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Richmond Times-Dispatch, Va., John Reid Blackwell Column

Posted on: Monday, 13 March 2006, 18:00 CST

By John Reid Blackwell, Richmond Times-Dispatch, Va.

Mar. 13--China and the Middle East are, arguably, the two most controversial business markets in the world.

For evidence of how dicey business deals with Middle Eastern countries can be in an age of terrorism, look at the recent furor over the proposed transfer of management at some U.S. ports to a Dubai-based company.

Americans seem to have a love-hate relationship with China, whose 1.3 billion people are both an enormous market for U.S. goods and a huge labor pool competing with American workers.

Are we focusing too much on the threats and not enough on the opportunities in these markets? Two visitors to Richmond last week made the case that the positives outweigh the negatives.

At separate meetings in Richmond, the business and academic community heard from Jiansheng Wu, a Chinese diplomat to the United States, and Douglas Wallace, a U.S. diplomat to Israel.

China's mushrooming economy has benefited the United States, said Wu, the secretary for economic affairs at the Chinese Embassy in Washington.

"For a long time, Chinese exports to the U.S. have promoted China's development on the one hand, and on the other hand satisfied U.S. market demand and saved money for ordinary American people," Wu told guests at a luncheon hosted by the Asian-American Business Assistance Center.

Citing a report by Morgan Stanley, Wu said products made in China have saved U.S. consumers more than $600 billion since 1995. "At the same time, U.S. companies also reaped handsome profit in their trade with China," he said.

Wu said U.S. business investment is a key part of China's plan to build a "well-off society" by 2020. Its enormous annual GDP growth of 9.6 percent -- which he assured the audience was a "real number" and not an overestimate -- can be sustained for at least 10 to 15 years, he said, but the country will need to maintain "political and social stability."

Wu acknowledged there are problems. For one, foreign investors are concerned about copyright infringement and other intellectual property theft in China. Wu said the government is taking steps to fight that. He also acknowledged concerns about the United States' enormous trade deficit with China. "To solve these problems, the two sides need to resort to consultation and intensified cooperation," he said.

The Middle East has problems, too, but not as bad as media coverage leads us to believe, said Wallace, a U.S. commercial attache to Israel.

Speaking at the U.S. Small Business Administration office in Richmond, Wallace said he wanted to dispel the "CNN imagery" of a Middle East plagued by violence.

"Yes, there are places like Gaza. Yes, there are places like Iraq," Wallace said. "But there are also markets that are stable, growing, pro-American and that represent huge markets for American businesses."

Wallace cited Israel, Qatar and Saudi Arabia as examples. U.S. companies have major opportunities in Israel, he said, to sell products including electrical and telecommunications equipment, medical supplies, industrial chemicals and software.

"The problem we have is that a lot of companies think Israel is in a constant state of war," he said. "That is not the case. It is a stable country and growing economically."

Wallace's talk attracted representatives from several Virginia businesses interested in the Middle East. Frederick Emch is international sales manager for MicroAire Surgical Instruments, a Charlottesville company that sells medical equipment in 70 countries.

"We certainly see the Middle East as a fast-growing market," Emch said. "[Middle Eastern] governments have a lot of money, and they are building hospitals. The public is becoming more aware through the Internet and other communications that there are a lot of options for medical procedures."

The Middle East is also a target market for Taylor-Ramsey Corp., a Lynchburg-based lumber and wood products company, said Mike Cooper, the company's China and East Asia sales manager.

"It's a very small percentage of our [international] sales right now," he said. "It's no more than 7 percent, but we would like to get that up to 12 percent in the next few years."

Contact staff writer John Reid Blackwell at jblackwell@timesdispatch.com or (804) 775-8123.

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Copyright (c) 2006, Richmond Times-Dispatch, Va.

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Source: Richmond Times-Dispatch

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