Georgia plans to open a new economic office in Qingdao, China, next year to get ahead in a city that is growing fast but remains off the beaten path for the state's competitors.

Gov. Nathan Deal announced the new office during an Oct. 19 stop in Beijing, where Georgia opened its first trade and investment outpost in 2008. Later in the trip, Mr. Deal's delegation visited Qingdao, a port city in eastern China's Shandong province.

Qingdao was targeted for a variety of reasons, said Chris Cummiskey, commissioner of the Georgia Department of Economic Development.

Not only does its port already have ties to Savannah, but it also sits in a province of more than 90 million people with which Georgia has a relationship through an international alliance of states called the Regional Leaders Forum.

It also doesn't hurt that Qingdao is a great place to visit. Probably best known for the beer that bears the city's name, Tsingtao (an older romanization), the city was also the location for sailing competitions during the 2008 Olympics.

"Qingdao was absolutely one of the most beautiful cities I have ever been to in my life. You feel like you're on the West Coast of the United States," said Mr. Cummiskey, who visited the city for the first time during the October business mission.

The city is also home to Hisense Group, China's largest flat-screen TV maker and a major appliance manufacturer. Hisense has North American headquarters and a research and development center in Gwinnett County, where it has expanded twice in the past three years.

After meeting with Hisense and a few undisclosed prospects, Mr. Cummiskey told GlobalAtlanta that a Qingdao office would give Georgia a head start on other states, which mostly confine their representative offices to Beijing and Shanghai. 

"The people who are there first and really put their flag down first I think have an advantage in the long run because the province and the city know that you were there making a commitment before everyone else was," Mr. Cummiskey said.

The move was announced at the U.S.-China Governors Forum in Beijing, where state leaders gathered to deepen ties with their Chinese counterparts, better positioning themselves in the race for Chinese trade and investment.

At the conference, Mr. Deal met with Jiang Daming, governor of Shandong province, as well as Zhou Jiang, the Communist Party secretary of Hunan province, home to another major investor in Georgia.

Mr. Deal then flew from Beijing to Changsha, the capital of Hunan and the hometown of Sany Heavy Industry Co., a manufacturer of concrete pumping equipment that has spent $60 million on a plant in Peachtree City.

Mr. Deal signed an accord with Hunan Gov. Xu Shousheng to explore further business relationships, as well as cultural and educational exchanges.

On the last leg of the trip, the governor met with Shanghai Mayor Han Zheng to discuss similar ties, after which Mr. Cummiskey signed a mutual investment agreement with his counterpart in the Shanghai government. Though most know it as a city, Shanghai is considered a province for purposes of China's central government.

Though business ties will ultimately form the backbone of commercial relationships, Mr. Cummiskey said government relationships help smooth out the introductions and preliminary meetings.

"What we've seen with the Chinese is that the government is going to let businesses do their business, but when they come into play, if they have a good feel for you as a state, if they feel comfortable with past business dealings, they will always support a company's growth in certain areas," he told GlobalAtlanta.

For states, it's probably more important to have an office in China than in other countries, said Chip Chaikin, the partner leading the Shanghai office of Blue Point Capital Partners, a Charlotte, N.C.-based private equity firm focused on middle-market companies.

That's because many medium-sized Chinese companies still lack the know-how to invest overseas, and they sometimes choose a place based on feeling and relationships rather than careful analysis, said Mr. Chaikal, who works out of Blue Point's office in Cleveland but spends about a quarter of his time in China.

"You can get in front of the Chinese and make yourself one of the preferred places because they're not very systematic about choosing a location," he said.

But the new office isn't just about investment, Mr. Cummiskey said. Like Beijing and most of the state's nine other offices around the world, it will also help small Georgia companies find trade leads in China.

Georgia exports to China grew to $2.4 billion in 2010, up 35 percent from the previous year.

Michael Su handles trade inquiries in the Beijing office and will continue to do so. Georgia hasn't filled the managing director position, which focused on foreign direct investment, since it declined to renew Lindsay Liu's contract in April 2010. The state will likely search for a new Beijing rep as it looks to staff the Qingdao office next year, Mr. Cummiskey said. 

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