China's impact on N.C. trade won't be dramatic.

• Position: Brief Article

Michael Lord is an assistant professor of management at Wake Forest University's Babcock Graduate School of Management. A frequent visitor to China, he recently led a group of MBA students on a tour of factories -- both American- and Chinese-owned -- in Beijing, Shanghai and rural provinces.

BNC: What impact will Chinese trade have on North Carolina's furniture industry?

Lord: I don't think it's going to have an immediate, dramatic impact on any of North Carolina's industries. A lot of people have overinterpreted the importance of China's entry into the World Trade Organization and the agreements signed with the U.S. and Europe. I think it's going to be a continual, incremental opening of trade and investment over years. More North Carolina companies will contract Chinese companies to manufacture lower-end furniture. It's a popular product with [Chinese] consumers but complicated to buy because transportation costs are an obstacle. Interestingly, there's a new market for high-end furniture made in North Carolina. There's a growing Chinese upper-middle class that has a lot of disposable income. For them, North Carolina furniture products have a cachet.

Will outsourcing mean job losses for North Carolina furniture workers?

It's a major misperception American workers have, that there's going to be a sudden change in jobs lost or generated. Any impact will take three to five years to be felt. I haven't seen any studies of job loss vs. job gain due to China trade. And I wouldn't believe them if I had, It's all speculation. But the fears of American manufacturing and textile workers were borne out -- plants have been relocating to Mexico and the Caribbean in the wake of NAFTA.

What eventual impact do you see on tobacco and textiles?

I don't think it's going to have much impact on tobacco. The China market is highly controlled and regulated by state agencies. Any sales by U.S. tobacco companies are going to have lots of restrictions and tariffs. Cigarette production and sales are a huge source of cash for the government. However, there's not nearly so much of a threat to sales from health regulations or strict rules about selling to minors. There is a market in China for high-tech textiles used in awnings, ships' sails, fibers that need to be waterproof, burn-resistant, super strong. China won't have a huge impact on textile production or jobs here. Textile companies that want cheap labor prefer to stay closer to home in Mexico or the Caribbean.

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