Alabama and Trade with China

With a population of more than 1.3 billion people, a rapidly growing urban middle class, and an economy poised to dominate the world, China is an attractive consumer marketplace for American companies. The Chinese market is a world of potential and Alabama is joining the many that are looking East.
According to Business Alabama (7/11) China jumped last year to second place among Alabama’s world export markets, with 142 percent year-to-year growth in 2010. China also tops of the list of countries importing Alabama chemicals bringing in $554 million. This is topped further by the transportation equipment import category that includes Alabama cars. China imported $579 million worth last year. China is an important destination for export goods shipped through the Port of Mobile such as grain, coal and forest products.

Selling to China is not always easy. Many Chinese workers make no more than $3,500 in wages in an entire year. It may take a third of a year salary to purchase a sofa. However, China does have a rising middle and elite class. There are cultural issues as well as monetary issues affecting how the Chinese buy. There is a concern about products that are real, and there is a desire to want to go to the store to touch a product and see what they’re purchasing.

Adding to the frustration is the fact that many Chinese consumers don’t have credit cards and are distrustful of online-payment systems. As people buy more online, they’ll begin to understand that they have consumer protections. But, it will take time.

George Haley, University of New Haven professor and author of The Chinese Tao of Business: The Logic of Successful Business Strategy, writes concerning a culture clash when it comes to customer service. “The Chinese have become extremely demanding consumers, and service is something that they absolutely demand to a much greater standard than American consumers,” he says. He believes it will be essential for companies to maintain inventory so that it can guarantee delivery times, or risk customer backlash. He also says, “the Chinese consumer is extremely brand-conscious.” Well named brands and luxury items are important here. The promotion of low cost is not always a selling point.

The Chinese market is transforming trade in one of Alabama’s most traditional agricultural markets. As written in Business Alabama, and according to state pecan expert Bill Goff, China trade is “the biggest thing to ever to happen to the pecan industry.” China’s pecan imports went from 2 million to 83 million almost overnight. For years the Chinese have eaten walnuts for their health, and they have now discovered that pecans can promote longevity and are even better for you. In a country where age is revered, that is key. Add in the rising affluence of the Chinese middle class, a favorable exchange rate, and things just snowballed.

Foreign direct investment is important to Alabama’s economy. Consider the jobs created by Germany, Japan and Korea for our state. Looking at trade with China? Don’t tread in without good support. Director of International Trade for the Alabama Development Office, Hilda Lockhart, recommends the Confucius Institute at Troy University. It is a great place for Alabamians to learn about Chinese life, customs and industry. There are resources with ADO as well as Chamber of Commerce based initiatives and the US Department of Commerce.

Employment Trends and The First Half of 2011 Invested

The first half of 2011 is in the bag. I must have blinked because it has just flown by and let’s take a look at where we are. There is worry about how Greece and several other European nations will handle their debt problems, and signs of weakness for our own economy. There are continued concerns that China's economy, the world's second-largest and crucial to the commodity markets, is slowing. Even risky and speculative gold investments have hit a slide declining 5 weeks running for the first time in years. I suppose at the end of the day there is a difference between an economy not sprinting forward and one that's going backward. I suppose the good news is that we are at least walking forward.


Unemployment is still hovering a bit over 9%, and there are a few interesting trends to be found in the work place. The rash of downsizing as companies worked to protect their margins and reduce operational costs has left a mixed bag of workers. Some retained workers are certainly glad to have a job, while others are struggling to find balance and meaning in their new roles. Many retained workers still are rolling from the “fruit basket toss up” and let’s work with what falls out mentality. According to a recent survey by Mercer LLC (WSJ 7/1), one in three U.S. workers say they are seriously considering leaving their employers. It seems that most are young workers with 80% of them 34 and younger. This is particularly troubling for small business which is normally limited in size, and the weak economy has forced many in recent years to downsize to even lower levels.

In a move to retain talent, many companies are looking at reinstating perks that may have been dropped along with employees during the downsizing moves. Reinstatement of 401K and a match as well as merit based bonuses are seen as key retention tools. Other perks deemed highly effective for retention include vacation and personal time, wellness-related benefits, flexible schedules, tuition reimbursement and telecommuting.

But not everyone is looking at leaving, or asking for more perks. Some are trudging off in an entirely different direction. Faced with bruised nest eggs and high unemployment rates, older Americans are becoming entrepreneurs.

According to the nonprofit Ewing Marion Kauffman Foundation (WSJ 7/1/11), individuals between the ages of 54 and 64 represented 1 in 5 launched businesses in 2010, suggesting the United States might be on the cusp of an entrepreneurship boom not in spite of an aging population but because of it. Apparently you do not need to be a 20 something young tech genius, just a calculating risk taker.

Of course starting a new business is not for the faint of heart with a failure rate as high as 90%, and most new businesses taking 5 years to break even or turn a profit.

Whether you stay, go or start off on your own, it is important to enjoy your work life. For most of us, it does consume 40 to 80 hours of our week, so we should work to make it count. It has been suggested to separate the demands of work from your own expectations of yourself. No matter where you are in your career path take the time to be aware of your goals, be they career advancement, work life balance or otherwise. Carving out for yourself a less formal and more goal-oriented workplace with the help of your boss or manager may be just the ticket to keeping you right where you are. People are more productive and happy when they have creative freedom and autonomy to get things done.

As you move into your work week next week, remember, take care of your customers (and I will add your employees) or someone else will.