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Schwarzenegger’s China trip acknowledges the fierce competition looming for California business along Pacific Rim

In the days of California’s Gold Rush, it took clipper ships weeks to sail
from San Francisco to Hong Kong. In the late 1930’s Pan American Airlines
flying boats known as “China Clippers” made the trip in less than a week.
Today you can make the trip in a 747 in about 15 hours.

As China draws closer, it’s importance to California increases. For Gov.
Arnold Schwarzenegger, this was a trip well worth making.

The last time I was in Hong Kong was 10 years ago when it was still a
British Crown colony. When the Union Jack was lowered for the last time in
January 1997, a new era dawned for China as it reclaimed the last possession
that it was forced to cede to the British Empire in 1842.

In 1995, the city had many new buildings and was still growing but the pace
of growth appeared slow but steady. The old Kai Tak airport where I arrived
back then was old and it was right in the center of the Kowloon part of Hong
Kong. When the plane descended you flew right past large apartment buildings
and looking out the airplane window you could see people having dinner in
their homes.

Today you enter Hong Kong via one of the most modern airports in the world.
Built on a man made island jutting out from Lantau Island into the South
China Sea, it has already reached capacity and there are plans to expand it.

Through this portal you take a step into the future. Not just China’s but
the world’s future. The 45 minute drive into the city on a brand new modern
expressway takes you past massive new building projects. New office
buildings, apartments, condominiums have sprouted everywhere and the skyline
seems to have a small forest of construction cranes. An engineer on our
flight told us that about 25 percent of the world’s construction cranes are
in Beijing, Shanghai, and Hong Kong.

China is America’s main rival now economically. This represents both new
challenges and opportunities for the United States.

Understanding China is of paramount importance for America’s leaders at all
levels of government. That is why Governor Schwarzenegger’s mission to China
is extremely important for California’s future.

China and California share a rich history. In the Gold Rush years, China’s
main export to California was human beings in the form of unskilled labor
that helped build the Transcontinental Railroad. Today, she exports billions
of dollars of manufactured goods Californians pull off the shelves at their
local Wal-Mart. The constant, 24/7 container ship traffic in Hong Kong and
Shanghai harbors bears witness to this fact.

Our geographic position along the Pacific Rim makes us well suited to be one
of China’s key trading partners. Most of China’s exports flow through our
ports to the rest of the country. The Governor recognizes the importance of
this by his ongoing efforts to improve goods movement through our ports.

Among the many issues that Governor Schwarzenegger will discuss on his
mission to China will be California agricultural exports. Today China ranks
fifth behind the EU, Canada, Japan and Mexico in agricultural exports from
California. In 2004 that accounted for $456 million in revenue for
California’s agriculture industry.

While the United States struggles with a skyrocketing overall trade deficit
with China, there is none with regards to agriculture. In fact there is a
$4.5 billion surplus in agricultural exports which is very important for
California, because this would indicate a growth potential for California
agribusiness.

But there are other issues that raise concerns. Chinese customs and
quarantine practices can delay or halt agricultural shipments and their
regulatory practices can be confusing at best frustrating the agricultural
industry. These need to be addressed if California is to increase its share
of trade with China.

Ultimately, it is the federal government that has responsibility for
negotiating trade issues and it must take the lead in opening new markets
for our products. But trips like this are vital because they demonstrate
that whatever our internal political differences are, we are united in our
efforts to increase global trade, particularly with China.

It has been said that the 21st Century will be the Pacific Century,
dominated by the nations of the Pacific Rim, with China leading the way.
Having seen it first hand we should all be prepared for some tough
competition.


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