CHINA TRADE - China’s air cargo hub in St. Louis to provide strong commerce, business opportunities

By: | at 08:00 PM | Channel(s): Air Cargo News  

By Manik Mehta, AJOTThe presence of China’s Vice Premier, Wang Quishan, with a delegation in June in St. Louis, Missouri, for talks with local politicians and officials to formalize the establishment of air-cargo hub was intended to convey a strong message to US audiences: that China was interested to increase its two-way trade and business interaction with the United States by setting up the air-cargo hub and a commercial center in the Midwest.
As can be expected, St. Louis officials were elated by Wang’s presence. Apart from the presence of high-profiled foreign dignitaries, which provided an international flair to St. Louis, the city officials also recognized the huge economic benefits St. Louis would derive from China’s air-cargo hub.
Indeed, Government representatives told the American Journal of Transportation that the air-cargo hub would also provide a strong impetus to the state’s economy. Richard C.D. Fleming, the president and CEO of the St. Louis Regional Chamber and Growth Association (RCGA), was of the view that Wang’s presence in St. Louis spoke “volumes about how seriously the Chinese are exploring the notion of making St. Louis their Midwestern point of entry into the United States.”
Fleming said that establishing an air-cargo and commercial hub in St. Louis would transform St. Louis into China’s “gateway” to the West.
St. Louis officials have painstakingly worked to get the Chinese to open an air-cargo hub in their city. However, the establishment of the hub took concrete shape only after China signed two memoranda of understanding with Missouri and St. Louis in Beijing in March this year during the visit of a trade mission headed by US senators Kit Bond and Claire McCaskill. Indeed, the signing of the MoUs was the first tangible step in the direction of creating the air-cargo hub; feasibility studies on the establishment of the air-cargo and commercial hub for the Midwest region began after the two MoUs were signed.
While the first MoU seeks to strengthen ties between China and Missouri through new trade and economic initiatives, the second MoU, jointly signed by Missouri Governor Matt Blunt, St. Louis Mayor Francis Slay, St. Louis County Executive Charlie Dooley and Wang Chang-shun, vice minister of general administration of Civil Aviation of China (CAAC), focuses on the establishment of an air-cargo and commercial hub at Lambert.
Clearly trying to soften US criticism about China’s burgeoning trade surpluses and about China not buying enough of American products, the Chinese delegates reminded that China is the third largest market for American goods, after Canada and Mexico, both partners of the United States in the North America Free Trade Agreement (NAFTA). US exports to China in 2007 amounted to some $65.2 billion, a 301% increase since 2000. Missouri’s exports to China surged to $1.015 billion in 2007, a 1,200% increase over 2000.
Missouri exports waste and scrap as well as chemicals, minerals, ores, agricultural products, etc. China supplies a wide array of products ranging from textiles/garments through food products and jewelry products to sophisticated electronic parts and components.
The weak US dollar is also attracting European and Asian companies to invest in the United States and set up operations. The Chinese are also taking advantage of the dollar’s inherent weakness. Chinese direct investments in the US amounted to $1.1 billion in 2001 but rose to $16 billion in 2006. Pundits expect Chinese investments to rise to $60 billion by 2010. This, they say, will boost trade as well as cargo traffic between the United States and China.
The idea of creating an air-cargo hub in St. Louis had germinated four years ago when a local developer Paul McKee, owner of McEagle Properties, tried to push this project. McKee is developing the 150-acre Hazelwood Logistics Center and the 550-acre North Park, east of the airport. Airport officials have been projecting St. Louis’ “great advantages” with its lower trucking costs, less severe weather

American Journal of Transportation