Arkansas Economic Development Commission

Chinese-Arkansas Partnerships Continue to Grow and Prosper

October 2, 2017

China may currently be the hottest of all “hot spots” in the world for doing business. With a population of 1.3 billion people and the planet’s second-largest economy, it’s easy to see why companies are eager to tap into the country’s lucrative market. 

Arkansas-based Wal-Mart, for instance, has been operating in China for more than 20 years where it has more than 400 retail locations – Supercenters and Sam’s Clubs – serving retail customers there. 

China is also a targeted location for international economic development. For the past several years, China has begun to embrace a more capitalistic approach to growing its economy. Economic growth in China hovers around the 7 percent mark. For most countries, that news causes celebration. But not in China where 7 percent represents modest growth at best.

In an effort to grow its economy, the Chinese government suggested its industry titans look around the globe for secure and stable investment options. Arkansas noticed the trend and quickly jumped at the opportunity.

“Governor Hutchinson and I have been to China twice for the sole purpose of building relationships with the Chinese people and working to establish a trust-based partnership with them,” said Preston. “It didn’t happen overnight.” 

The Chinese, Preston said, value face-to-face contact. Telephone calls aren’t sufficient.
It’s a 14-hour flight from Arkansas to China and a 13-hour time difference, but such inconveniences are necessary in order to build a bond. 

“Patience is critical,” Preston commented. “Deals take time; they don’t happen overnight. You have to understand that the dynamics of a negotiation are likely to change more than once.”

Being patient partners has paid off handsomely for Arkansas.

Just recently, in May, Shandong Ruyi Technology Group announced that it will invest $410 million to transform the former Sanyo manufacturing facility in Forrest City into a textile plant utilizing Arkansas-grown cotton and creating 800 jobs in the Arkansas Delta. It will be Ruyi’s first facility in North America.

“Our manufacturing facility in Arkansas will become the first milestone of Ruyi’s steps into the United States,” said Chairman Yafu Qiu of the Shandong Ruyi Technology Group. “We are dedicated to providing a product with cutting-edge technology and superior quality.” 

In April 2016, Sun Paper, from the Shandong Province of China, announced that it was building a $1.3 billion plant near Arkadelphia in Clark County in southwest Arkansas. Once fully operational, the plant will employ about 250 people making an annual average wage of approximately $52,000. The plant is expected to utilize more than 3 million tons of Arkansas-grown pine each year for which timber owners could earn an estimated $28 million annually. 

“Arkansas was a natural fit for Sun Paper, we just had to prove it to them,” Preston said. “We have 19 million acres of forest land and plentiful supply of quality pine timber, which Sun Paper needs for its pulp products. Additionally, our central location with easy access to top consumer markets made Arkansas the ideal choice because it meant lower shipping and transportation costs.”

New relationships and the Sun Paper decision has led to numerous other opportunities. The latest came in October 2016 when Suzhou Tianyuan Garments Company announced it, too, was building a plant in Arkansas. The company makes casual and sports apparel for Adidas, Armani and Reebok.

“I am thrilled that Tianyuan chose Arkansas as their North American home,” said Gov. Hutchinson. “They will invest $20 million in Little Rock and employ about 400 people. Our strategic location gives them great access to U.S. markets and beyond.”

But while there is much to be excited about in regards to foreign direct investment in Arkansas from China, Preston said there is still more work to do.

“A main objective is to create trade opportunities in China for Arkansas farmers,” Preston explained. “That’s been a hard nut to crack for us in China.”

While China, for instance, is one of the world’s leading rice growing nations, it must supplement its home-grown product with imports to satisfied the demand of its 1.3 billion people. 

“Arkansas leads the nation in rice production,” Preston said. “Our farmers grow quality rice and can meet and exceed the stringent quality control requirements of the Chinese government.”

Preston is also working to open markets in China for Arkansas poultry producers.

Arkansas certainly has the momentum in China. The state’s location in America’s heartland, its abundant supply of natural resources, the ease of doing business here and the patient quest for relationship-building will keep Arkansas on China’s investment radar for years to come. 

“Arkansas is open for business to Chinese investment,” Gov. Hutchinson stated.

Download the Arkansas Economic Impact Report