Governor Bob McDonnell of Virginia has been proactively looking to China as an export market for Virginia’s agricultural products, a subject that we have previously highlighted. Governor McDonnell explained that “Fifteen years ago, Virginia’s agricultural exports to China were negligible. Today, business is booming.” He was referring to the fact that Virginia exported more than $2.6 billion of agricultural and forestry goods—Virginia’s largest industries—to China in 2012.
Virginia is continuing to look and ultimately benefit from China as an export destination, at a time when Chinese investment in the United States has increased by over 8,000% since 2002, according to data from the Rhodium Group. Regarding Virginia, there have been a number of recent developments in the bilateral Virginia-China business relationship including:
- A trade deal between Virginia’s Perdue Agribusinesses Inc. and China’s Dandong Pasite Grain and Oilseed Co. Ltd. for the export of soybeans has been expanded for the second consecutive year. Under this deal, 14 shipments of soybeans valued at approximately $434 million will be exported directly from Chesapeake Port. The initial deal signed in 2011 was for five shipments.
- Chateau Morrisette, one of the oldest wineries in Virginia, signed a five-year agreement earlier this year to begin shipping wines to Tianjin, China, making that country the winery’s first foreign export market. George Weldon, general manager of Chateau Morrisette, explained that the contract is “an integral step toward implementing our long-range strategy of increasing distribution both domestically and internationally.” -Governor McDonnell endorsed the agreement when he stated “These exports ultimately provide new opportunities, and new jobs, for our agribusinesses and citizens.”
- More recently, China’s Shuanghai International Holdings announced a bid for Virginia-based Smithfield Foods. The deal, which is valued at $4.7 billion, would be the largest sale of a U.S. consumer brand to a Chinese company, and is currently awaiting approval from the Committee on Foreign Investment in the U.S. Under the agreement, Smithfield will continue to maintain its current management, facilities, and headquarters in Smithfield, VA. Proponents of the acquisition highlight that exports of pork products to China are expected to increase, in turn benefiting U.S. farmers and producers.
China is already the leading market for Virginia’s exports, and when the Panama Canal expansion is completed in 2015, Virginia’s trade with China will be even more accessible. Other U.S. states on the East Coast may begin to follow in Virginia’s footsteps and deepen their trade partnerships with China.