Trade mission to China aims to boost Wisconsin exports
Wisconsin Gov. Scott Walker is hoping a trade mission he will lead to China in April will expand the state's already thriving relationship with the world's second-largest economy.
Walker and leaders of the companies going with are looking to capitalize on China's growing middle class by increasing exports of dairy products, ginseng and processed foods. Walker also seeks to attract more Chinese capital to invest in businesses at home.
The mission will be his first trip to the country, which is Wisconsin's third-largest export market behind Canada and Mexico. The state moved nearly $1.5 billion in exports to China in 2012, up 12 percent from 2011 and 30 percent from five years earlier.
The 10-day, four-city trip starts April 12. Walker and others will meet with representatives from China's agriculture, machinery, medical device and clean energy industries where demands are rising but technologies are lagging. Officials said Wisconsin products and services can help China fill the gap.
Many Chinese consumers know Wisconsin for its ginseng, which sells widely around the country. Fewer know the state as the home to multinational companies like Harley-Davidson Motor Company and A.O. Smith Corporation, which see opportunity for their motorcycles, water heaters and other products.
"A governor-led mission will open the door for our work," said Lora Klenke, vice president of international development at Wisconsin Economic Development Corporation. "It's not just about sending our products and services in, but also about developing relationships with private investments and government funds that will invest in Wisconsin."
Walker's group will visit megacities including Beijing and Shanghai, and provincial capitals including Harbin and Hefei.
Details of the trip, including the public cost, were still being finalized, Walker spokesman Cullen Werwie said. It may include meetings with Wisconsin companies operating in China; a major buyer of Wisconsin's ginseng in Beijing; potential buyers of the state's wood products; and water sector representatives interested in Wisconsin's technology to help fight pollution.
Walker will also be on the hunt for Chinese companies interested in investing in Wisconsin companies, seeking to build on a meeting last fall when he hosted a group of more than 50 investors from Handan, a northern Chinese city.
Scott Mosley, foreign direct investment manager at WEDC, said Chinese investors are seeking to invest millions with Wisconsin businesses. About 18 Wisconsin companies have submitted pitches.
Many Chinese consumers know Wisconsin for its ginseng products sold widely in China, its largest global market, as herbal medicine and gifts. The state's annual ginseng exports to China jumped from 30,000 pounds in 2006 to 200,000 pounds in 2011.
Butch Weege, executive director of the Wisconsin Ginseng Board, said exports have grown thanks to lower tariffs and a crackdown on counterfeit ginseng. He said he believes Walker's mission will reinforce the quality and safety of the Wisconsin crop.
"It's all about building relations and mutual respect," said Dan Paulson, CEO of Madison-based InVision Business Development, whose Chinese office helps foreign businesses navigate China's economic system and deal with issues such as high labor turnover, rising labor costs and communications between Chinese employees and their foreign supervisors. "The key challenge is to understand the fundamental difference between the two business cultures."
For example, Paulson said in China, good business relations always start from good personal relations and trust. Most Chinese businessmen are reluctant to do business with foreign counterparts if they don't feel connected.
"It takes a long time to build that connection with the Chinese," said Paulson. "The governor's trip is a good starting point to show we are being serious."