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Growing China trade: silk, spices give way to sneakers and soap

The romantic image of the "China trade" is tea, silk, and spices. The reality of the trade is tennis shoes, jogging pants, and toilet soap. These and dozens of other mundane light industrial product are coming into the United States from China in increasing numbers as the trade between the two countries settles into a normal pattern.

It has been about one year since China was granted most-favored-nation status , drastically reducing tariffs on many products -- and trade has shot up.

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The figures from the Port of Portland alone, where general cargo ships from the state-owned China steamship line began calling a year ago, tell the story.

Chinese exports to the US increased from about 2,000 short tons in 1979 to nearly 30,000 in 1980. Exports to China through the port increased from 70,000 tons to more than 500,000 tons.

The Chinese buy mainly wheat, logs, cattle hides, aluminum, and machinery from the Pacific Northwest, plus cotton and soybeans from other parts of the country.

The list of Chinese exports to the US reads like the inventory of a department store's bargain basement: cotton pillowcases, wooden skewers, mushrooms, feathers, toilet soap, hand tools and nails, women's cotton blouses, and wooden mufflers to name a few.

February and March were unusually busy months for the China trade on the West Coast. Here at Portland two general cargo ships arrived, one half-loaded with peanuts to help ease the peanut shortage in this country.

Also in February the Chinese began regular container service to the US aboard the first of China's new roll-on, roll-off ships.

The first of this class, the Chang Jia Kow (built in 1980), carried 700 containers of cargo from Tianjin and Shanghai to San Francisco. It returned to China with cotton and equipment for a US-sponsored bakery being built in Peking to help encourage wheat exports to China.

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The Chinese are pushing exports to the US now, in part to close a large trade deficit and to earn foreign exchange needed to pay for imports.

China's decision to devalue the yuan earlier this year also has helped to make its exports to the US cheaper.

In fact, Chinese exports are becoming numerous enough in this country to cause some concern in official circles, since most are light industrial products that could stirpolitically sensitive US interests.

The US and China have negotiated quotas on textiles, but many other products are shipped to the US without restraint.

"The Chinese have the ability to make a lot of tennis shoes," noted a staff member of the Office of the US Trade Representative. This official recently visited Peking to try to caution the Chinese of the sensitivity to some of their exports.

"We expect them to grow, but they need to follow a prudent export policy," he said.

Indeed, the Chinese already may be having an impact in some areas, while in others the impact may come later. Last year, for example, they exported a grand total of five bicycles to the US. They obviously have the capability to make them by the millions and, with a little retooling, could easily become a factor in the US bicycle market.

In the Pacific Northwest, where exports of logs to foreign countries are especially sensitive, the Chinese have caused some concern by starting to buy raw logs.

The trade began in May and has been increasing. Experts believe the Chinese will have purchased about 100 million board feet of logs from Washington State and Oregon in 1980 and may purchase an equal quantity this year. (A board foot, equal to a board one inch deep, 12 inches long, and 12 inches wide, is a standard unit of forest products measurement.)

Although insignificant alongside Japanese log purchases, which were more than 2 billion board feet in 1980, the recent Chinese purchases are becoming controversial, especially among those who want to ban all such exports.

"We see it as a further threat," said M. J. Kuehne, president of the Northwest Independent Forest Manufacturers, a group representing small to medium-size sawmill operators in the region.

"The Japanese say their log-buying will recede, but that slow recession may be more t han made up by Chinese purchases," said Mr. Kuehne.

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