- The Washington Times - Monday, December 17, 2001

The China bug has long infected the largest U.S. corporations but the buzz among smaller companies is rising as well, and the Washington area is no exception.
After more than a decade of stop-and-go negotiations, the Asian giant last week formally took its seat at the World Trade Organization, the Geneva-based forum for setting international trade rules.
As a result, small and medium-sized business in Virginia, Maryland and the District are checking out the opportunities in China, while those who already deal with China are developing plans to expand.
"Over the last year, as it finally became clear that China would make it over all the hurdles, interest has definitely picked up," says Clay Hickson, president of the Maryland-China Business Council.
Multinationals have seen the potential in China for years. AOL Time Warner, with its Internet-related operations in Sterling, Va., signed a deal in July to distribute content in China. Frederick, Md.-based Bechtel Power has helped build power plans in China.
These giants account for most of the two-way trade between the United States and China, which hit $116.2 billion last year, and the $30 billion in direct U.S. investment in China.
Eager for American trade and investment, Chinese officials are hitting the road to tout their advantages: a growing market with a well-trained and cheap labor force. China's official salesman made their pitch on friday at the Ronald Reagan International Trade Center in the District.
"Activities like these are important to promote exchange of ideas between the United States and China," said Ku Suen Fai, a member of China's National People's Congress and chairman of the World Union of VIP Enterprises, a Chinese business group based in Hong Kong.
For many area businesses, WTO membership is an opportunity to expand existing operations in China. The Baltimore Aircoil Co., which manufactures refrigeration and air-conditioning equipment, has had a joint venture in Daliau, a northern city near the Korean border, for three years.
"We think the Chinese market will eventually be bigger than the United States, says John Lau, the company's market manager for Greater China, which includes Hong Kong, Taiwan and Macau.
The privately held company, itself a subsidiary of Chicago-based Amsted Industries, hopes to triple its Chinese sales in the next 10 years, Mr. Lau says.
WTO membership means that China will reduce its tariffs on Baltimore Aircoil's imported equipment from around 36 to 20 percent, Mr. Lau says. China also agreed in the trade talks to relax restrictions on currency conversion, a major source of irritation for American firms there.
In the coming year, Baltimore Aircoil plans to take a greater equity stake in its joint venture, in which it is a minority partner. Eventually, Baltimore Aircoil hopes to do all its manufacturing for the Chinese market in China.
The consultants and lawyers who use their knowledge of China and the United States to broker deals also see dollar signs these days. Bang Xu, a lawyer with the Washington law firm Patton, Boggs LLP, already does a brisk business facilitating U.S. government financing for American companies that export big infrastructure equipment to China.
"This is a great opportunity, even for very traditional Washington law firms," she says.
The firm is already helping an American company export equipment for an asphalt plant that will supply construction projects aimed at preparing China to host the 2008 Olympic Games.
Last year Congress, after months of bitter debate, discarded an annual review of China's trade status that turned U.S. business interests in China into a lightning rod for criticism every summer. But the U.S.-Chinese economic sector may yet again become entangled in politics.
Last year, Congress created a commission to focus attention on China's dismal human rights record, and its critics often take aim at commercial ties.
"The long knives that opposed [the trade agreement with China] are always unsheathed," says Robert Kapp, president of the Washington-based U.S.-China Business Council.
Still, most veteran observers of the Washington-Beijing scene expect much smoother sailing than in years past. Most importantly, the imperative to fight terrorism is driving the United States and China closer together, and repairing damage to relations during the crisis over an American reconnaissance plane that made an emergency landing on Chinese soil.
"It's a small world now," says Dave McCurdy, president of the Arlington-based Electronics Industries Alliance. "The pressure is on [China] to play nice."

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