Iowa business leaders say high-level Chinese visits this week could lead to more open discussions about trade and some of the hurdles that hamper it.
A whirlwind of meetings this week between business leaders and Vice President Xi Jinping and Hebei province officials is already creating business for the state. Chinese leaders signed agreements to buy $4.3 billion in U.S. soybeans, and Pioneer Hi-Bred announced that it will build a seed technology hub in Beijing this year.
Xi, who left Iowa Thursday, has invited Gov. Terry Branstad to return to China.
Debi Durham, the state?s economic development leader, said Xi?s mention of Pioneer and Principal Financial Group during his toast at a state dinner Wednesday night has sparked optimism that China will open new markets to Iowa companies, especially involving bioscience and financial services.
?When you have that level of attention, you can anticipate an intense increase in activity and increased efforts around trade,? said Durham.
Here are some observations from Iowa business leaders about this week?s visit:
William Niebur, who leads Pioneer?s China operations, said CEO Paul Schickler ?discussed key issues that we?re working on collectively,? including the adoption of genetically modified corn in China, during a private reception for Xi with Iowa leaders.
China now uses biotech cotton but so far has not adopted the use of biotechnology to grow corn, soybeans and other crops. The use of biotech helps plants better resist pests and disease and has been credited with rapidly ramping up U.S. crop yields.
Squeezing more crops out of China?s relatively limited farm-able acres is key to providing China?s rising middle class with food and feed for animals, say experts.
?The questions on biotechnology are complex and challenging, and the opinions are diverse,? said Niebur, a vice president at Des Moines-based Pioneer, one of the world?s largest seed companies. ?The dialogue is shifting, and there?s a greater realization of the imminent need and opportunity for biotechnology.?
Xi?s developing relationship with Iowa ?will provide him with the insights and enlightenment required to support his government as it moves to a biotech-based agriculture,? said Niebur.
Larry Zimpleman, chief executive of Principal Financial, said he talked with Xi about his company?s interest in entering China?s developing retirement market. The group now provides mutual fund investments with its partner, the China Construction Bank.
The partners? request to provide retirement products has been ?stuck, but we?re not exactly sure where,? Zimpleman said. He hopes the meeting with Xi will move regulators? approval along.
He said Xi?s visit is ?clearly a big, big positive? for Iowa and its businesses. ?Any business located in Iowa that goes to China will get a much more receptive audience. No question about it,? Zimpleman said.
Durham, the state?s economic development leader, said Xi?s visit and his growing friendship with Branstad will enable Iowa to expand markets, not only for farm products, but for Iowa financial services companies, biosciences and manufacturers ? from food processors to makers of wind turbines and towers.
?We obviously have a very strong partnership around trade when it comes to agriculture. But when the vice president names Principal from the podium, my hope is that the financial services market will open up to us,? Durham said.
Durham said Iowa opportunities will include increased exports to China, partnerships with Iowa companies and direct foreign investment in Iowa. ?The more those trade opportunities open up with China, the more jobs it supports in the state of Iowa,? she said. ?That?s the win-win from these trade agreements.?
R.W. Nelson, co-founder of Kemin Industries with his wife, Mary, said he hopes his visit with Hebei delegates earlier this week will help improve that company?s product registration in China.
?China has been a very good market, and it could be really be beneficial for us,? said Nelson, whose company makes human and animal nutrients. The company?s Chinese plant employs 150 and serves Kemin?s Asian market.
?We get a lot of ?yes, yes, yes,? but we?ll have to wait and see,? he said.
Mary Andringa, CEO of Vermeer, the Pella maker of farm, construction and mining equipment, said the visit gives the United States a good foundation to have difficult discussion about issues like currency and ?indigenous innovation,? guidelines China set to reduce dependence on foreign technology.
She has said relaxing restrictions on U.S. technology could help Iowa companies that have developed sophisticated farm equipment and products. ?We?ll always have issues to work through, but this is a positive place where we can build cooperation,? said Andringa, whose company has had a factory in China for five years.
Jay Byers, chief executive of the Greater Des Moines Partnership, a regional economic development group, said Xi?s visit showcases the state and its businesses.
He said Xi?s visit opens the door for ?reverse investment? in Iowa from Chinese companies looking to build factories, open distribution centers or launch other U.S. operations.
?We?re making those connections with a variety of folks who have been able to see what Des Moines and Iowa is like first- hand,? said Byers. ?We think we?re on a radar that we had not been on before.?
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