By BENJAMIN MARK COLE
Contributing Reporter
Trade with China is booming, spurring growth for a broad spectrum of businesses throughout Los Angeles ports, shipping lines, financiers and importers and exporters of Chinese goods and services.
Some of the players are not even commercial enterprises, such as local universities. Many Southern California colleges attract Chinese students, who pay for educational services a form of trade and later start up businesses. And many of those businesses establish ties back to China.
Perhaps the most visible participant is the Port of Long Beach, which handles 32.8 percent of all trade between the two nations (based on dollar value), more than any other U.S. port, according to Global Trade Information Inc.
A close second to Long Beach is the Port of Los Angeles, owned and operated by the city of Los Angeles. It handles 31.5 percent of trade between China and the United States (meaning that nearly two-thirds of all goods moving between China and the United States come through local ports).
(The figures do not include air freight, but the vast majority of trade between China and the United States is by sea, said trade experts.)
Big shipping lines steaming between China and the United States are, of course, huge players in the process. They include Singapore-based APL Ltd., Taiwanese giant Evergreen Line and Japan-based NYK Line, said Barbara Yamamoto, Port of L.A. spokeswoman.
There is one way in which China-U.S. trade is vastly different from commerce within the United States all goods crossing the U.S. border must get a green light from the U.S. Customs Service. Customs has its Southern California headquarters at the Port of Los Angeles. The agency also keeps officers at the Long Beach port, Los Angeles International Airport, Port Hueneme, and Las Vegas Airport.
In all, customs employs 800 officers at the five ports of entry. It is the job of customs to collect tariffs where appropriate, and make sure countries are not exceeding their trade quotas, said Ed Webb, customs director of compliance, in charge of the Port of Los Angeles and Long Beach.
“There are 600 laws which apply to imports, and it is our task to make sure imports are in compliance with applicable laws and regulations,” said Webb.
His office also checks exports, usually to make sure shipments comply with laws that restrict the transfer of high technology to certain nations. It is illegal to export some technologies to China, including those that have military applications.
In the event the U.S. cracked down on imports from China for violations of U.S. copyright laws, or for human rights violations, it would be customs that would halt or impound goods at the port of entry, said Webb.
On the American side, one major importer of Chinese goods buying everything from hammers and pliers, to bath mats and plastic pails is Los Angeles-based Concord Enterprises Inc., which maintains a Web site replete with a 200-page catalog of imported goods, primarily from China.
The company, which employs more than 50 people, is a wholesale supplier to discount stores, drugstore chains, closeout stores, and other retailers looking for relatively inexpensive goods.
One of the more prominent importers of Chinese products is El Segundo-based Mattel Inc., the house that Barbie built. Many Barbie dolls are made in China, although Mattel is tight-lipped about actual production levels. Mattel has been embarrassed by press reports that described very low pay and harsh on-site living conditions at Barbie-doll plants in China. The company has issued press releases stating that the problems have been cleaned up.
Another large importer is Megatoys Inc., near downtown Los Angeles, which brings in about $30 million worth of toys a year from China. “I came here 19 years ago, to get my Ph.D in physics from UCLA,” said Megatoys’ owner Charles Woo. But family exigencies required him to seek income, and he wanted to avoid going into traditional immigrant activities of retailing or restaurants.
“Importing is something you can do that is not 24 hours a day,” he said.
Woo’s story is repeated hundreds of times over, if not always on such a grand scale. “An often unrecognized, but very important part of U.S.-China trade is the large number of Chinese students that are here, at USC, at UCLA and at many other schools here,” said Richard Drobnick, USC trade expert and professor at the Marshall School of Business. “Not only do they pay tuition, rent housing, buy clothes and food, they often stay here and start businesses, and act as links back to the mother country.”
At USC alone, there are more than 1,000 students who either come directly from China or are ethnic Chinese from other Far East nations, and who are candidates to try their hand at importing or exporting goods and services in the future.
The lifeblood of importers is financing, as accepting receivables from overseas and the risk of non-payment is often great.
Woo goes to San Marino-based East-West Bank, but other banks such as Cathay Bancorp in downtown L.A.’s Chinatown district and GBC Bancorp in downtown are also very active in China-U.S. trade.
The Trade Bank is joint venture between San Francisco-based Wells Fargo Bank and Hong Kong Shanghai Bank, one of the world’s largest banking groups. Downtown Los Angeles-based Sanwa Bank California also maintains a 75-employee office geared to Pacific Rim trade, according to Keith Karpe, Sanwa spokesman.
While hard figures are not at hand, William Snyder, vice president of international finance at Sanwa, said the bank’s volume of business with Chinese importers and exporters has been growing rapidly.
