China is the future market for Minnesota agriculture
By Gene Hugoson
St. Paul, Minn. (September 2010) – One of my long-term goals as Agriculture Commissioner has been to help position Minnesota’s agriculture sector as an attractive trade partner for Chinese importers. That’s the reason I’ve been to China on trade development missions more often than any other country. And it’s the reason I am traveling there again this month with Governor Tim Pawlenty and a group of Minnesota farm leaders.
From World War II allies to Cold War foes to 21st century business partners, U.S. – China relations have taken many twists and turns. But for our farmers, the relationship today can be summarized in one word: opportunity.
Let me throw out a few numbers to help illustrate what I mean.
• China has a population of 1.3 billion people. That means about one in five human beings live in China.
• China’s economy grows at a rate of about 10 percent a year, and a few months ago China passed Japan to become the world’s second largest economy after the U.S.
• China has a quarter-acre of arable land per person while America has an acre and a half per person.
China needs a reliable external source of food to help meet the needs of its massive population. And when you consider that U.S. agriculture production continues to outpace domestic food demand, it’s obvious that Chinese consumers and U.S. farmers are well positioned to help each other out.
The opportunity is clear, but it’s not a slam dunk. Both sides must learn from our turbulent history and form a partnership that stands the test of time.
What does that mean for Minnesota’s agriculture sector?
For many Westerners the biggest challenge to doing business in China isn’t the language gap (many Chinese speak English), but rather developing an awareness of the key cultural differences. It’s difficult to grasp the true nature of the Chinese culture or economy without visiting the country. That’s why it is helpful for our farmers and agribusiness leaders to see China themselves.
A lot has changed in China over the last decade or two. Today, Chinese youth walk around with smart phones and the city skylines glitter and gleam with the latest super-skyscrapers.
But the modern, “Western” feel of these cities can obscure the fact that the culture of this region hasn’t changed nearly as much as the architecture. In this part of the world, people place more weight on relationships than is typically the case in the individualistic West.
Asian business relationships don’t exist on an as-needed basis. They need to be cultivated and maintained, and Americans who ignore this can quickly find themselves on the outside looking in.
China represents the biggest opportunity of the 21st century for Minnesota farmers, and to make the most of it, we must build partnerships and seek mutually beneficial deals. China is not a short-term market solution for a bumper crop year. The market is a long-term business opportunity that requires investment, not only in dollars, but more importantly in personal and organizational time and energy.
As China’s market continues to grow, trading partners that demonstrate their commitment to business in the country will grow as well. The first step is to form a personal connection, and that is the real value and focus of our trade missions.
Gene Hugoson is the Commissioner of the Minnesota Department of Agriculture. www.mda.state.mn.us