Boeing, which just won a $7.2 billion order from China for jetliners, isn't the only U.S. company whose exports to the world's most-populous...
Boeing, which just won a $7.2 billion order from China for jetliners, isn’t the only U.S. company whose exports to the world’s most-populous nation are flying high.
In 2000, exports to China accounted for just 1 percent of sales at Santa Clara, Calif.-based Applied Materials, the world’s biggest maker of computer-chip equipment. By last year, says Executive Vice President David Wang, the figure zoomed to 12.5 percent — almost $1 billion.
At a time when the U.S. political focus is on imports from China and a record trade deficit, American companies are profiting from the other half of the equation: exports.
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“While the imports from China get most of the attention, there are enormous opportunities” for U.S. businesses, says William Primosch, director of international business policy at the National Association of Manufacturers (NAM).
U.S. companies sent an estimated $35 billion in goods and services to China in 2004, a record. The total is up 26 percent from the previous year and more than double the 2000 figure, according to Primosch’s Washington, D.C.-based trade group.
For Boeing, the agreement signed Friday by Chinese airlines to buy 60 787 aircraft — the biggest order for the new model formerly known as the 7E7 — comes after the company delivered 17 commercial aircraft to China in 2004, bringing the five-year total to 88.
“It’s an incredible market,” Larry Dickenson, senior vice president for commercial-airplane sales, said in an interview after signing the contract in Washington. “If you’re in international business, you’ve got to be there.”
U.S. shipments to China probably rose to 4.2 percent of all exports last year, up from 2.2 percent in 2000, says Primosch. Increased sales to China contributed to a shift in momentum between 2003 and 2004, with overall U.S. exports showing faster acceleration than the larger import figures. According to Commerce Department figures, total exports rose 12.4 percent on average for last year’s first 11 months, almost three times as fast as in 2003. Imports rose 15.9 percent on average, less than twice the 2003 figure.
The release of final 2004 figures next month may make China the fourth-largest buyer of American goods after Canada, Mexico and Japan, Primosch says. At the current rate of growth, China could be closing in on Japan for third place by 2006, he predicted.
The growth of U.S. exports to China is overshadowed by the political debate about cheap imports, which labor groups say contributed to the loss of 2.6 million manufacturing jobs in the U.S. since March 2001. The U.S. probably imported a record $195 billion of goods and services from China during 2004, producing a bilateral trade deficit of about $160 billion, NAM estimates.
The Bush administration has made raising exports to China a priority, in part to ease the trade deficit. The administration is encouraging China to let its currency float against the dollar, making exports to China more competitive; leading trade missions; and trying to help manufacturers increase sales.
“We’re trying to go after the barriers they’re facing,” Al Frink, the administration’s newly appointed “manufacturing czar” at the Commerce Department, says in an interview. “Our manufacturers, especially our smaller ones, are fearful of getting into China because they are fearful of market access and intellectual-property protection.”
Applied Materials, for one, has seen improvement, Wang says. “Things that used to present problems are now routine,” he says. “There’s a regular procedure for getting import permits, and the customers have passed the learning curve.”