Mat-Su Borough officials meet with Chinese economic advisors

Talk about timing: Just as a U.S. China trade war looms, Gov. Bill Walker landed in Beijing May 21 accompanied by Alaskans with stuff to sell.

The Chinese quickly grabbed the opportunity to make at least a small dent in a huge U.S. trade imbalance between the Asian giant.

By a stroke of luck, Walker’s first meeting on arriving in Beijing was with China’s Vice Premier Liu He, who had just returned from trade meetings in Washington, D.C.

Liu has become China President Xi Jinping’s chief economic advisor and negotiator in the trade talks, and is in a key position to move Alaska-China trade relations along, particularly the potential exports of Alaska liquefied natural gas.

Meanwhile, David McCarthy and Jason Motyka of 49th State Brewing Co., two Alaskans on the trip, want to make sure the Chinese are drinking some good Alaska-made beer while rebalancing the trade deficit.

McCarthy and Motyka are working on a plan to ship their beer by air to serve a fast-growing craft-beer culture in China. “The seven and a half-hour flight is just long enough to keep our product fresh and chilled,” Motyka said at a June 6 press conference convened by Walker with Alaska and who went on the trip.

“The ‘Alaska’ brand means a lot in China. It’s seen as a mysterious place,” Motyka said.

49th State has just built a new beer-making plant in Anchorage that has excess capacity, and the ability to export barrels of brew will allow the company to use the capacity, Motyka said, although the plant is mainly intended to serve the Alaska market.

China has a large, well-established domestic beers but as the country prospers and its demographics change, younger consumers want to try something new.

Alaska’s new organic baby-food startup, Bambinos Baby Food, also struck a strong chord, said Zoi Maroudas, Bambino’s CEO, who was along on the trip. “This is an opportunity to introduce pure, natural products, and help nourish healthy babies in China,” Maroudas said.

Bambinos is ant the micro-size now as an Alaska startup but the governor noted that the Chinese appear anxious to want help small Alaska firms grow to be able to meet their customers’ demands. China Investment Corp., the nation’s huge sovereign wealth fund, has already met with Maroudas on ways of helping Bambinos develop.

Chinese consumers are sensitive over food quality, particularly baby food, after a series of scandals over contaminated food.

Matanuska-Susitna Borough Assemblyman Randall Kowalke and Borough Manager John Moosey on the trip, too, and appeared at the Thursday press briefing. Moosey said he and Kowalke had two objectives, one being to make sure the potential Chinese partners in the Alaska LNG Project were aware of the borough’s Port MacKenzie its ability to efficiently support construction of the giant $43 billion project.

Secondly, the two wanted to check out the China operations of a New Zealand company that is a potential purchaser of timber from Mat-Su.

Moosey said he was struck by comments from Chinese finance groups that there could be huge savings for the Alaska LNG Project if the LNG export plant were built at Port MacKenzie rather than at Nikiski, on the Kenai Peninsula.

“Their bankers are well aware of this potential,” Moosey said, even if the Alaska LNG Project itself, which is led the state, doesn’t seem to be.

State Rep. Andy Josephson, D-Anch., was along on the trip to learn more about the potential for Alaska resource exports and also to do his own due diligence on the pending deal with Chinese companies to purchase liquefied natural gas from Alaska and perhaps invest in the Alaska LNG Project.

Josephson met with Sinopec, Bank of China and China Investment Corp., Alaska’s three main Chinese partners, and came away impressed with the depth of knowledge of the Alaska project they exhibited.

“They are asking very tough questions, such as the durability of agreements with the three major North Slope gas producers to supply gas to the project, and the status of the Federal Energy Regulatory Commission’s procedures,” Josephson said.

Josephson co-chairs of the House Resources Committee in the current Legislature, a panel with a direct responsibility to review the project, which is now led by the Alaska Gasline Development Corp., the state gas corporation.

Trident Seafoods’ Stefanie Moreland and Lindsey Whitt, External Affairs Manager for Matson Navigation, were on the trip and were at the Thursday briefing.

Trident is a major Alaska seafood company with an established presence in the China market. In spite of that, Alaska’s reputation as a source of high-quality seafood needs to be constantly reinforced, she said.

Whitt said Matson hopes to develop new seaborne trade, and a direct Anchorage-Shanghai shipping route is being explored.

“I was honored to lead this trade mission and watch so many Alaskan leaders work to grow their businesses and bring jobs home,” Governor Walker said. “Perhaps what impressed me most was the consistent push to build an Alaska brand that makes the world realize the quality of our fresh seafood, the natural beauty of our state, and our many opportunities for economic growth.”

Alaskans on the trip attended more than 25 meetings in Chengdu, Beijing, Shanghai, and Hangzhou. While in Beijing, several from Alaska met with JD.com, the world’s third-largest internet company by revenue, with 900 million users, and also traveled to Hangzhou to meet with Alibaba Group, the world’s largest retailer.

These visits underscored opportunities to increase sales of Alaska seafood, beer, travel packages, and baby food directly to Chinese consumers.

Walker said an intriguing possibility is an Alaska-China link in helping train athletes for winter sports including the winter Olympics planned for China in 2022. Members of the Alaska group met in Beijing with China Sports Minister Guo Zheng, who oversees China’s Olympic team. This discussion has already led to agreements for the Chinese downhill ski team to train at Alyeska Resort and for their cross-country ski team to train at Alaska Pacific University facilities. Follow-up meetings will take place this month in Alaska.

Walker is also keen to promote direct flights between Alaska and China to facilitate growing Chinese tourism. “Just as the cruise industry has brought huge economic opportunities to coastal Alaska communities, direct flights will provide the benefits of new, diverse tourism statewide,” the governor said at the Wednesday briefing.

Alaska is still new getting into the Chinese market, although Alaskan firms have sold seafood and timber to Chinese buyers for years. “Chinese companies have 1,500 deals in 50 states of the U.S. but only three of these are in Alaska,” the governor said.

“As a result of this trip we’re working our way up,” he said.