Ohio takes a lead in generating China - US trade contracts

Business leaders in Ohio are singing the praises for doing business with China, and for very good reason. This past January alone, Ohio industry signed $2 million worth of contracts with the People's Republic of China. More important, the businessmen are negotiating two-way projects worth more than $600 million.

Not to be outdone, business officials in neighboring Kentucky are also seeking to hammer together a "China connection" that promises lucrative financial return.

Late last year, a Kentucky state delegation visited China on a 17-day trade mission that is already leading to important contracts -- or promises of contracts.

One major corporate concern, for example, General Telephone & Electronics (GTE), which has a plant in Madisonville, Ky., is hoping to sell mining equipment to China, either for cash or as barter for precious metals used by GTE.

What's happening in the Midwest -- with Ohio and Kentucky -- is hardly unique , following restoration of trade and diplomatic links between the US and the People's Republic of China.

Throughout the US, from the West Coast to the heavily industrialized Atlantic seaboard, US firms are vying with each other to be included in trade delegations traveling to China.

Gillian Leavitt, with the National Council for US-China Trade, says tours between the two nations are running "well ahead" of 1979. As business leaders gain greater information about the sizable Chinese trading market, with its need for greater industrialization, she says, they increasingly see areas where their own firms might be of service -- and turn a profit.

During 1979 there were some 42 tours conducted by the National Council, 30 from China, and 12 from the US.

But beyond the mere increase in numbers, says Miss Leavitt, there is a change in the "types of groups" traveling between the two superpowers.

Now, she says, tour groups tend to come from more "general" industrial groups in China, such as from an overall industry committee or board, rather than just from a specific plant or factory.

From the US side, representatives of entire states, community development boards, and overall political-economic groups are now making the China trip, as opposed to officials from specific plants or firms.

The case of Ohio, say officials here, is an example of this newer pattern. Ohio is the third largest manufacturing state in the US, with more cities of over 100,000 population than any other state.

According to Frederick Sexton, director of the Ohio Division of International Trade, state officials quickly grasped that they would logically have many diversified industries that could be of service to a nation seeking modernization like China.

The upshot? Ohio now has an industrial agreement with Hubei (Hupeh), a Chinese province. The two-way industrial accord is believed to be the only one of its kind.

Ohio and Chinese leaders have so far made a series of trips back and forth. The latest visit by Ohio officials included representatives from tire, machine tool, rubber, chemical, welding equipment, and iron and steel firms.

The two-way relationship is now so close, says Mr. Sexton, that Ohio is installing a direct telex system to Wuhan, the capital of Hubei province. Also, the Chinese will sponsor an exhibit at the Ohio State Fair this coming August.

The most recent tour of China, says Mr. Sexton, "generated more sales on a single trade mission" than any other trade mission undertaken by the state in any part of the world.

In Kentucky, state commerce officials are also enthusiastic about growing links between local industry and Chinese trade officials.

GTE, for example, which has a Kentucky plant, has shipped samples of its mining tool bits to China to see if they will be applicable to that nation's extensive mining operations.

"The Chinese have a great need for industrial and mining equipment," says Edward J. Reardon, a spokesman for GTE. For that reason, he says, the company is "very hopeful" of reaching an accord.

US government officials here note that as interest in China trade grows on the part of US firms, it is important to establish proper procedures about gaining access to the People's Republic of China. These include:

1. Directly contacting the US Commerce Department. The department will offer advice on best ways of contacting appropriate agencies or industrial groups in China, plus offering advice on "protocol" and dress behavior.

2. Work through a "trade" group such as the National Council for US-China Trade. Although there are other groups operating in specific "cultural" areas, the council remains the major group providing industrial contacts with mainland China.

3. Directly contact the Chinese government. But here, caution officials, it is best to first make contact with the US Commerce Department. Most important, they say, a firm must initially reach the appropriate industrial group in China. The Commerce Department would usually be able to identify the proper official or group.