Texas wants to continue trade with China, say experts
While US-China trade tensions continue to escalate at the federal level, some experts and business leaders in Texas voiced the state’s desire to continue its trade relationship with China.
The US-China trade war became a focus of “Chinese Investment in the US: The Path Forward”, a conference hosted by the China General Chamber of Commerce-USA (CGCC), which gathered experts, business leaders and government officials in Houston on Wednesday.
“We can spend an entire day debating the facts and analysis of how we got here today,” said Xu Chen, president and CEO of Bank of China USA and the chairman of the CGCC during an opening speech. “The fact remains though that US exports of goods to China have grown by 86 percent over the last decade, while exports to the rest of the world grew by only 21 percent.”
The CGCC aims to enhance cooperation through dialog and discussion between the US and Chinese business communities. It serves 1,500 Chinese member companies that have collectively invested over $120 billion and employ more than 200,000 people throughout the US, including Texas.
The state is also the secondlargest in the US. The top commodities that it exports include petroleum and coal products, chemicals, computers and electronic products, machinery and medical devices.
The US Chamber of Commerce estimated that trade supports more than 3 million jobs in Texas. Around $5.4 billion in exports from Texas to China are targeted for retaliation. Its hardest hit industries would be liquefied propane, grain sorghum and cotton.
According to Bob Harvey, president and CEO of the Greater Houston Partnership, an economic development organization that represents more than 1,200 member companies in the 11-county Houston region, China is Houston’s second-biggest and fastest growing trading partner.
“We have been concerned by the climate of the current trade dispute with China,” Harvey said. “It has the potential to very negatively impact the Houston economy, and even impact our long-term future.”
Although the impact from the tariff isn’t immediately available in terms of trade data, Harvey warned that the toxic business environment generated by the trade disputes could stall business deals.
“What we worry about are the negotiations that were underway to do major deals,” Harvey said, “the deals that have not yet been completed, that can’t be completed in this environment”.
Dexter Burleigh, president and CEO of Surge Energy, a US subsidiary of Shandong Xinchao Energy Corp in Texas, echoed that sentiment.
“I think from our perspective, the concern is more on the greater and broader impact on the relationship between the two countries and how that could bleed over into a more contentious business environment,” Burleigh said.
The Trump administration imposed tariffs on $50 billion of Chinese imports, to which China has responded in kind.
The US then followed with the announcement of the imposition of 10 to 25 percent tariffs on $200 billion of Chinese goods, which included items such as seafood, furniture and bicycles. In response, China threatened to put duties on $60 billion of US imports.
Despite the months-long trade standoff, some local officials said they value a good relationship between the US and China.
Judge Bob Herbert of Fort Bend County, another speaker at the conference, welcomed the investment of Chinese businesses in his district.
“We have a very large Asian population, and a significant percentage of that population has its roots in China. We see that as a bless- ing,” Herbert said.
Fort Bend County, located in the Houston metropolitan area of southeastern Texas, was the fastest growing large county in the US from 2013-16. According to the US Census Bureau, it had a population of 764,828 people in 2017, and 20.4 percent was Asian.
“I assure you that our relationships with China on the business, culture and education bases will continue to grow,” Herbert told the audience. “We hope the communities prosper in the future.”
Burleigh said investors in China and the US strive for the same goal ultimately, and that is they all work to make returns to their investors.