China's role in Alaska's economy: Decade of the Dragon setting records.

• Author: Wolf, Greg
• Position: SPECIAL SECTION: International Trade

For more than a decade, the headline story for Alaska's export industries has been the rise of China as a burgeoning market for the state's vast natural resources. The Middle Kingdom is now Alaska's largest overseas customer and all indications point to this continuing for the foreseeable future. Beyond just exports, China is also playing an important role elsewhere in the Alaska economy in a variety of areas including air cargo, tourism, and investment.

Shipments to China account for nearly 30 percent of the state's total overseas exports. The growth of these exports has been unprecedented, rising from approximately $100 million in 2000 to a record $1.4 billion in 2011, in what has been dubbed The Dragon Decade. During the first nine months of 2014, exports from Alaska to China totaled $1.3 billion. When the final numbers for the year are counted, 2014 will, in all likelihood, set a new record or register as the second highest year to date.

Top Export Commodities

At almost 55 percent of the total, seafood is the state's major export commodity to China, and China is the state's largest export market for seafood. The ongoing growth in seafood shipments to the country can be attributed to both China's role as a major reprocessing center (for re-export to other countries, including the United States) as well as growing domestic consumption by an increasingly affluent consumer class.

According to a recent report by the Alaska Seafood Marketing Institute, fresh and chilled seafood has been preferred by consumers; however, frozen forms are becoming popular, as well. They note also that E-commerce has boosted domestic sales of seafood in China, appealing to a younger generation of customers. Alaska's ground fish, such as cod and pollock, along with salmon, are the major export species to China. The report also notes that while Chinese consumers recognize products such as king crab, black cod, and yellow fin sole as high-end and healthy, lesser known products like sockeye salmon, pacific cod, and pollock roe are gaining increased attention from consumers.

Mineral ores, primarily lead and zinc, are the second largest export commodity at 35 percent of Alaska's exports to China. Forest products, mainly consisting of whole round logs, followed by fish meal are the other two primary export categories at 6 percent and 4 percent, respectively.

As large and important of a customer as China is now for Alaska, there are ample reasons to believe that further...