China: rising dragon, expanding exports for Alaska.

• Author: Wolf, Greg

Across the Pacific, China, the long slumbering big dragon of Asia, has awoken. The country's economic liberalization and expansion that commenced 20 years ago is now steaming ahead at a torrid pace. China accession to the World Trade Organization in 2001 has paved the way for even greater integration of China's economy with the rest of the world. For Alaska, China's growth and modernization represents the next best opportunity to expand exports of the state's natural resources and technical services.

Alaska has a proven track record of successfully getting into emerging markets early and then benefiting from the subsequent rise of those economies as they grow into developed markets. For example, when the state opened its trade office in Japan in 1965, Alaska's exports to that country were $30 million. Today, the state exports more than $1 billion of goods to Japan and at one point during the country's boom years in the 1980s, exports exceeded $2 billion.

In Korea, the story has been the same. In 1985, when the state opened its trade office in Seoul, exports amounted to $85 million. Two years ago, Alaska's exports to Korea reached $463 million, a five-fold increase.

In 2001, China was ranked as Alaska's fifth-largest trading partner. Exports to China, primarily seafood, totaled $110 million that year. Other Alaska exports to China include fish waste (used for animal feed and aqua-culture), petroleum products and wood.

This level we consider as the "starting gate" and moving forward this number should steadily increase in concert with the growth of China's economy. Analysts project China's gross domestic product to grow 7 percent to 8 percent annually for the foreseeable future. Indeed, many anticipate that China will surpass Japan as the world's second-largest economy sometime within the next 10 to 15 years. In 2002, during the first nine months, Alaska's exports to China rose 51 percent from the previous year.

In 2000, Gov. Tony Knowles led a group of business and government leaders on a trade mission to China. Twenty business leaders accompanied the governor and the mission focused on several promising export sectors, including energy, seafood, environmental engineering and oil and gas support services. The mission members returned to Alaska with a much better understanding of opportunities for Alaska companies to do business in China. They also encouraged the...