By Carol Cain
CBS 62 Senior Producer and Host “Michigan Matters”
The state of Michigan is seeking 100 companies whose owners have been thinking about selling products in China to be part of a first-in-the-nation pilot program intended to boost exports there. Called Export Now, the $100,000 program came about as a result of Gov. Rick Snyder’s trade mission to Asia last fall.
With one-fifth of the world’s population, 1.3 billion people, China is the holy grail with its huge and growing middle class and disposable income for things like cars, blue jeans, appliances and even agriculture. The export program – which is about growing businesses — stands out given Michigan’s earlier approach when former Gov. Jennifer Granholm refused to visit the nation. At the same time states like Ohio, Illinois, New York and California aggressively reached out with their governors in tow.
The communist nation is one where having high-ranking politicians on trade missions is mandatory. Snyder, a former CEO, understood that which is why he included China in his inaugural trade mission last year. The governor also went further when he traveled to Iowa in February to meet China’s Vice President Xi Jinping, who is expected to take over as that country’s next president. “It’s all about creating jobs for Michigan families and bright futures for our kids,” Snyder has said.
Michigan is one of 30 states that counts China as one of its top three export markets. Michigan exported $2.2 billion worth of goods to the country in 2010. By dangling a carrot the state is hoping to inspire more firms to consider exporting. “We’re the first state in the country to be doing this,” Michigan Economic Development Corporation (MEDC) Senior Vice President Doug Smith said during taping of “Michigan Matters.” “From our standpoint, it’s an exciting way to test the Chinese market,” Smith added. “With currency exchange and other costs, you will never be able to get into the Chinese market any cheaper than this.”
MEDC will hold informational meetings around the state to educate companies on the effort. The program came to Michigan’s attention during Snyder’s trade mission where he and MEDC officials met Frank Lavin, who started Export Now. Lavin, former U.S. Department of Commerce Undersecretary for International Trade and former Ambassador to Singapore, began the exchange to assist American companies in getting products before Chinese consumers. It was a chance meeting in Shanghai when Lavin and Sandy Baruah, president and CEO of the Detroit Regional Chamber who traveled with Snyder, bumped into each other. They had worked at the U.S. Commerce Department under former President George W. Bush.
Lavin also talked with Mike Finney, president and CEO of MEDC. “This led to discussions how to help Michigan companies export, and here we are,” Lavin said. The Chinese export program will cost a company $1,000 for a pallet (which is nine cubic feet) that will contain as much product as can fit. MEDC and Lavin are picking up the rest of the costs (it is usually $3,000). The seller sends the pallet to Long Beach, Calif. and Export Works handles shipping, customs, labeling and marketing. Larson works with TMall.com – the business to consumer internet exchange in China which has 150 million consumers. “This opens doors to an overseas market place that might otherwise be prohibitive to smaller Michigan exporters or companies that have been limited to a brick and mortar distribution outlet in China,” Smith added. “It’s similar to Amazon.com.”
Lavin also works with the U.S. Commerce Department. “We have a number of companies on board, but Michigan is the first to sign up at the state level,” Lavin said.
Long time China experts are applauding the effort. Tom Watkins, Michigan’s former state superintendent of schools and CEO of TDW & Associates, said: “Going forward, all business will be global. Michigan has much that the Chinese want and need, this is a creative method to connect Michigan businesses and Chinese consumers. Which brings up a question: what if the Michigan-made product takes off: what comes next? “Obviously, Export Now hopes they continue to work through their network,” said Smith.
Smith is convinced Michigan’s economic rebound will come through exports. “We are a state of tinkerers,” added Smith. He mentioned the new satellite U.S. Patent office in Detroit as proof. “We are always No. 1 or 2 in the nation when it comes to states and number of patents.” “Maybe someone has a product they think would do well in China. Here’s an opportunity to find out in an economical way.”
For more contact MEDC: 1-888-522-0103
Carol Cain is the Emmy winning Senior Producer and Host of “Michigan Matters” airing 11:30 am Sundays on CBS 62. She writes about politics and business in Sunday’s Detroit Free Press. She can be reached at email@example.com or 248-355-7126.