PIERRE, S.D. (AP) - South Dakota Gov. Dennis Daugaard currently is leading a weeklong trade mission to China at a cost of $93,000 for the state, but the Republican believes the trip is worth the expense.
Daugaard is hoping to expand the state’s export markets, building on his two prior trips that resulted in brokered deals.
In an interview this week, Daugaard said: “We don’t have an objective dollar target.”
“We know that South Dakota’s production well outstrips our ability to consume that production,” he said. “So for South Dakota to grow, we need to export our products outside our state lines.”
For his past two trips to China, federal grants have covered most of the expenses. This time, the state will pay for up to 30 percent of costs of the companies joining Daugaard.
Here’s a look at the trip by the numbers:
ONE
China is the most populated nation in the world, and its gross domestic product growth in 2012 exceeded other developed countries, World Bank data shows.
“We picked China, because it’s the largest consumer-based (economy) in the world, largest country in the world,” Daugaard said. “It’s become a very large trading partner for South Dakota.”
TWO
Delegates will spend two days in two Chinese cities - Beijing and Shanghai - to meet with their counterparts in industry and government.
The local embassy will pair South Dakota’s and China’s business representatives with an interpreter, a process Daugaard likened to speed dating with delayed conversations.
“It’s real awkward and slow, but that’s the initiation of the conversation that we hold that has in the past led to business,” he said.
THREE
This is Daugaard’s third trade mission to China. He had similar goals during the 2012 and 2013 trips: to facilitate deals.
The 2012 trip, Daugaard said, resulted in deals for a few businesses on the trip. After the 2013 visit, Millennium Recycling of Sioux Falls sold $1 million in waste paper to a Chinese firm for recycling.
FOUR
China was South Dakota’s fourth largest export market in 2013, according to the U.S. International Trade Administration, trailing only Canada, Mexico and Saudi Arabia.
Of the $49 million in products exported to China last year, over 40 percent was food and food products, such as milk fat and sunflower seeds.
NINE
Eight state officials are on the trip, including Daugaard, a policy adviser, staff from the Governor’s Office on Economic Development and Agriculture Secretary Lucas Lentsch. A security officer is accompanying the governor.
Daugaard said if he had his way, he would send someone in his place, but his presence lends credibility to the businesses.
TEN
A staffer from a state university doing recruiting work and nine business representatives are on the trip. The businesses were chosen because they have some experience or knowledge of trade with China but still need help expanding into that market.
“Those are the companies that we think can benefit,” Daugaard said. “They’ve put their toe in the water a little bit on their own. Now, we’re going to help them.”
South Dakota dairy producer Valley Queen Cheese already has one client in China, but company vice president of sales Jason Mischel said it makes up fraction of its sales. Mischel, who is in China with the governor, sees big opportunities for growth, especially with production starting this year on a new whey protein product that can be used in infant formula.
“The infant formula market is really booming in China,” Mischel said.
Joining Valley Queen on the China trip is Davisco, another dairy, and Advanced Sunflower, a processor of sunflower seeds.
Muth Electric and Dakota Steel and Trim are also represented in the delegation.
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