Chinese business: How Utah is embracing the dragon
Beehive State's exports to China Grew by 184 percent in 2011
Michael De Groote, Deseret News
Click here to take a closer look at how the Beehive State is embracing the dragon.
NORTH SALT LAKE, Utah — When Utah Gov. Gary Herbert visited senior officials in China last April, he didn't bring the standard diplomatic gifts. He brought something better: four basketballs signed by the Utah Jazz team.
"They loved them," said Lew Cramer — president and CEO at World Trade Center Utah. "You could have offered them a million dollars and it wouldn't have had as much impact as a signed Utah Jazz basketball."
Chinese officials, and apparently many Chinese, love the NBA. Who knew?
And they love American business as well. And if the 2011 trade numbers that came out on Feb. 10 are any indication, the Chinese are not just up on the Utah Jazz, but on Utah products and businesses as well.
In 2011, Utah's exports to China totaled $4.3 billion, the U.S. Census and World Trade Center Utah reported. That is a lot of money when you consider the state has only about 3 million people. It is about $1,535 per Utahn. Utah's exports to all countries around the world equals $18.9 billion.
So while some political voices are pushing Chinese business away, Utah is showing how a different attitude can pay huge dividends for building a state's economy.
Jonathan Huneke is the vice president of communications for the U.S. Council for International Business based in New York. He said China is the second largest economy in the world and may become the largest economy in the world. "It is growing like gangbusters," he said. "For American business — and business around the world — China is not only an enormous manufacturing center, but a huge market to sell your goods in."
For example, Huneke said, China has about 300 cities with populations of more than 1 million people each. There are 52 cities with more than 10 million people.
"It is almost unfathomable," he said. "And they are all urban centers that are fast growing."
For K.C. Ericksen, CEO of Orbit Irrigation Products Inc. in North Salt Lake, the attitude is bluntly economic.
"There are certain products you can't economically build in the United States," Ericksen said. "What we can do here, we do here."
Orbit was incorporated in 1986 but has its roots in Ericksen's father's company that installed irrigation systems in the 1950s and moved to distribution in the early 1980s.
Orbit began manufacturing products in Taiwan and then moved into China. Ericksen said they use China to build products that take a lot of labor to construct.
And things made out of metal.
Primarily, Orbit uses China to manufacture items made in metals such as brass. "We can manufacture almost anything here in the United States — but metal products and other items that can't be automated cost too much to make here," Ericksen said.
In one of Orbit's assembly plants in North Salt Lake, Ericksen walked to a station where a sprinkler was being assembled. He picked up the inside of a sprinkler — featuring a brass head — in one hand,
"This was made in China." Then he grabbed the outer plastic housing with his other hand, "And this was made next door." Behind him, two workers were assembling the parts together.
It was the perfect symbol of how an American business was using global economics to create local jobs and wealth.
Orbit employs 464 Utahns and can make injected plastic parts and assemble things locally. But brass, zinc and other metal items are "almost impossible" to make domestically without the price going up "tremendously," Ericksen said.