By: Linda T. Kennedy Issue: Transformation Section: Community
World Trade Center Utah Ignites Fire to State's Economic Growth
Chinese mythology tells a story about the Dragon's Gate located at the top of a waterfall cascading from a legendary mountain. Every spring, carp swim upstream against the river's strong current and gather in the pool at the foot of the falls to climb the mountain and leap over the waterfall. Few are capable or brave enough for the final leap, but if a carp successfully makes the jump, it is transformed into a powerful dragon. The image of the carp leaping through the Dragon's Gate is a Chinese cultural symbol for courage, perseverance and accomplishment, success through diligence and hard work. In the Year of the Dragon, and in the midst of the fourth U.S. China Strategic and Economic Dialogue in Beijing in May, it could also be a symbol for the United States and its economic potential.
The myriad hurdles that the United States has to overcome with China on key economic issues constantly recirculate in the media. But on a grassroots level, successful trade relationships between state officials and various Chinese provinces are helping the United States gain economic momentum. World Trade Center (WTC) nonprofit organizations, operating under the World Trade Center Association (WTCA), are likely some of the most vital, yet best-kept-secrets, for U.S. businesses seeking lucrative relationships with China and other countries. WTCs symbolize best practices in international trade, operating in conjunction with local trade partners such as Governors Offices of Economic Development and local International Trade and Diplomacy offices. Catching the current of these trade partner's efforts, CEOs navigate the dicey waters of international business regulations and practices. And WTC professionals provide a powerful boost of speed and agility to help them jump the dragon's gate and transform the U.S. economy from carp swimming upstream to the economic dragon it used to be.
Masterful Gate Keepers
If there's a secret formula to achieving President Barack Obama's 2010 National Export Initiative challenge for the United States to double its international exports in five years, Utah has it. Utah exports reached $18.9 billion in commodities last year, a 37 percent increase over 2010's $13.8 billion, according to the International Trade Administration. According to the Utah Governor's Office of Economic Development (GOED), it's the only state in the country to hit at least a 15 percent average annual growth rate to reach Obama's target by the end of 2014. It has also grown its exports faster than any state in the country. In fact, in 2009 Utah was the only state with an export increase, according to GOED.
Additionally, Utah Governor Gary R. Herbert extended his own call to action in his 2011 State of the State address, challenging World Trade Center Utah (WTCU) President and CEO Lew Cramer, and other Utah international business leaders, to double Utah exports in the next five years. Cramer was already on it. Utah's annual average increase in exports since 2010 was 28.5 percent per year, according to the WTCU, illustrating Cramer was well aware of what stands beyond the proverbial international trade threshold.
Cramer was instrumental in bringing the United States into the international trade arena during the Reagan administration when he served as a White House fellow, deputy assistant commerce secretary, and as the assistant secretary of commerce for international trade. Also, during the first Bush administration, Cramer served as director general of the U.S. Commercial Service, directing the activities of 1,400 commercial officers at more than 150 embassies worldwide, as well as in 65 offices throughout the United States. And if you consider that during his many years in Washington, D.C., he also worked with US WEST International in developing major telecommunications projects in more than 30 countries, Cramer knows what an economic dragon looks like. So does former U.S. Ambassador to China and former Utah Governor Jon Huntsman Jr., who brought Cramer from the Hill in 2006 to run WTCU.
“The last three feet between a foreign representative and a local business leader is where international trade agreements happen,” explains Cramer. “You can have all the emails, letters and phone conversations you want, but at the end of the day, you cannot have drive-by shooting relationships in diplomatic relationships. You need the one-on-one visits. It [trade relationships] happens in that face-to-face moment, the exchange of the business card and the welcome hand-shake.”
The WTCU hosts more than a dozen foreign ambassadors and hundreds of visiting dignitaries each year from around the globe. In luncheons and other events, top political figures from other countries meet directly with Utah business and government leaders to discuss opportunities and the next steps toward achieving them. Utah's entire international commerce efforts are conducted in more than 130 languages daily.
“Utah has worked on its international trade and diplomacy efforts for more than 30 years, so we've had some time to fine tune our commerce secret sauce,” explains Spencer Eccles Jr., executive director, GOED. “It's efficiency and effectiveness combined with collaboration and cooperation. Those four items create an equation of e square + c square=global business success. It is the ultimate goal of everything we do at GOED and the WTCU.”
At the Cusp of Transformation
Huntsman's energy for trade with China during his service as Utah governor, something Governor Herbert inherited, goes without saying. Now Greater China is Utah’s second largest export partner, with 2011 exports of more than $5 billion. Since Huntsman's 2006 Utah trade mission to Beijing and Shanghai, total exports from Utah to Greater China have grown by 1,103 percent, according to Brett Heimburger, GOED Asia-Pacific director, International Trade and Diplomacy Department. Top exports include precious metals, electronics and industrial machinery.
But as the United States forges trade with China, not much is said about China's efforts to actually help the United States do it. “As a matter of fact, today's visiting Chinese ambassadors and dignitaries to Utah,” Cramer says, “do not portray the image of a country under tight lock and key, but rather an eager people wanting win-win trade ties that far more resemble neighborly hospitality.”
One of Utah's most successful Chinese relationships is with the Liaoning province, the largest economy of Northeast China. Its nominal GDP for 2011 was 2.20 trillion yuan ($348 billion), 41,782 yuan ($6,172) per capita GDP, making it the seventh largest in China, and among the three provinces of Northeast China, the largest in terms of GDP.
Dr. Taowen Le, professor of information systems technologies at Weber State University and representative of the Liaoning province, saw that with Utah's resources, Liaoning and Utah could be an international trade match made in heaven. Although he has lived in Utah for 28 years, he served as deputy director for IT in the Liaoning state government. That experience led Le to become the perfect warm pass off between Liaoning and Utah at the cusp of business transformation between the two states.
“I was attending an IT-related meeting in Utah; Utah legislators were speakers and that's when the thought came to me… 'Liaoning is pretty strong when it comes to economy—it is surely one of the important provinces in China economy-wise. Likewise, Utah has sustained strong economic growth compared to the rest of the country. So, Utah and Liaoning are doing certain things right, and if they partner with each other, it could only help the economies grow on both sides. Wouldn't it be nice if somehow Utah and Liaoning connected?'”
Numerous conversations and meetings followed between Le and members of the Utah State Legislature, resulting in a Liaoning delegation visit to Utah in 2006 and a Memorandum of Understanding (MOU) for friendly exchange and cooperation between the Utah State Legislature and the Liaoning People's Congress. “The MOU is to promote mutual understanding and business, trade, cultural and education exchanges,” explains Le. “I give credit to both sides—they both had to keep the general benefit of both the state of Utah and the province in mind when seasoning it.”
Le says the win-win agreement will have to be continually nurtured for sustained success. “A framework—a road has been paved for businesses, for people in Utah and Liaoning. Now it's up to us—our business organizations—to take advantage of the road,” he says. “I see great potential, but I still think some people think China is what it was 30 years ago, and literally, that's not true now.”
“Li Yu Tiao Long Men”
From Liaoning's first meeting with Utah six years ago, Cramer says several Utah-grown businesses in apparel, energy, mining and education have export agreements with Liaoning. “Li Yu Tiao Long Men” or "the carp has leaped through the dragon's gate," a popular phrase used in China to observe success, could be an apt nod for both Liaoning and Utah, and it might come from former Standing Vice Chairman of the Liaoning Provincial People's Congress Chairman Yan Feng.
During his service to Liaoning, Yan’s position was almost equal to the Utah house speaker and the Utah senate president combined. In his last visit to Utah in 2010, with a Liaoning delegation composed of dignitaries from the Provincial Department of Foreign Affairs and the Liaoning Provincial People's Congress, he spoke with conviction and assurance about what is going to make the United States the powerful dragon it wants to be, further validating Cramer and Le's visions. “Success comes with understanding and knowledge. We have a saying in China, 'a sincere smile melts away problems.'”
It sounds almost too simple, too easy, to be true—like window dressings fronting a much more complicated shop inside. But Chairman Yan says developing friendships are very critical in China and, “We always receive warmth and sincerity from this legislature here,” he says. “With the friendships we have in Utah, our people have a relaxed environment to conduct business here. It's comfortable to do business here. It's an example of how the more increased your interactions are, the more misunderstandings are cleared, and the better ideas flow.”
Chairman Yan observes that China has 5,000 years of history, and business today in China is still influenced by religions, values, moral implications and cultural traditions. But regardless, Chairman Yan says CEOs in Utah, and the United States, can have success with China by creating five things: “Peace, development, democracy, freedom and happiness.” A willingness to set aside historical philosophical stereotypes about the country and its people and see each other as friends will also create success, he says. “We must trust, understand and tolerate each other to develop harmonious existences, which is accomplished by deepening our mutual understandings of one another.”
Now, a solid relationship with the Liaoning province is part of Utah's successful international trade heritage, and a model to forge successful ties with the entire country. In May, the WTCU hosted Donald Tong, Hong Kong commissioner at Hong Kong Economic and Trade Office, San Francisco. Also, the WTCU's recent “Doing Business with China” conference at Utah Valley University gave business leaders opportunities to talk to leaders from both the United States and China. The conference also provided business managers from Utah networking opportunities with officials from the China Council for the Promotion of International Trade (CCPIT), the largest institution for the promotion of foreign trade in China.
Finally, this summer, Utah cuts the ribbon on its Chinese Heritage Friendship Gate at the Utah Cultural Celebration Center in West Valley City. Besides being a symbol of the friendship between West Valley City and the local Chinese Community, Cramer says it could also be a metaphorical invitation for Utah to continue “jumping the gate” to economic, cultural and social prosperity.
“In Utah, we are an interconnected economy,” explains Cramer. “Governor Herbert's motto is 'unprecedented partnerships create success.' WTCU is joined at the hip with GOED, and our other partners. But my mission is to motivate Utahans to put their product out into the global marketplace, and we have a real bias toward action. So, we think we do a good job of making business leaders aware of the opportunities they have and connecting them to the right person to help them make those happen. That's the catalyst we use to get them where they need to go.”