Bad news about contaminated pet food and toys containing lead paint aside, China still remains the top overseas market for Southern California. While the 10th annual Global Trade Summit in Universal City may have had “global” in its name, all roads still led back to the world’s most populous country; the behemoth in Asia whose embrace of capitalism changed the nature of business costs and international supply chains. Latin America, Eastern Europe and other parts of Asia got their mention during the half day event hosted by the Economic Alliance of The San Fernando Valley but in the end it was all about China. “For business people looking for opportunities in a new market and as a source of product, it can’t be beat,” said Katherine Whitman, a partner in Toluca Lake-based Pomegranate International, a firm that brings American and Chinese businesses together. Attendees moved between four rooms at the Sheraton Universal to hear keynote speakers and panel discussions and visit at exhibitor booths offering advice and insight into doing business overseas. Opening a manufacturing facility abroad can be expensive, so many companies rely on locals to provide that service. But the challenge before them is choosing the right partner and due diligence is needed before moving ahead with signed agreements, several speakers said. Turning your back on the locals can also pose problems. Business owner Michael Salemi said he saw associates fail in foreign markets because they neglected to hire local expertise. The manufacturer of a cosmetics packaging firm based in Long Beach, Salemi said he travels to China every two months and encourages companies to go there. To succeed there, a business must use the approach of treating the country much as the United States was a century ago, Salemi said. “Most people in China working in business don’t have generations of business association,” Salemi added. Hong Kong Trade Development Council marketing manager Kelly Ma presented the attendees of the panel discussion she participated in with a flurry of numbers exhibiting the purchasing power of the Chinese populace a 20 percent annual trade growth over a 10 year period; $60 billion in direct foreign investment in 2006; a middle class of 200 million; and the third largest luxury consumer market for jewelry and electronics. “There are more people who want things and they have the money to buy them,” said Whitman, who moderated the discussion on “hot” markets. To its already spotty record on human rights and not aggressively going after counterfeiters and pirates of U.S. goods, China added this year the bad press of some tainted products imported to the states. In the spring, retailers pulled from the shelves pet food made there after it was found to contain chemicals toxic to animals. That was followed this fall by major toy manufacturers recalling mass numbers of products that sported lead paint. Whitman expected the bad publicity would result in a change in focus away from China at the trade summit and was surprised the country was not downplayed. “I haven’t noticed any diminished interest,” she added. Nor was there any lack of interest in markets other than China. For overnight delivery giant FedEx, South Korea and Australia are among its top five markets, said regional sales manager Steve Arnold. Australia purchases a large amount of U.S.-made farming equipment because its agricultural products are shipped to Asian markets, Arnold said. In Latin America a number of countries seek U.S. investment to better their ports, airports and roads. Columbia looks to put six airports into private hands, and Ecuador has hired real estate firm Colliers International to bring cargo operations, catering and general aviation to one of its airports. Pending before Congress are free trade agreements with Columbia, Panama, and Peru that will eliminate hefty tariffs imposed on U.S. goods. American business investment helps promote growth, stability and prosperity in fast developing nations such as those, said Sean Reilly, a senior policy advisor for the U.S. Commerce Department. Exports to China have doubled to $10 billion since 2002, and goods shipped from Southern California to the United Arab Emirates increased 260 percent in the same time period. But Congressman Brad Sherman took the bloom off the rosy picture painted by Reilly by emphasizing the enormous national trade deficit and a more serious approach to foreign trade by the government. Lawmakers should focus on enforcement of trade agreements and getting results rather than just changing the written rules, Sherman said. When he talks to people who have traveled to China they have all told Sherman about seeing counterfeit American goods sold openly on the streets. Yet the last two presidential administrations never hinted to the Chinese government that allowing pirated goods would cost them access to the American market. “No wonder you live in the country with the greatest trade deficit [in history],” Sherman said.
