In May, AEDC President Bill Popp joined more than two dozen Alaska companies — including half a dozen AEDC Investors — for Opportunity Alaska: China Trade Mission. China is Alaska’s largest trading partner and the trip, organized by the State of Alaska, aims to connect Alaska businesses with industry leaders, potential customers, key decision makers and government officials.
In Chengdu, in the southwest region of China, it’s late in the afternoon on Monday, May 21, but still late Sunday night in Anchorage, as China is 16 hours ahead. It’s a long journey to get here and I am only just getting a sense of this city of 11 million, a comparatively small city in China.
My visit to China is beginning in this up-and-coming region as part of the Opportunity Alaska China Trade Mission organized by Governor Bill Walker and his team. The group I am traveling with consists of nearly 50 business representatives, members of the governor’s staff, three state commissioners and a couple of members of the Alaska media. The business interests represented include seafood, mining, native corporations, entrepreneurs and tourism, as well as regional economic development representatives from the Interior and Matanuska-Susitna Borough. Yours truly reps the general business interests of Anchorage.
Most of us arrived just after midnight today, with more trickling in as the morning progressed. The journey for most took more than 20 hours or more of airports and airplane travel to get here. So today is a pretty light schedule so that everyone can get their balance before embarking on the very aggressive schedule laid out for us over the next week and a half.
Our only business Monday was a meeting with the American Consulate General Jim Mullinax and three of his team members for a briefing on South China. Chengdu is located in Sichuan Province and is the center of an inland region that is only now seeing the benefits of the amazing economic growth in China that largely benefited only the eastern coastal regions of China in cities like Beijing, Tianjin and Shanghai. Now, this region is seeing an economic boom driven by government policies focused on spreading the wealth and economic growth that has driven China to become the second largest world economy behind the U.S.
Chengdu has already seen trade missions from Alaska focused on seafood and tourism in the last couple of years. Our good friends from Visit Anchorage were here in 2017 marketing Anchorage and Alaska in partnership with other Alaska tourism organizations and Alaska is already seeing positive results with noticeable growth in the number of Chinese tourists visiting Alaska this last winter. Our crisp, clean winter environment under the northern lights has a special appeal to tourists from China and we should see more visitors from China in the coming years. Way to go, Visit Anchorage!
The Consulate briefing brought focus to the growing affluence of the region surrounding Chengdu, which is providing some new emerging opportunities for Alaska seafood and other goods we can export. Quality is more and more on the minds of Chinese consumers in this region and Alaska wild seafood is seeing growing demand, as are many other food and agriculture products the U.S. is selling to this region. It also underscored the significant change that is taking place in the region due to the rapidly expanding economy that is now realizing 8 percent annual economic growth. It is also a time of significant economic and social growing pains for the broad and very diverse populations in this region.
One economic example of change is the incredible growth seen in home delivery. While we in Anchorage are used to home delivery of a lot of different products like pizza and other kinds of takeout that can sometimes take more than an hour to deliver, in Chengdu you can get home delivery in about 30 minutes; everything from full family meals of every kind of local cuisine to clothing, consumer electronics, furniture and everything else you could imagine.
You have to be within a certain distance from the vendor’s location, but this business model has taken off so strongly that it now employs tens of thousands of low-wage delivery workers in the region. Many members of this newly emerging workforce are transplants from the rural villages of the region where most residents are subsistence farmers with no real job prospects beyond growing the food they need to survive.
The regional government, with guidance from the national government, is pushing to urbanize these rural populations in an effort to bring them into the broader economy under the premise that this will raise their standard of living. Largely, this has been the result, with many seeing their standard of living improve from an economic and public services perspective. But it has also come with a corresponding loss of cultural roots and language.
The Consulate briefing covered a lot of ground in a short period of time, touching on trade policies, the many challenges of doing business in China and the assistance the staff at the U.S. Consulate can provide, within certain policy and regulatory boundaries. The team at the Consulate is very much up to speed and clearly a very sharp group of professionals. Any business thinking about selling goods or services to new customers in China would be wise to make use of the services offered by the U.S. Commercial Service (contact Francis Peters, Commercial Consul) and the U.S. Department of Agriculture (contact Yvonne McDowell, Agricultural Consul) at the Consulate offices before plunging into the somewhat murky waters of the Chengdu marketplace. I can’t thank the staff of the U.S. Consulate enough for a great briefing to begin our work in China.
On Tuesday, the Alaska trade delegation will attend the 4th China-U.S. Govenors Forum at the Century City International Convention Center here in Chengdu. The conference schedule will cover a large number of trade topics and will include addresses from Chinese and U.S. officials representing several American states and Chinese provinces. The afternoon sessions will include several business matchmaking sessions that will put together interested businesses from both countries that will hopefully result in new market openings for Alaska products and services.
Tonight several of us are going to dinner to enjoy a Sichuan hot pot, a renowned local favorite. Given the reputation of the Sichuan region for fiery spicy food, this is going to be an adventure!