Despite the saber rattling between Washington and Beijing over trade, Gov. Rick Snyder and others from Michigan’s business community are heading to China for a week-long trade mission intended to find economic opportunities for Michigan.

Snyder, who left Thursday night, wisely put China — the most populous country on the planet with more than 1.4 billion people and growing middle class — near the top of his global economic agenda after taking office. He’s also been to Canada, Japan, South Korea, Israel, Germany, Sweden and other countries (Canada and Japan do more business with Michigan than any other).

But his efforts in China have been noteworthy because the country and its opportunities were pretty much ignored by top state elected leaders for political and other reasons.

Former Gov. Bill Milliken reached out to China more than 35 years ago on the advice of his trailblazing wife, Helen, and signed a Michigan-Sichuan Province sister-state agreement. It was renewed in 1984 by then-Gov. James Blanchard but not again until Snyder did so in 2012.

Snyder has put the state’s focus on China into overdrive and will do so again during this trip — his eighth. He said he plans to tout Michigan’s manufacturing, mobility, agriculture and tourism sectors.

Since Snyder’s first visit in 2011, Michigan received $1.21 billion in new investment from China, resulting in 6,304 jobs for Michigan residents.

The relationship-building with China has led to a boom in tourism as the number of international visitors from China between 2011 and 2017 increased 84 percent.

Corrigan Air & Sea Cargo is among companies attending the trade mission.

Automation Alley Executive Director and CEO Tom Kelly also will be in China and attend the World Economic Forum in Tianjin next week, a forum Snyder likely will attend, too. Kelly will moderate a dinner program at the event.

The forum has been a catalyst for global initiatives, industry breakthroughs and economic ideas for nearly 50 years. This year it is focused on the future of manufacturing.

“Michigan’s pre-eminent position in manufacturing and supply chain management compels us to lead the charge for Industry 4.0 transformational initiatives, not only in our state, but internationally as well,” Kelly said.

Building relationships
Michigan Economic Development Corporation (MEDC) is the state entity that has been leading global trade missions. Michigan China Innovation Center was created two years ago as an offshoot to assist in China. It’s run by Brian Connors who moved from the MEDC as the center’s executive director.

Snyder has cut an impressive path in a short time as he’s built up “guanxi” (a social network to facilitate business) with Chinese leaders, which you need to succeed.

“Gov. Snyder has made boundless contributions in the way of promoting Michigan’s revival,” said Hong Lei, Chinese Counsel General who has been the point person between Michigan and China on behalf of the communist government. “The eight years he spent as governor of Michigan have been the ‘shining years’ of China and Michigan’s friendly relations characterized by sincere dialogues and fast progress,” Lei said.

Lei just wrapped up his stint in the U.S. and is awaiting his next diplomatic assignment.

Lei, who arrived in Chicago two years ago, was in charge of nine states including Michigan. He was a frequent visitor here, no doubt drawn by our manufacturing and automotive base, agriculture base and research and technology mite.

I asked his thoughts about Washington and Beijing.

“Ever since China and the U.S. established diplomatic ties nearly 40 years ago, there has been an obvious pattern between the two countries: When they cooperate, both countries benefit; when they fight, both countries suffer damage,” Lei said.

“As the world’s two largest economies with massive trade flows and deeply intertwined interests, it is only natural for China and the U.S. to have differences and conflicts,” Lei added. “The key is to resolve these conflicts in a constructive manner. I hope the U.S. can meet China halfway to resolve the trade conflict and bring bilateral economic and trade relations back on track at an early date.”

Reaching out on Michigan’s behalf

Japan is another country important to Michigan and got attention this week from Gov. Snyder, Oakland County Executive L. Brooks Patterson and Novi Mayor Bob Gott as they celebrated a big anniversary.

Patterson, Snyder, Gott, Shiga Gov. Taizo Mikazuki and Japanese Counsel General in Detroit Mitsuhiro Wada were among officials who took part in a ceremony Friday to recommit to the sister-state relationship struck between Shiga Prefecture, Japan, and Michigan 50 years ago.

To mark the occasion The Sakura Garden at MSU Tollgate Farm and Education Center in Novi was unveiled last Friday as the group of leaders planted a cherry tree, which will adorn the pavilion along with 17 others.

Many Japanese nationals have embraced Michigan, gravitating to Novi and Oakland County.

“We have a warm relationship with Japan and over 270 firms in Oakland County alone from there,” said Patterson, adding the county has more than 17,000 Japanese residents.

Govs. Snyder and Mikazuki also traveled to Grand Rapids on Tuesday to plant a cherry tree in the Japanese Garden at Meijer Gardens also to commemorate the anniversary.

“The Michigan-Shiga partnership is one of the oldest sister-state agreements between the United States and Japan,” said Snyder. “I look forward to even more growth in our relationship over the next 50 years.”

He said reaching out to places like Japan and China and other nations is vital to Michigan’s long-term economy.

“Michigan has benefited immensely from partnerships we have established and strengthened over the last eight years,” he added.

To bolster Michigan’s presence in Japan, MEDC just hired A-Lex International Marketing.

“In the ever-intense competition to attract foreign-based companies to Michigan, it is of utmost importance to strengthen our ties with key partners,” MEDC CEO Jeff Mason said.

Since 2011, there have been 59 investments from Japan-based companies in Michigan. Those projects have generated a total of $1.6 billion in capital investment and created 4,700 jobs for Michigan residents.

The focus now is to put the pedal on those efforts and increase the numbers to benefit the state.

Rick Williams

Rick is the Managing Partner of Polk and Associates and Director of our Attest, and Manufacturing services divisions. He earned his Bachelor of Science degree in Accounting from Western Michigan University and earned his Accreditation in Business Valuation from the AICPA and is a Chartered Global Management Accountant. Rick is a member of the Michigan Association of Certified Public Accountants, American Institute of Certified Public Accountants, AICPA Forensic and Valuation Services section, Michigan Manufacturers Association, MMA Tax Policy Committee, SAE, Affordable Housing Association of Certified Public Accountants, and Automation Alley.

RWilliams@polkcpa.com