U.S. trade with China is growing, despite concerns over the SARS virus, which is limiting business travel between the two countries. China has replaced Japan as the top trading partner for the busy U.S. port of Los Angeles.
Two-way trade with China through the Los Angeles port jumped 20 percent last year to $55 billion, while trade with Japan fell eight percent. The shift is important, says Jack Kyser of the Los Angeles Economic Development Corporation, because the city has the busiest customs district in the United States and it processes most U.S.-Asian trade.
The analyst says Canada and Mexico are the leading U.S. trading partners, but China is rapidly gaining on Japan for the number three spot. A look at the two economies shows why the shift is occurring.
"China is growing very rapidly," explained Mr. Kyser. "Government is pushing it along, and they are rapidly becoming a major manufacturing platform, not just for low value goods, say like footwear, but they're rapidly moving up the manufacturing ladder."
Meanwhile, Japan's economy continues to struggle.
A new trade report by the economic development organization says electrical machinery is the largest import at the Los Angeles port, followed by motor vehicles. Top exports include electronics and aerospace parts. The joint port of Los Angeles and Long Beach is the third busiest in the world, after Hong Kong and Singapore.
The report sees a possible dark spot on the horizon for U.S.-China trade, as China struggles to contain SARS, Severe Acute Respiratory Syndrome. But Jack Kyser notes that so far SARS is more of an annoyance than a threat to business.
"Although companies are very, very nervous," he said. "What you've found is a lot of firms have stopped sending people on business trips to China. They doing tele-conferencing, and they're sending samples back and forth via UPS and FedEx."
Express delivery services cannot replace personal contact, points out Charlie Woo, whose company, Megatoys, is one of the largest toy importers on the U.S. West Coast.
"Obviously, the inability for American buyers like us to go visit China and go to different trade fairs and talk to different suppliers, it's creating a problem," he said. "But my biggest concern at this moment is, if SARS continues to spread, the factory workers might be infected."
If that happens, he worries the Chinese government may close plants temporarily. He added that restrictions already in place on the movements of Chinese migrants, who work in factories during busy seasons, could hurt industries like his, which rely on Chinese products.