him at the American Embassy in Beijing, the State of Tennessee is facilitating a link between Tennessee companies and the opportunity that lies ahead.

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