Wichita Kansas Vice Mayor Calls Exports To China ‘Big Shot’ City Needs

Posted: November 22, 2014 in Econ 101, Free Trade, Technology and Energy

SOURCE: http://www.aviationpros.com/news/11779747/vice-mayor-china-exports-shot-in-the-arm-wichita-needs

Vice Mayor: China Exports ‘Shot in the Arm’ Wichita Needs

Nov. 20–Expanded exports to China, particularly among Wichita’s general aviation suppliers, is what the city needs to boost its economy, says Vice Mayor Jeff Blubaugh.

Blubaugh recently returned from a trade trip to China with Mayor Carl Brewer and representatives from local aviation companies that resulted in the opening of two Wichita aviation liaison offices and the signing of memorandums of understanding to help bolster trade.

“If we do this right, this is going to be huge for Wichita,” said Blubaugh, who worked at Cessna for 17 years before getting into real estate. “This is the big shot in the arm that we need.”

“We’ve got to paint the picture to our local businesses not to be afraid of China and to realize there are many opportunities over there… It’s everything Wichita was built for and there’s a huge customer on the other side of the world that’s just waiting for business.”

China is in the process of building infrastructure to expand into the general aviation market, which is currently restricted with only a fraction of the airspace, while the rest is under military control. The country has built 87 new airports recently, Blubaugh said, and is building large industrial parks centered on general aviation.

Wichita is consistently recognized for being in the top 5 percent in the country for exports, he said. Growing Wichita’s exports — which doesn’t involve incentives, industrial revenue bonds and tax exemptions — would help grow the local economy.

“This is the free market at its best,” he said. “This is low hanging fruit to me.”

China is specifically interested in aircraft deliveries, joint ventures with suppliers and training, Blubaugh said, and Wichita companies need to look at that as a strong long-term investment.

“The next action is to go out to our aviation suppliers — we have 3500 aviation suppliers in Wichita, and they know that and they want to do business with those suppliers. So I think that’s the big opportunity,” Blubaugh said. “They currently have less than 1,000 general aviation airplanes. They want to go to 10,000 in the next few years.”

“What they’re saying is you can build all the detailed parts in the U.S., you just send them there, do a joint venture with them, they assemble them there and call it made in China… Some people fear they’re just going to reverse engineer, but I think their quality is lacking. They’re a long way away from that. They need us and if we’re not willing to step up to the table and do business, they’re going to find somebody that does.”

China plans to build cities around aviation, Blubaugh said. This comes as the Chinese government plans to move rural farmers to new industrial areas that are now currently full of large, vacant buildings.

“They’re looking at the biggest migration in Chinese history bringing people from rural areas and putting them into cities… The average farmer will farm half an acre, so they’re pulling all of those farmers out of those small towns and putting them in these places and now they’re wanting them to become industrial centers,” Blubaugh said.

In China, it was culturally important for government officials to accompany business officials on the trip to lend credibility to the deals, Blubauh said.

This was his first trip to China and Brewer’s fifth.

“Government to government is huge. It’s like government gives the Good Housekeeping seal of approval, so to have the mayor and vice mayor from the Air Capital of the World was just huge to them,” he said. City officials have already been asked to visit again next August to open more liaison offices.

The increased trade could also lead to more tourism opportunities with China, especially for those who want to go shooting, hunting, gambling or exploring Kansas’ wide open spaces, Blubaugh said.

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