In welcoming the Chinese New Year, Donald Tong, commissioner of Hong Kong to the U.S., said during a ceremony at the Fernbank Museum of Natural History on Feb. 14, that the “Year of the Rabbit” is a good omen, and he hoped that it would result in improved Chinese-American trade relations.

According to Chinese folklore, rabbits are energetic, alert and productive and are good signs for growth and prosperity.  Chinese-American trade is crucial for both partners because of its massive size and interdependence.

China is one of Georgia’s major trading partners. The latest available figures from the Georgia Department of Economic Development show the state exported $1.7 billion of goods to China and imported $10.5 billion, for a trade imbalance of $8.8 billion in 2009.

China is the number one exporter to Georgia.  China is Georgia’s second most important export market, after Canada. Georgia’s trade office in Beijing and the visits of former Georgia governors on business trade missions to China have been successful in the promotion of exports from Georgia to China.

Chinese investment in Georgia began in earnest in the 1990s with a residential real estate development in Buckhead by the China Construction Co., one of the largest construction companies in the world.

Investments by China have increased since then through the efforts of the economic development office, university exchange programs and the efforts of Chinese-Americans here.

The contributions of Chinese-Americans to trade development are particularly important because good personal relationships are crucial to doing business in China. Attorney Eve Gu of McKenna, Long and Aldridge LLP, who has been actively involved in local Chinese investments, explains that guanxi means connections based on mutual respect and trust.

Small- and medium-sized businesses especially need guanxi to do business in China, whereas the large corporations can manage by the power of their influence and persuasion.

Most of Georgia’s Fortune 500 companies are major business players in China. In spite of Coca-Cola Co.’s initial disappointment that their “exclusive” contract in China did not preclude PepsiCo. Inc. from opening offices and operations in Shanghai, Coca-Cola succeeded in dominating the Chinese soft drink market.

The success of United Parcel Service Inc. was spectacular because it was the last international entry after DHL International GmbH and FedEx in China. The computerized logistics and supply chain management of UPS and its vast resources, including the largest air cargo fleet in the world, contributed to its success in China.

Lockheed Martin Corp. has exported a fleet of its Hercules C-130 transport planes to China. Delta Air Lines Inc., was the first U.S. airline with direct flights from Atlanta and other major U.S. cities to Hong Kong, Beijing and Shanghai.

Under the leadership of Ted Turner, CNN made a successful entry into China in spite of central government regulations and protection of domestic communications networks. GE and its power division in Atlanta were first mover entries into China in the energy field. Underscoring the importance of China, John Rice, vice chairman of GE’s board of directors, is moving from Atlanta to Hong Kong to coordinate the global operations of the GE group of companies. Other Georgia companies with a major presence in China are Newell Rubbermaid Inc., NCR Corp. and AGCO Corp.

The stories of small- and medium-sized companies in Georgia are just as impressive as attested by attendees at the Fernbank event.

Jerry Allison, chairman and CEO of AJC International Inc., a billion-dollar poultry trading company, says that China is the growth engine for his company, accounting for over 30 percent of its total sales plus a high annual growth rate. AJC exports 200 containers of chicken feet every month to China.

Remco Bos, president of Ask Remco LLC, a custom manufacturer of canned foods and medical devices in China, says that their Chinese business has grown by double digits in spite of the severe global recession. Due to rising wages in China, however, Mr. Bos’s future plans for labor intensive industries are to locate in Vietnam with high-tech manufacturing done in the U.S.

According to Harold Hagans, president of Atlanta Custom Brokers and Freight Forwarders Inc., 60 percent of the company’s shipping business is with China.

In spite of record bankruptcies of banks in Georgia, Atlanta’s Touchmark National Bank is growing thanks to business transactions with China. Many of Atlanta’s major law firms have Chinese lawyers as partners and have offices in major cities in China where American companies do business.

Firms with Chinese offices include McKenna, Long and Aldridge; Troutman Sanders LLP; Jones Day; and Paul, Hastings. Janofsky & Walker LLP.

Concerns about the large U.S. trade deficit with China are highly politicized. To be sure, there are differences in the terms of trade, the exchange value of currencies, labor costs, and protectionism between the two major world powers. However, there will continue to be common ground for trade and investment.

The real challenge for the future competitiveness of the U.S. versus China is in education. The U.S. is cutting investment in education and technology at a time when China is doubling its educational investment.

C.G. Alexandrides is professor emeritus at Georgia State University. He has been an adviser to China Tech and consultant to U.S. companies in China. He can be reached at or by phone at (770) 846-1498.