Montana World Trade Center director seeks China connection

It is a country where 250 of its cities have populations larger than the entire state of Montana.

China’s 1.3 billion people are a pretty hefty share of any market or labor force, and Montanans should not ignore them, says the executive director of the Montana World Trade Center http://mwtc.org/ .

By VINCE DEVLIN of the Missoulian

http://missoulian.com/articles/2004/03/28/news/local/news03.txt

Arnold E. Sherman, who recently traveled to China with a delegation headed by U.S. Sen. Max Baucus, D-Mont., called the changes taking place in the communist country "staggering."

"Last time I was there seven years ago, there were just a handful of buildings over 18 stories tall," he said. "Now there are 2,500 of them, and permits issued for 2,500 more."

Starbucks shops are plentiful, and Chinese people are talking on cell phones, driving new cars and eating in expensive restaurants. Billboards depicting Chairman Mao Tse-tung have been replaced by billboards celebrating center Yao Ming of the Houston Rockets.

"It’s an important transition," Sherman said. "The success symbol for the Chinese is no longer the head of the Communist Party. It’s a basketball star with a Nike contract who’s rich and made it in the United States. Capitalism is replacing communism."

It’s a huge potential market for Montana beef and grain, and selling the Chinese on that was one of the primary purposes for Baucus during the weeklong visit to Shanghai and Beijing, Sherman said.

But there were other goals, too. Great Falls, Sherman said, is looking at an airport where international freight can clear customs more quickly than it does at larger airports, so it sent an official to discuss routing Chinese cargo flights to Montana.

Sherman’s goal was to establish relationships in China that can help him serve clients of the Montana World Trade Center, a nonprofit organization affiliated with the University of Montana that "develops untapped international trade opportunities and helps businesses capitalize on opportunities to expand their market share around the world."

It’s not just about exporting to China.

Sherman used Technical Sourcing International, a company with offices in Missoula, as an example.

TSI, a researcher, producer and marketer of nutraceutical ingredients to the dietary supplement, pharmaceutical and food and beverage industries, just moved into a new building in Missoula, where it employs about 40 people.

TSI also employs 500 people at five manufacturing facilities in China, where its raw materials are shipped to be refined.

"I know outsourcing can be a dirty word," Sherman said. "But the reality is, to be competitive, things have to be produced cheaply. Their competitors do it, they have to, too. The fact is TSI couldn’t have 40 jobs here if it didn’t have 500 there. And the 40 in Montana make more than all 500 combined in China. If the business grows, it means more jobs here, and more in China."

Companies that originally outsourced jobs to China are now recognizing the market potential as well, Sherman said. Pfizer, a pharmaceutical company, now sells popular drugs such as Viagra and Lipitor in China.

"There are a billion people in China who can’t afford them," Sherman admitted. "But even if only 10 percent of the population can, that’s still 130 million people, and that’s a big market."

China is not without its problems, Sherman noted. There are questions of human rights violations. Some 150 million farmers are out of work. There are major problems with piracy and copyright violations.

"You can walk down the street in Beijing and buy a high-quality DVD of ‘The Passion of the Christ’ for a dollar," Sherman said. "See this watch?" he asked, unstrapping the timepiece on his arm. "It’s the kind Gov. Schwarzenegger wears, a Panerai, costs $5,000. I bought this for $12 on the street there."

China’s exports have given the country a large currency reserve of hundreds of billions of dollars. Beijing alone will spend $30 billion on the 2008 Olympics, where plans include a log home village for athletes.

"There are opportunities for Montana companies in China," Sherman said. "I think there’s a huge opportunity for Montana environmental companies."

And the Chinese work force is highly skilled, highly motivated, well-educated – and there’s a never-ending supply, Sherman said.

"If I were 20 years younger I’d be learning Chinese," he said. "Their (gross national product) matches Italy, and by 2008 will equal Germany. They’ve had 8 percent or better economic growth every year since 1979. They are investing hundreds of billions in their infrastructure, and by 2014 it is estimated that half the world’s goods will be manufactured in China."

Is that good news, or bad?

"It is cause for worry," Sherman said. "But the Chinese character for danger also means opportunity. I believe the more countries trade, the more they share, the less likely they are to be at odds with each other, to be at war with each other. China can be an ally, a friend."

Reporter Vince Devlin can be reached at 523-5260 or at [email protected]