Walker touts trade relations with China after gasline talks

  • Alaska Gasline Development Corp. President Keith Meyer discusses LNG demand in Asia during a presentation to Commonwealth North on Aug. 25 in Anchorage. After inking a nonbinding joint development agreement with three Chinese-owned companies over the Alaska LNG Project, Gov. Bill Walker said the relationship built over those talks could boost trade for other Alaska exports. (Photo/Andrew Jensen/AJOC)

Gov. Bill Walker is hopeful the inroads his administration has made with top-level officials in the Chinese government through cooperation on the Alaska LNG Project can be parlayed into partnerships for other industries.

The governor outlined his plans to bolster Alaska-China trade during a Nov. 21 press conference mainly focused on the state’s gasline Nov. 9 agreement with three government-owned Chinese companies.

The non-binding joint development agreement sets an outline for Sinopec, the world’s largest integrated oil and gas company, to purchase up to 75 percent of the LNG from the Alaska LNG Project. The Bank of China and the China Investment Corp., the country’s $813 billion sovereign wealth fund, would finance and directly invest in portions of the $40 billion megaproject.

Walker described the gasline work, which included Alaska Gasline Development Corp. President Keith Meyer in the country for at least six weeks this year, as “just the beginning” of growing trade with China.

“The relationships we have built at the highest level in China can benefit many other areas of business in Alaska,” Walker said.

If Alaska is to expand its business dealings with China, it will undoubtedly be helpful that the most-populous country on Earth is already the state’s largest foreign trade partner.

Alaska companies exported nearly $4.4 billion worth of goods and raw materials last year, of which almost $1.2 billion worth went to China, according to the state Office of International Trade.

A broader trade mission to China coordinated by the International Trade Office is being planned for sometime next year, Walker said, but the details are still being worked out.

Japan is the state’s next largest export destination. The country bought $816 million of Alaska products in 2016, followed by South Korea at $730 million.

The 2016 export values were all down to varying degrees over prior years; however, because Alaska exports are primarily seafood and other raw materials or commodities with often-volatile market pricing, the year-over-year value of the goods is not always indicative of the amount sold.

The state’s total exports have grown substantially in recent years from just more than $3 billion in 2009, according to the International Trade Office.

Walker said his team’s discussions with Chinese leaders, including China President Xi Jinping, that led to the Alaska LNG joint development agreement also touched on the state’s additional potential offerings. Xi met with Walker this past April in Anchorage as he passed through on a refueling stop heading home after meeting with Trump in Washington, D.C.

“We talked to them about other resource we have and they’re certainly interested in other resources in Alaska. Certainly interested in oil; very interested in mining; but they said ‘let’s get the gas one taken care of first,’ and I couldn’t agree more,” Walker said.

Aside from possible direct investment in the Alaska LNG Project by the China Investment Corp., members of the Walker administration have said Chinese companies are also potential upstream investors in North Slope oil projects.

At $2.1 billion, seafood was the Alaska’s top export overall in 2016 and similarly was the top single export to China, valued at $626.3 million, or more than half of the state’s total exports to the country.

The Alaska Seafood Marketing Institute estimates that 80 percent to 90 percent of the state’s exports to China are reprocessed and sent on to Europe and Japan, which are the top final consumption destinations for Alaska seafood.

China also imported $321 million of Alaska minerals last year, a close second to Canada, which bought $323 million of minerals from Alaska.

Additionally, China dominated the market for Alaska timber; it bought nearly $75 million worth of forest products from the state in 2016 out of $98.6 million of total timber exports for the year, according to the Trade Office.

The vast majority of timber exports currently consist of shipping whole “saw logs” because Alaska’s large lumber and pulp mills used to refine forest products have closed as the state’s timber industry has declined.

And beyond traditional table-fare seafood, the Chinese also bought $53.8 million of Alaska fish meal products, which again accounted for roughly half of the total $110 million export market.

While Alaska’s business with China has historically been in traditional goods, Walker noted the growth in the country’s middle class could bode well for the state’s tourism industry, one of the few growing sectors of the Alaska economy.

“1.4 billion people in China, of which 100 million a year go on holiday. Boy, we sure would like to get a slice of those going on holiday to come to Alaska,” Walker commented.

According to the state Commerce Department, approximately 23,000 Asian travelers came to Alaska last year, accounting for only about 1 percent of the roughly 2 million visitors to the state overall. Of those, about 5,000 were from China.

Walker said state officials are also working on getting direct scheduled flights between Asia hubs and Alaska to encourage more tourism here.

Japan Air Lines has operated charter flights between Tokyo and Fairbanks since 2004, but those flights are in winter and part of group tours planned specifically for aurora viewing.

Attracting more international tourists to Alaska could also mean bringing disproportionately more money to the state.

The average Alaska visitor spent $1,057 once in the state, while international travelers — Canadians excluded — spent $1,322 per person in Alaska and those coming from Asia spent $1,442 during their stay, according to the Commerce Department figures.

Elwood Brehmer can be reached at [email protected].

11/29/2017 - 10:16am