In a few days, Governor Perry and a delegation of state and business leaders are scheduled to travel to China to represent the state at the Shanghai World Expo 2010. The purpose of the trip is to learn more about economic prospects with the world’s most populated nation and to share information concerning tourist and business opportunities available in the Lone Star State.
This trip comes on the heels of a visit by some 200 officials who the US government sent to Beijing last month for dialogue on strategic issues. Led by Secretary of State Hillary Rodham Clinton, this group received promises from Chinese leaders to continue looking at ways the US and China could cooperate in future business matters.
China is among America’s largest trading partners, with exports exceeding $70 billion a year, and local sales by US firms with operations in that country average nearly $50 billion annually. China also accounts for about 45.3% of the United States’ worldwide trade deficit.
Texas has been the nation’s top exporter since 2002, when it surpassed perennial leader California. Over the past eight years, the export gap between the Lone Star State and the Golden State has been steadily widening (although there are measurement issues involved).
In 2009, 210 countries around the world purchased Texas products to the tune of $163.05 billion. Exports to China from Texas last year totaled nearly $8.91 billion. Only exports from California ($9.74 billion) and Washington ($9.11 billion) to China totaled more. In the first quarter of this year, merchandise sold to China by Lone Star State businesses was up more than $939.61 million over the 2009 January-March timeframe.
Globally, Texas’s leading manufactured export category in 2009 was computers and electronic products, which was responsible for about 19.7% of the state’s total shipments. Chemical manufactures was second (19.0%), followed by machinery manufactures (14.6%), petroleum and coal products (13.1%), and transportation equipment (8.8%).
Of the 31 categories of merchandise Texas exports to China, the top five include chemical manufactures, computers and electronic products, machinery manufactures, crop production, and scrap materials. Chemical manufactures account for more than 40.2%. Approximately 16.8% of the state’s exports to China are computers and electronic products and machinery manufactures accounting for 10.3%. California’s major shipments to China are computers and electronic products (30.2%), and Washington’s top export is transportation equipment (45.1%).
Although China is the third-largest importer of Texas merchandise behind NAFTA partners Mexico and Canada, its percentage share has escalated dramatically since becoming a member of the World Trade Organization in 2001. Comparing 2001 with 2009, Texas exports to China increased 465.1% while shipments to Mexico and Canada for those two years expanded approximately 35.0% and 30.0%, respectively.
As a result of recession-induced difficulties, Texas’ overall trade experienced a significant drop from 2008 to 2009 ($29.18 billion). Mexico and Canada together accounted for nearly $11.65 billion of that amount, but trade with China saw a $486.09 million upswing.
More than 23,700 Texas companies are involved in export activities, with about 92% of them having fewer than 500 workers. Some 8.2% of all wage and salary employment across the state is directly linked to manufactured exports, and over 25% of those with jobs in the manufacturing sector are dependent on international trade activities for their livelihood. The multiplier effects are even higher.
To strengthen its overall economy, Texas must continue to take advantage of all opportunities to expand and enhance international trade. The Chinese population of 1.33 billion certainly offers unique possibilities toward that goal.