A growing partnership

Gov. Bill Walker wants to deepen Alaska’s relations with China even as tensions rise between the U.S. and China over trade and concerns on North Korea and the South China Sea.

Walker announced a state trade mission to China set for May 19-24 that will include Alaskan businesses hoping to do deals there. The governor, state Director of International Trade Shelley James and Commerce Commissioner Mike Navarre will be on the trip along with business leaders selected to participate.

Private firms will pay their own way, Walker said. The state is charging a $3,000 “participation fee” and private parties along for the trip will pay for their own airfare, lodging and meals.

The trade initiative follows a refueling stopover in Alaska last spring by China’s president Xi Jinping, with talks with Walker and other Alaskans officials during the stop. There were also agreements signed later in the year on negotiations for Chinese firms to buy Alaska liquefied natural gas, or LNG, and invest in a North Slope gas project. Those are now ongoing.

“The visit to Alaska last spring by President Xi and members of his cabinet has opened up a lot of dialogue,” for an array of other relationships including tourism, aviation and education, Walker said.

The governor wasn’t concerned about President Trump’s increasingly aggressive stance on trade and his announcement of tariffs on certain imported goods including steel, which prompted sharp criticism from China.

“President Trump’s concern is over the trade imbalance, and that’s what the tariffs would address. But everything that goes from Alaska to China reduces that imbalance,” Walker said at the March 5 press conference.

Keith Meyer, president of the state-owned Alaska Gasline Development Corp., said the announced tariffs on steel imports would not have a substantial adverse effect on the Alaska LNG Project, which AGDC is leading.

Even though the project would require about 800,000 tons of steel, most of it imported, Meyer said much of Alaska LNG’s cost will be in equipment and labor rather than the steel pipe.

Walker said Xi extolled Alaska’s scenery during his stop and talked about tourism. “We see Alaska as our Shangri La,” for visiting, Xi told Walker at the time. “You will be seeing an uptick in tourism,” from China, Xi told Walker, according to the governor.

Julie Saupe, director of “Visit Anchorage,” the local visitor promotion organization, said her group has seen a definite increase in tourism-related inquiries recently but couldn’t quantify if, or tie it to Xi’s remarks.

“We’ve been reaching out to the China market since 2005,” she said.

The most tangible result to date of warming Alaska-China relations, besides the LNG talks, are 20 scholarships for Alaskan students to study in China announced in February, Walker said.

Four scholarships will be awarded each year for five years for Alaskans to study in Chinese universities. There is a shared interest in environmental science and fisheries in both nations and Alaska’s has an established leadership in climate change studies, in area in which China is now deeply interested in, as well as issues related to the Arctic.

Other relationships are being cemented. China is preparing for the 2022 winter Olympics, which will be held there. Bob Onders, president of Alaska Pacific University, sees a big potential for China’s winter athletes training in Alaska, particularly for Nordic ski events, training for which APU excels.

The availability for summer ski training on Eagle Glacier near Anchorage, where APU’s athletes train, could be a big draw, Onders said.

Jim Szczesniak, manager of Ted Stevens International Airport in Anchorage, said new aviation partnerships with Chinese airlines could open up new tourism not just with Alaska but the Lower 48 as well.

Szczesniak and other state officials are working on a concept for adapting the “Icelandic Air” model for Alaska and Asia, he said. Icelandic has developed a good summer passenger business flying Alaskans to Europe with a stopover in Iceland, bolstering that nation’s tourism industry.

Alaska could do the same, Szczesniak said, with Asian air carriers bringing passengers to Alaska where they could stop for several days and then continue on to Lower 48 destinations on U.S. carriers from Anchorage.

This would ease a problem for Asian carriers with aircraft and pilot shortages in flying long distance direct flights to the Lower 48 and getting gates at major airports, he said. A China-Alaska flight can be done with fewer pilots because it is a shorter distance. Plus, there is less congestion at U.S. Customs and immigration than at U.S. airports like Los Angeles and Chicago.

China is already the top foreign customer for Alaska export goods. Last year, Alaska exported $1.32 billion worth of goods, including $796.2 million in seafood and $64.6 million in fishmeal, employing thousands of fishermen here. Alaska also exported $355.8 in mineral ore, $49 million in energy, and $48 million and $5.9 million in forest products and machinery respectively.