Skvarla calls for more than lip service during his China trip

N.C. Commerce Secretary John Skvarla

N.C. Commerce Secretary John Skvarla

RALEIGH – N.C. Commerce Secretary John Skvarla called for action, not just lip service, as he joined U.S. lawmakers on an economic development trip to China. Skvarla was there for eight days, returning last week. He said his goal was to make sure the Chinese and U.S. officials on the trip know that North Carolina is the best place to invest some of the money China has made off of sales to the United States. According to Skvarla, the U.S. and North Carolina does have a market edge that China needs.

“The United States is still the safest place to invest. We are competitive because we have cheap energy and a skilled workforce. From a commerce perspective we need to do everything we can to cultivate that cheap energy,” he said. “The trillions sitting in their banks are ours. It’s a global economy out there, but the money has to go in both directions.”

While the U.S. Gross Domestic Product is still considerably higher, China’s economy had been growing exponentially for 15 years. But it’s growth numbers dropped recently, triggering concerns over the global impact of an economic slowdown in China. The Chinese government is spending trillions to build high-tech plants and cities in an effort to draw large manufacturing companies. They’re hoping to jumpstart the economy’s transition from a farming base to a manufacturing base. With more than 1.4 billion people, 400 million are still farmers. However, many of the cities and plants are empty because the cost of energy is so high. Estimates are that China opens a new coal-fired power plant every two weeks.

Baosteel coal offloading in 2013; Baoshan, Shanghai, China. Image credit: Blake Thornberry.

Baosteel coal offloading in 2013; Baoshan, Shanghai, China. Image credit: Blake Thornberry.

 

“The transition hasn’t happened as fast as they’d like. They have major infrastructure problems. They need our expertise in those areas and this opens up opportunities for our environmental and energy industry,” said Skvarla. “They are doing a brilliant job with aesthetics, but then you got out to the rural areas and its completely feudal with no mechanized equipment because it would put people out of work. People are using hoes to tend fields.”

Chinese companies recently did put some investment dollars in North Carolina. Two years ago, China’s Shuanghui International Holdings Ltd. bought Virgina-based Smithfield Foods in the controversial and largest takeover of a U.S. company by a Chinese firm. More than 10,000 North Carolinians are employed at Smithfield’s largest plant in Bladen County, N.C. Also, Lenovo purchased IBM’s Research Triangle Park-based PC business in 2005. Lenovo is a $46 billion global Fortune 500 company and employs more than 2,000 people in North Carolina. Skvarla says that these could be just the beginning if he can build a commerce department team to make key deals, but says putting that team together requires investment from the state. On this economic trip, funded in part by the nonprofit Carolinas Chinese Chamber of Commerce, Skvarla said that he wants to “do, not talk.”

“You can have all the yik yak in the world, but you have act to make this happen,” he said. “We have to get their markets open to us in order to create a more robust two-way street.  Nothing works if its a one-sided deal…  I need personnel in my office to cultivate, manage and grow a clearinghouse where investors can come and know that we are legit, honest and ready to go.”

Some N.C. lawmakers have indicated that they are willing to consider putting more money in the budget next year for the commerce department to use for economic development efforts. North Carolina’s unemployment is currently at 5.8 percent, down from a high of 11 percent in 2010.

 

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