The Chinese export market is booming for U.S. companies, and as China’s middle class grows, so will opportunities for American businesses, the president of the U.S.-China Business Council said Thursday.
“It’s a $300 billion market for U.S. companies,” John Frisbie said in an interview before speaking at World Trade Center Buffalo Niagara’s 17th annual conference in Statler City. “That’s why China matters; it matters for U.S. companies and for U.S. jobs.”
It also matters in Erie and Niagara counties, where the market for Chinese trade has grown by 330 percent in a decade from $76 million to $333 million in 2012.
“That is significant growth,” said Frisbie, who has been president of the private, nonprofit group that represent 220 companies doing business in China since 2004. His keynote speech was on “Securing Global Trade.”
More than 300 CEOs and other executives from companies in Western New York and Southern Ontario attended, while 22 local companies that do work overseas had their products on display.
“It an opportunity to promote the international market and see what local companies are doing and spotlight their successes,” said Christopher Johnston, president of World Trade Center Buffalo Niagara.
A decade ago, China was far down on the export list for the U.S., but with a 17 to 18 percent a year growth, it’s now the nation’s third largest, behind Canada and Mexico. It’s the sixth biggest trade market for New York, with $4.2 billion in exports for the state, an increase of 192 percent in the past decade. That’s more than double the worldwide growth rate of 89 percent during that time, Frisbie said.
For Western New York, it’s No. 1 export to China is transportation equipment, valued at $99 million, followed by waste and scrap worth $72 million. Frisbie said more growth opportunities are “already baked in” because China’s middle class is projected to double in the coming years to 600 million, increasing demand for consumer goods.
While the Chinese economy is now experiencing moderate growth due to the European economic downturn, China is still a promising market because it’s economy is growing by 6 percent to 7 percent a year, he said.
Even so, many businesses are wary of the Chinese marketplace because of fears about the theft of intellectual property by Chinese manufacturers.
Robert L. Stevenson, president of Eastman Machine Co., a Buffalo manufacturer of fabric-cutting machines, relayed stories of Chinese manufacturers illegally copying the appearance of Eastman’s Blue Streak machine and other products.
“They looked identical to ours,” Stevenson said. Eastman even encountered a Chinese manufacturer whose imitation machine was called “Westman.” The company has addressed these infringements through the U.S. and Chinese legal systems, but it’s a continuing problem, he said.
“We don’t have the resources to play the legal game of Whac-A-Mole,” Stevenson said, adding that after addressing one manufacturer’s transgressions, another case pops up.
Conrad Wong, intellectual property rights officer for the U.S. Patent and Trade Office, said it’s “a multifaceted problem” that “we don’t take lightly.”
He encouraged businesses to check with U.S. embassies and consulates in the countries they are doing business and, if a problem arises, address it within the host country’s legal system. Wong said that China is cracking down on violators but that “it’s not a perfect system.”
“It’s a conundrum,” he said. “It’s a push-pull that does occur, based on human nature.”