Louisiana loads up on China trade

By Hong Xiao and Zhang Yu'an in Providence, Rhode Island | China Daily USA | Updated: 2017-07-21 12:47

Louisiana has benefited greatly since Chinese investment increased in the US Gulf Coast in 2010.

"It (cooperation between Louisiana and China) is not just a thing we might be able to do in the future, we are actually breaking ground now, and I'm excited about that," Governor John Bel Edwards told China Daily on July 13, on the sidelines of the 2017 National Governors Association Summer Meeting in Providence, Rhode Island.

Chinese commerce is already a transformative force in Louisiana's economy, with extensive trade and recent cross-border investment linking the two more strongly than ever, according to the Louisiana Economic Development website.

The Bayou State is now the third-largest recipient of Chinese foreign direct investment (FDI) in the US. Louisiana's 2016 exports to China amounted to almost $8 billion, making China its top export market, according to US Census Bureau statistics.

Louisiana loads up on China trade

"Last year, Louisiana ranked 17th among 50 states in trade with China. Trade with China increased from $7.5 billion to $9.1 billion at the end of 2016. And the largest commodities are organic chemicals, minerals, fuels, plastics and nuclear reactors," Edwards said.

Top exports to China include agricultural products, copper and ores. Last year, the state's voluminous agricultural exports contributed to a nearly $7 billion trade surplus with China, the largest of any state.

Now there is a new commodity in the picture, liquefied natural gas (LNG).

Among the initial steps in the China-US 100-Day action plan of the Comprehensive Economic Dialogue - agreed to by President Xi Jinping and US President Donald Trump at Mar-a-Lago in April - Chinese companies were invited to negotiate long-term contracts for LNG shipments from US suppliers.

The step indicates more growth opportunities for Louisiana - a state with an abundant natural gas supply.

Louisiana is speeding up LNG facility construction not only for export but also for local chemical engineering.

"The announcement of the official policy of the importation of natural gas is going to be very helpful," Edwards said.

In April, China's Wanhua Chemical announced a $1.12 billion plan to build a chemical manufacturing complex in Louisiana.

The plant, which will produce methylene diphenyl disocyanate (MDI), a major chemical used in insulating foam for refrigerators, is expected to create more than 1,100 jobs. A site will be selected this year.

The project would be the second-largest Chinese investment in Louisiana, following the $1.85 billion methanol complex under development by Yuhuang Chemical in St. James Parish in 2014.

Both companies chose Louisiana because of the state's proximity to inexpensive natural gas as well as its convenient waterborne transportation.

"We are very blessed geographically with the Gulf Coast and the Mississippi River," Edward said proudly.

Louisiana now has more than $90 billion in LNG export facilities in the planning stages, under construction or in operation across about a dozen facilities.

"We've always used the pipelines to move our gas to the rest of the country, but now those pipelines have been reversed, bringing more gas to Louisiana not only for export but also for chemical engineering," said Edwards, who took office January 2016.

"And we have Chinese investment in natural gas for export along the coast," he said. "The very first plant actually did export, but most of the plants are still under construction, including the ones that are being financed by the Chinese companies," he added.

In May, Chinese Ambassador to the US Cui Tiankai visited Louisiana and met with Edwards and other state officials.

Edwards told Cui that Louisiana regards China as its primary FDI partner.

"We are going to do more as a state to make sure that we can increase the comfort level with people, that it is the right place to invest money, and we're willing to infrastructure things properly," he said.

"The opportunities are there in Louisiana. With our efforts and people's support, the partnership between China and Louisiana will be strong and growing," Edwards said.

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