The demand in China for Iowa-produced goods nearly tripled between 2000 and 2004, and state leaders are there this week to find more untapped market potential for Iowa products and services.

Gov. Tom Vilsack and Iowa Department of Economic Development Director Mike Blouin lead a delegation that’s in China to help Iowa companies launch trade relationships in that country and attract Chinese investors to business opportunities in Iowa.

Vilsack will speak to Chinese business and government leaders in Beijing Wednesday at the “Getting to Know Iowa” investment seminar. Representatives from the IDED and two attorneys from Fredrikson & Byron, a Minneapolis law firm, will also participate in sessions about doing business in Iowa.

“We will be participating in seminars and trying to help Chinese companies see how they can invest in Iowa businesses, or possibly open U.S. operations here,” said Steve Dickinson, an attorney with Fredrikson & Byron’s West Des Moines office.

Dickinson and a colleague, China native Li Ruilin, will talk with Chinese business representatives about legal issues and opportunities that make Iowa a desirable place to start a business.

Dickinson said he thinks this Chinese audience will be particularly interested in what Iowa’s delegation has to say.

“I think the receptiveness of the audience might be different now, as the Chinese economy as matured and more investors have been looking outside China,” he said. “Many of them look at the United States because it is one of the largest markets in the world. As those companies are evaluating where to invest, I see no reason that Iowa shouldn’t be participating in this investment flow.”

Representatives from Iowa-based companies plan to use their time in China to research the export market. Ten Square International Inc., an import-export company that specializes in trade between China and the United States, sent three leaders from its West Des Moines office on the trade mission. Charles Wang, Ten Square’s president, is representing Art’s-Way Manufacturing Co. Inc. of Armstrong. Kit and Conrad Spangler are representing Decorah-based Nelson Dairy Consultants.

“The main focus for this particular trip would be to create new contacts and to also do a little bit of market research on behalf of Art’s-Way and Nelson Dairy to help them try to establish a presence in China,” said Linda Clouser, international sales director for Ten Square International.

Leaders from two Eastern Iowa companies also went on the trade trip: Charles Klasson, president and CEO of CIVCO Medical Instruments in Kalona, and William Wang, president and CEO of Pharmacom Corp. in Iowa City.

Tina Hoffman, a spokeswoman for the IDED, said trade mission trips are a regular part of the agency’s efforts to assist Iowa companies with increasing their presence abroad. But this trip is particularly relevant because of the growing number of Iowa products being shipped to China.

“Iowa’s exports grew 22 percent in 2004, and China is a strong market for Iowa products,” Hoffman said. “More Iowa companies are realizing how to become involved with exporting, and we hope we are helpful in that process. It’s a tough leap to take, and once you realize the benefits, it’s usually quite beneficial.”

Vilsack departed for Asia last week to first make confidential prospect calls on companies in South Korea. James Bloedel, the vice provost of research and administration for Iowa State University, and representatives from the Greater Des Moines Partnership joined Vilsack on that portion of the trip.

Also prior to arriving in Beijing, Vilsack, IDED members, representatives from the University of Northern Iowa and Iowa Department of Public Health Director Mary Mincer paid a visit to the Hebei province of China to strengthen Iowa’s Sister State relationship with that region.

“The state has been much more aggressive in the last couple of years with these promotional trips and I think we’re beginning to see some benefit from it,” Vilsack told the Mason City Globe Gazette’s Des Moines Bureau before leaving on the trip.

RECORD EXPORTS

According to the U.S. Census Bureau, exports of Iowa manufactured and processed goods grew to a record $6.4 billion in 2004, a 22 percent increase over 2003. Overall, U.S. exports were up 13 percent last year.

More than 180 countries import Iowa products, with the top 10 trading partners being: Canada, Mexico, Japan, the United Kingdom, Australia, Germany, France, Brazil, China and the Netherlands. Industrial machinery is Iowa’s most-exported product, accounting for $1.4 billion in overseas sales in 2004.

The import market in China has grown significantly in the past four years. According to the Iowa Department of Economic Development, between 2000 and 2004, exports from Iowa businesses to China grew from about $45 million to $128 million. China is the ninth-largest importer of Iowa-produced goods.