It's the job of plastics manufacturers to understand their competition worldwide. This is a perfectly reasonable explanation for why plastic manufacturers from the United States recently traveled to China. They went to size up their competitors.
But why did I, an elected official, the county executive from Erie County, Pa., embark on a trade mission to China? The reason is both simple and straightforward. I accompanied the trade delegation in an attempt to understand the threats and opportunities China presents to the northwestern Pennsylvania plastics industry.
Hoop Roche, chairman and chief marketing officer of Erie Plastics Corp. in Corry, Pa., invited me to participate in the trade delegation. Hoop said it made sense, because I have supported efforts to keep northwestern Pennsylvania's manufacturing sector competitive. He was the pitchman for the June 21-July 1 trip, which was sponsored jointly by the Society of the Plastics Industry Inc. and the Department of Commerce. I was hesitant at first, but Hoop has a way of convincing people.
Roche and other business leaders were so passionate about me accompanying them that they raised half of the $7,000 necessary for the trip.
They thought it was important for me to see in person exactly what the northwestern Pennsylvania plastics industry is up against. They were right. I probably had the biggest awakening of the whole 19-person group. I received an upfront view of not only the threats, but also the broad range of opportunities for businesses willing to take risks and gain access to China's growing consumer market.
I have hung my political hat on innovative economic development programs. I ran for county executive on a platform of economic initiatives aimed at revamping northwestern Pennsylvania's approach to creating and retaining jobs. When I first contemplated running for the post in 1998, the economy was booming and northwestern Pennsylvania had a great market for the plastics and tool and die industries.
When it came time to run for county executive in 2001, I started to notice a trend — many companies were downsizing or closing down altogether. I thought to myself, “There has to be a role for the county government to help businesses address their needs.” My campaign focused on helping Erie County businesses with the things they needed to survive: capital investment, job training for employees and a whole range of programs aimed at helping local companies to compete.
I was sworn into the post in January 2002. My team and I got people to realize that we needed to pull together as a community to help build our economy. But as the economic downturn started to transform into a recovery, manufacturers saw increased competition both at home and abroad. Chinese plastics manufacturers were a major concern.
In August 2003, the Civic Coordinating Committee started a task force headed by Hoop Roche called the Manufacturing Competitive Coalition. The goal of the task force was to find ways for northwestern Pennsylvania manufacturers to stay in the game with their competitors. At the first meeting of the task force, Hoop told me about the SPI-sponsored trip. He said it would be a great opportunity for me to really understand the competition our local companies were facing. To address a problem, you must first understand it. So I agreed to accompany the delegation on its trade mission.
Hong Kong, beyond
The trip began in Hong Kong, went on to Guangzhou in southern China and then north to Shanghai. I was amazed at the size of some of the plastics plants in China. The foreign investment into China is phenomenal. Their economy is growing in leaps and bounds.
I began to think of the possibilities 80 million new middle-class consumers presented for U.S. companies. I know we hear a lot in the news about losing businesses to China. But I thought to myself, “Access to an 80 million-person consumer market might be a spark plug for our local businesses.”
Then I began to look around. At every shopping mall I set foot in, the stores were flooded with Western products. I learned that China imported around 50,000 Cadillacs last year! Buicks and BMWs were everywhere! Surely this wasn't the Red China I heard about when I was younger.
I came to realize that China is on the verge of a transformation. Its economy is moving toward capitalistic principles. The people of China are experiencing the beginnings of economic freedom. China's imports have exceeded the country's exports over the past two years.
As China continues to transform its role in the world, I believe American businesses must look for opportunities to form mutually beneficial relationships. We must look for opportunities to create wealth and jobs in America by gaining access to the possibilities associated with an 80 million-person consumer market. As the economy changes and evolves, we must look for ways to identify opportunities to create jobs and wealth in our own backyard.
There are both risks and opportunities in China. The risks are obvious, but the opportunities are too often overlooked. We cannot afford to ignore a market with 80 million consumers that has the potential to grow to 800 million people. As barriers continue to fall and we move towards a global economy, American businesses must find a way to compete.
Opening China's consumer market to American businesses could help our region to generate wealth, increase wages and create new jobs. We need China's market to be “open for business.”
Rick Schenker is County Executive of Erie County, Pa.