Chinese diplomat seeks greater trade with Kansas

? A senior Chinese diplomat on Tuesday encouraged greater efforts to boost trade between his nation and Kansas and the United States.

Speaking at a luncheon with state and local officials, Ambassador Yang Jiechi said China was interested in expanding trade with Kansas, particularly in agricultural products and aircraft.

“No Boeing, no going,” Yang said, referring to the Chicago-based aircraft manufacturer which employs about 12,000 workers at its Wichita plant. Sixty-five percent of China’s commercial aircraft fleet is made by Boeing.

According to the Kansas Department of Commerce, China was the state’s seventh-largest trading partner last year, importing $176 million in goods. Most of the trade — $96 million worth — was in processed food.

Gov. Kathleen Sebelius, who met with Yang at the Statehouse, said her discussion with the ambassador “was positive and that he was very pleased to see firsthand the products he enjoys at home.”

The Chinese ambassador’s appearance in Kansas was arranged by Steven Douglass, chairman and chief executive officer of Topeka-based Payless ShoeSource Inc. The company imports about 91 percent of its footwear from China. Payless has 5,000 stores and about 30,000 employees.

Yang said Payless was an example of the 40,000 foreign companies doing business in China. He added that 60 percent of the world’s footwear is made in China.

“I don’t know how many pieces of apparel we have to export to buy a Boeing aircraft,” Yang said.

China is negotiating with Boeing for additional aircraft purchases, the ambassador said, and additional sales of corporate jets are expected in the future as China’s business leaders look for a means to travel quickly and efficiently.

In addition to Boeing, Wichita is home to Raytheon Co., Cessna Aircraft Co. and Bombardier Inc. plants that manufacture business jets.

“Truly, there is an opportunity for the state of Kansas to learn how to do a better job of trading with China,” said Lt. Gov. John Moore, who also serves as commerce secretary.

Yang said his nation was interested in importing more Kansas agriculture products, including soybeans, wheat and cattle, as it looked to purchase more goods from the United States.

China also could benefit from the import of U.S. high-tech goods, though he understands the reluctance of the U.S. government to open the market.

“We need to adopt a broad vision. We are aware of the trade imbalance,” Yang said.

The trade deficit with China last year reached $124 billion, the largest gap the United States has ever recorded with any nation. The weak Chinese currency, the yuan, has made Chinese products cheaper and American products more expensive.

Last week, the United States and China resolved an issue over the sale of semiconductors to China. China agreed to phase out tax preferences for Chinese makers of semiconductors that put U.S. manufacturers at a competitive disadvantage.

China imported $2.02 billion in U.S.-built semiconductors in 2003, but those imports were subjected to a 17 percent tax, costing about $344 million. China allowed its domestic producers to receive a partial refund of the tax.

Under the agreement, China will not provide the refunds for new semiconductor products or manufacturers. By April, it will drop existing tax preferences.

Yang said as China’s gross domestic product increases, the value of its currency would help resolve many trade issues with the United States.