Kentucky governor unabashed about China deals

Kentucky Governor Matt Bevin likes to spruce up his talks with quotations from historical figures like inventor Thomas Edison, as well as Chinese sayings, drawing on his background as an Asian studies major.

Quoting from Edison that "opportunity is missed by most people because it comes dressed in overalls looking like hard work", Bevin said Kentucky is "seizing opportunity" and taking the lead in strengthening ties with China by staging one outreach after another, for "the longest journey begins with a single step" – as a Chinese proverb goes.

In less than a year, Bevin has led a trade mission to China, being the first US governor to attend the inaugural China Import Expo in Shanghai, and hosting a China-US governors' summit in his state. He even threw a New Year's party for Chinese students at the governor's mansion in Frankfort in February.

"Even if other states are afraid or uncertain or want to wait, Kentucky will lead the way," Bevin told China Daily at the Kentucky Capitol.

"I can't control the national-level conversation, but I can be part of the solution at the subnational level," he said, referring to the fact that the world's top two economies are locked in a protracted trade dispute, which Beijing and Washington have pledged to resolve with yet another round of talks scheduled for October.

Bevin, who earned a degree in East Asian studies 30 years ago, said he had studied the region and "fallen in love with that part of the world", with a good appreciation of the cultural differences between East and West.

While Americans usually prefer quick actions and results, "you have to be more steady, patient, develop relationships and earn respect" with the Chinese, according to Bevin.

"What I want to do is strengthen our relationships, build friendships and partnerships. And then when that happens, good things will come," he said.

Under the Republican governor, Kentucky's exports to China increased by 60 percent in 2017, to an all-time high of $2.81 billion, then slowed to $2.23 billion last year, partly due to the trade dispute, according to statistics provided by the Kentucky Cabinet for Economic Development.

But Chinese investment in The Bluegrass State has turned from a trickle to a flow.

"When I was elected just three and a half years ago, there were two Chinese-owned companies in Kentucky. And now there are 14 or 15, and others that are looking to come," he said.

Early last month, Chinese-owned manufacturer Phoenix Paper Wickliffe announced plans to invest $200 million in Ballard County to launch a paper-and-pulp recycling facility, creating 500 jobs in western Kentucky.

Altogether, Chinese companies employ nearly 9,000 Kentuckians, including 6,000-plus employees at GE Appliance Park in Louisville and 1,600-plus at Lexington-based manufacturer Lexmark.

"And we also have another half-dozen companies that are already committed to hiring another 680 people to come here," Bevin said, adding that over the past three and a half years, the state has attracted a record of more than $20 billion in private capital from foreign countries.

"But it's not by accident. It's because we are going out," he said.

There have been missed opportunities because of misunderstandings or a lack of understanding between countries, Bevin said.

He quoted a Chinese idiom, yugong yishan, which tells a well-known fable from Chinese mythology about the virtues of perseverance and willpower.

Yugong, a foolish old man, was annoyed by the obstruction caused by the mountains in front of his house and sought to dig through them, believing that though he could not finish the task in his lifetime, through the hard work of himself, his children and their children and so on, someday the mountains would be removed.

"There's a big mountain of cultural difference" between the East and the West that needs to be removed through unyielding engagement, Bevin said.

"What I'm trying to do is disprove some of the misunderstanding and help to elevate, and to show that there's opportunity," he said.

"We're not afraid of opportunity. We're seizing opportunity. It does look like hard work. It is dressed in overalls, but we put our overalls on, we go out, we do the work and good things are happening," he said.

Late last month, the Kentucky Cabinet for Economic Development sent a business delegation to the Smart China Expo in Southwest China's Chongqing municipality, a global summit for business leaders and innovators at the forefront of revolutionizing innovation.

This will be followed by another team traveling to China "in a couple of months", according to Bevin.

The governor touted a long list of Kentucky's advantages as a top investment destination, including the quality of the workforce, the low energy costs, a location within a day's drive of two-thirds of the US population and having major delivery hubs operated by DHL, UPS and Amazon.

At a time of uncertainty in the world, Kentucky is a safe place for people to invest, he said.

Bevin, a Republican who is seeking reelection, said he wants to focus on "more of the same" in Kentucky if he has four more years, like getting Kentucky's financial house in order, addressing financial obligations and investing in infrastructure to the "highest levels of quality".

"It will be four more years of what we've been doing. But I think they will be even more powerful," he said. "Because when I see us going from two companies to 14 to 15 companies from China in just three years, I think four years from now 50 companies, 100 companies, why not?"

The governor said he has full confidence that the outstanding issues, including intellectual property protection, will be fully addressed at the national level.

"This is the conversation that our ambassador (US Trade Representative Robert) Lighthizer and his team are having with his Chinese counterparts; they will work this out, they will need to, because our two nations are better together, and we are both weaker if the other is in trouble," he said.

"As soon as we have a trade agreement between our nations, it will be unleashed," he said, referring to bilateral trade and investment, both of which have contracted and slowed.

"I'm putting up my sail even though I'm out on a calm sea. And the economic wind seems to have slowed down, maybe to a halt. I'm still putting up my sail, because when the wind starts to blow, I will be ready. Kentucky will be ready," he said.