btw, to continue watch & brief on crawfish and such, and a concurrent glimps into us-china trade imbalance, as in the 'whys', perhaps:
focus.scmp.com
Thursday, March 9, 2006
Katrina recovery builds foundations for China trade boom
JACQUI GODDARD
Tom Tang pauses as he takes in the scene laid out before him. It is difficult to describe the wastelands of New Orleans.
Standing amid the devastation of the city's Lower Ninth Ward - a neighbourhood that was obliterated when the levee holding back the Industrial Canal collapsed during Hurricane Katrina, sending billions of litres of water crashing onto the houses below - Mr Tang shakes his head. "Everything's gone from here. I'm shocked," he said.
Rebuilding the city and other regions of America's Gulf coast affected by Katrina is complicated and fraught with controversy. The process of recovery will be long and costly. But for some it will be extraordinarily lucrative - and Chinese manufacturers are among those who hope to cash in.
This is Mr Tang's second trip to the area in recent months in his capacity as a senior consultant with the Shanghai International Merchandising Centre (IMC), a Shanghai government-sponsored association that represents 25,000 Chinese manufacturers.
The IMC wants to establish links between manufacturers in China and businesses in New Orleans and elsewhere in Louisiana that might want to import their products, with particular emphasis on items that will be in high demand as flood-ravaged homes are rebuilt, wind-damaged roofs are mended and the scattered citizens - or some of them, at least - return.
"Now that China has world-class factories, we can build things at a high quality and reasonable cost. We want to send those high-quality products like construction materials, heavy furniture and appliances here," Mr Tang said.
"We envision a trade boom between China and the US Gulf coast.
"We are still in the initial planning - but it could be huge and it could be long term."
It is a potentially significant money-spinner: Mayor Ray Nagin has predicted that the rebuilding of his city will bring "the biggest construction boom this country has ever had", while the price-tag is estimated at anywhere up to US$200 billion.
Demand for goods and materials will be unprecedented.
"Based on our marketing survey, we found that the costs of building materials are rising and people have a limited budget," said Mr Tang, who rejects any notion that the Chinese are muscling in on misfortune.
"We don't want to steal money away from the residents and businesses, we want to help them rebuild and get people here and in China doing trade."
American traders will be invited to attend a "sourcing conference", in Shanghai in the coming months, where they can meet Chinese manufacturers and select products for import.
The IMC is not the only Chinese treasure-seeker in town. The China Council for the Promotion of International Trade (CCPIT) - the largest chamber of commerce in China, representing more than 80,000 companies - has also been on a charm offensive.
"We have made a lot of good friends in New Orleans, we see big potential," said David Chen, president of the Los Angeles office of the Sino-American Business Information Centre (SABIC), who acted as CCPIT's ambassador to Louisiana last week. He was accompanied by executives from a company that produces aluminium window frames and doors, and from another that makes machine parts and timber products.
The IMC and SABIC held talks with the city's economic development council, its Chamber of Commerce and World Trade Centre. There have also been discussions with officials from the Louisiana Recovery Authority, a body set up in the aftermath of the Hurricane Katrina disaster to oversee the state's resurgence.
Agenda items include a discussion about the feasibility of establishing an import-export distribution centre in New Orleans, whose port - the world's fifth largest - is twinned with Shanghai's.
As Chinese goods flow in to the centre, Louisiana's goods would flow out - or so the theory goes.
With the proposals still only at the embryonic stage, quite what that balance would be is anyone's guess, however. When asked during a meeting at the World Trade Centre in New Orleans what kind of goods it felt it had to offer Louisiana, the IMC delegation offered a long list of cheaply produced products ranging from plasterboard to floor coverings, windows, glass and power generation equipment.
The list of products Shanghai sought from New Orleans appeared shorter. "Chemical products" was the only American material that came immediately to mind, the IMC's managing director, Xie Zhen, told the meeting.
Justin Xu, who is a graduate of New Orleans' Tulane University and now the IMC's representative in the shattered city, said later, however, that "anything" would be considered. Among local traders who have expressed an interest in being introduced to the Chinese market, he said, is Zatarain's - one of New Orleans' oldest retailers.
Founded in 1889, it makes traditional New Orleans food products.
"We are also thinking about sourcing soya beans from Louisiana. China makes a lot of tofu, which is made from soya beans," Mr Xu said. "By setting up business like that, we would be pretty much creating a two-way traffic."
In a country where unfair Chinese competition is blamed as one of the major causes behind the erosion of the domestic manufacturing industry, the idea of encouraging more Chinese trade to flourish on the back of America's worst natural disaster might seem inappropriate.
The US trade imbalance with China ballooned to a record in 2005, according to figures from the US Census Bureau, leaping to US$202 billion.
But with the US already enjoying a construction boom before Katrina roared in last August and flattened 205,000 homes - just over half of them in New Orleans - pressure on domestic resources was intense and is even more so now.
"It's not just the Chinese - I spend probably 40 per cent of my work now with international representatives who see New Orleans as a great platform for business," said Kevin Pollard, a director of the New Orleans World Trade Centre.
"This isn't a very vertical city right now and a lot of these people were homeowners who didn't have substantial income, maybe didn't even have insurance, and the question is how do we get them back here?
"New Orleans won't be as affordable a city as before, but we need to take out a piece of the puzzle and solve it. We need to get this city back as close to a living, vibrant community as we can and we won't be able to do this without help."
Last week's Mardi Gras celebrations in New Orleans, which temporarily drew about 300,000 people back for the traditional carnival processions, gave both the IMC and SABIC a glimpse of the city's cultural spirit. Both are now considering hosting charitable fundraising visits to China by New Orleans jazz bands.
"Maybe with co-operation between our two countries, it is possible there might even be Chinese dragons at next year's Mardi Gras," Mr Chen said. |
