State of the State: State trade office plays matchmaker as Quincy courts China

Feb 1, 2005

Pat Guinane
Credit WUIS/Illinois Issues

Quincy’s Bayview Bridge provides both a path across the Mississippi River and a metaphoric glimpse across the globe. The cable structure bears a striking resemblance to the bridge that stretches across the Yangtze River Delta just outside Jiaxing, China, Quincy’s new sister city.

The Illinois Trade Office helped bring the two river cities together during a Quincy-focused foreign trade mission that still makes local officials ecstatic.

The November excursion was the first city-specific trade mission underwritten by the state, but Illinois officials say the trip is part of a larger shift in trade policy that comports with Gov. Rod Blagojevich’s approach to economic development. The state trade office is under the Illinois Department of Commerce and Economic Opportunity, which has divided the state into 10 regions, promising targeted assistance for each one.

“The Quincy trade mission was originally for that region,” explains Ross Harano, managing director of the Illinois Trade Office. “Our staff went to Quincy to talk to them about organizing a regional trade mission, and Mayor [Chuck] Scholz was so excited about this he said he’ll work with us and he helped round up the companies.”

One of those companies, Quincy-based Broadcast Electronics, has already returned to China to discuss a business opportunity there. And a Chinese manufacturer is scheduled to visit Quincy this month to see firsthand whether the Midwest town would make a good home for a warehouse or distribution center.

“We’re in the 21st century,” says Scholz. “It’s a global marketplace out there and even towns the size of Quincy, and maybe especially the size of Quincy, need to understand that we have to be in position to compete out there.”

Scholz, who is a member of Illinois Issues’ advisory board, says Quincy has the tools to be a contender in the international arena. In that regard, location is this river town’s most important asset. Illinois legislators approved a Quincy-area port district in 1998, giving the region greater authority to build shipping terminals and float low-interest loans to freight companies. The Illinois port authority was followed by the Mid-America Port Commission, an economic partnership among Illinois, Iowa and Missouri. The next step will be to secure foreign investment.

“Both the East and West coasts have a lot of congestion in their ports,” says Charles Bell, executive director of the Great River Economic Development Foundation, which represents Quincy and the rest of Adams County. “We have the ability, and it’s just beginning to develop, to bring containers from the gulf ports by barge, offload them here onto rail and truck and distribute them from the central U.S. in both directions. You eliminate the relatively high cost and particularly the congestion coming into either the East or West Coast ports.”

The November trip was an opportunity for the Illinois Trade Office to steer Quincy officials toward Chinese companies that could use a Mississippi River shipping route to improve their U.S. product distribution. Director Harano oversaw the planning in Chicago, coordinating with the state’s foreign trade offices in Shanghai and Hong Kong. That included the expertise of Norman Li, dean of the state’s nine foreign trade offices.

“He’s been doing it forever, knows everybody,” says Mayor Scholz, recalling the framed photos of Paul Simon and former Gov. James Thompson that adorn Li’s Hong Kong office. Scholz says it was the legwork of pros like Li and Harano who made the trade mission a success.

“We knew they would help us with translating the PowerPoint presentations and providing interpreters, you know, logistics of the trip — and they did,” Scholz says. “That was important. But what they really did for us is the contacts. They call them matchmaking sessions.”

After all, China is a long way to go for a blind date. The trade office set up meetings with contacts in Beijing, Shanghai and Guangzhou, pairing the Quincy officials with representatives of China’s national, provincial and municipal governments. The trade office also rounded up Chinese investors interested in Quincy and set up meetings with Quincy companies interested in expanding overseas investments. 

“It was very beneficial in the sense that we had access to people at a higher governmental level than we normally would because we went in with the state of Illinois,” says Chuck Kelly, director of international sales for Broadcast Electronics. About 100 employees manufacture radio transmission equipment at the company’s production facility in Quincy. Kelly says his firm has two decades of international sales experience, including business in China. But the state-sponsored trip allowed him to meet with Chinese officials who are preparing the logistics to broadcast the Beijing Olympics in 2008.

“We typically don’t participate in the standard everyday trade mission,” Kelly says. “But we felt that, given the size of the market of China and the unique opportunities that we saw in this particular trip, it made good sense for us.”

Also participating were Gardner Denver and Quincy Compressor, companies that already have a presence in China. The industrial air compressors and vacuum pumps they produce are in demand as China forges ahead with its industrial revolution. While the Chinese national economy is experiencing rapid growth — about 9 percent in 2004 — the standard of living for most citizens is improving at a much slower rate.

The infrastructure challenges that confront the growing superpower put Klinger Engineering, another Quincy company, in great demand during the trade mission. Chinese officials were interested in the firm’s expertise in water and wastewater treatment projects. As that country becomes more urban, advice on highway construction, city planning, pollution control and building codes is at a premium.

“We know that China needs to clean up its air, water and soil,” says Harano, head of the state trade office. “We know the World Bank is funding Shanghai [by] approximately $25 billion. So we know to follow the money. We know that there’s going to be some tremendous environmental issues there.”

Harano adds that China’s 2001 acceptance into the World Trade Organization means that the country has to “start coming up to the 21st century in terms of environmental issues.”

In 2003, Illinois ranked seventh among the states in exports, and Ross Harano, managing director of the Illinois Trade Office, says our $26 billion in annual exports support 603,000 Illinois jobs.

Engineering, architectural and environmental firms from the Chicago suburbs visited China on another state-sponsored trade mission last May. Then in June the Chicago Southland Chamber of Commerce took a nine-day trade mission to Europe. The previous summer, state officials arranged for 32 foreign consuls to take a bus trip to the south suburbs. The state also arranged for some of the 30 foreign trade commissioners stationed in Chicago to take trips to Rockford and Peoria last year.

“The problem with these foreign trade commissioners is that they never leave Chicago,” Harano says. “They don’t know there’s a state beyond Chicago.”

The state’s trips abroad also are about introducing the world to the rest of Illinois. The next opportunity will be the Canadian/International Food and Beverage Show in Toronto February 20-22. 

Seven more trade missions are scheduled for the next five months, including a return to China in May. For that trip the Illinois Trade Office is auditioning companies that can help China address its water treatment needs.

Including Quincy’s trade mission to China and a September trip to Japan, the state will fund 10 trade missions this fiscal year. The trips cost the state about $15,000 to $25,000 for translators, meeting rooms and other legwork-related expenses. Participants pay their travel, lodging and personal expenses. The state’s contribution comes out of the Illinois Trade Office’s annual budget of $4.6 million, which also supports the state’s nine foreign trade offices.

Aside from its pair of offices in China, Illinois maintains outposts in Budapest, Brussels, Johannesburg, Mexico City, Tokyo, Toronto and Warsaw. Illinois had as many as 12 trade offices under former Gov. Thompson, but his fiscally minded successor, Gov. Jim Edgar, cut that number in half. Former Gov. George Ryan was the first U.S. governor to visit Cuba under Fidel Castro’s rule, and Ryan established the state trade office in South Africa. Gov. Blagojevich has not participated in any trade missions since taking office. But, at the same time, Harano says the governor won’t close any of the current trade offices despite the state’s continued budget woes.

In 2003, Illinois ranked seventh among the states in exports, and, Harano says our $26 billion in annual exports support 603,000 Illinois jobs. Foreign subsidiaries account for another 320,000 jobs, and that number will be on its way up if Quincy and its newest sibling have anything to say about it. 

Though the two are some 7,000 miles apart, Quincy hopes its sister city pact with Jiaxing, a port town an hour south of Shanghai, will be a long-distance relationship that builds a bridge toward the two cities’ global economic future. 

 

Pat Guinane can be reached at capitolbureau@aol.com

Illinois Issues, February 2005