Business Beyond the Reef

U.S. International Trade Commission

Wow!  I’m impressed.  Government studies often help me to take a nap, but here is one that has some eye-popping stuff in it.  The U.S. International Trade Commission has released the second in its series of studies about exporting by U.S. Small and Medium-sized Enterprises (SMEs).  I know, that sounds like a snoozer, but bear with me.  The first ITC report, released in January and reported upon here, was a scene-setter that examined the scope and role of SME exporting in the context of overall U.S. exports.  The major conclusion was that most SMEs sell to only one foreign customer in one foreign market, usually Canada, so there is beaucoup room for improvement.

The new report looks at specific issues faced by SMEs and compares U.S. programs and conditions with those our European Union competitors use to help their small companies.  There is so much meat in the report that the executive summary takes up a full eight pages.  I’ll attempt to hit the major points here, but I suspect I will draw on the ITC report for several more posts in coming weeks.

The ITC begins by disposing of a semi-myth, that SMEs are far more prominent in the European Union’s exports than in those of the United States.  That’s true, as far as it goes.  Using 2005 data, the latest comparable, SMEs sold 31% of the EU’s manufactured exports but only 13% of America’s foreign sales.  They say not to make too big an issue of this, however, because the U.S. market is so large and well integrated that America has tended to grow more big companies than has the EU, thus it is no surprise that big companies dominate our exports.  I agree with the impact of a large integrated economy, but I know from personal experience that the Eurocrats have being doing everything possible to grow Europe’s SMEs into something larger.  Both in meetings in Brussels and at a conference about SMEs in Copenhagen, Eurocrats made it clear to me that, in their opinion, being small is a disease and that Brussels has the doctors to cure it.

I was surprised to see the ITC’s conclusion that U.S. financing for SME exports is no worse than in Europe, given the moaning I hear from small U.S. companies.  In fact, U.S. pre-export and short-term credit appears superior to what the Europeans are doing for their firms.  European exporters, however, may have better access to help in foreign markets – and far better support for participation in international trade shows.  (I have seen EU exporters laugh out loud when they hear how little official assistance is available to Americans at trade shows.)  The ITC also notes that European countries attact foreign investors with a view to building new export industries, something the U.S. Government cannot do because investment promotion is largely the preserve of individual states and cities.

There is a major difference in the structure of U.S. and European SME exports.  In Europe most SMEs do their own exporting, while American SMEs tend to sell their product to middlemen who then do the exporting.  I interpret this as part of our firms’ absorption in the huge North American market, though I suspect it also reveals a lack of willingness to take on the perceived risks of exporting.  If you can sell most or all of your product in a market you thoroughly understand, then you are less likely to take on markets you don’t know.  That’s understandable, if perhaps short-sighted.

The ITC then looks at barriers to exporting.  Most SMEs, anywhere, have difficulties with obtaining good and sufficient financing.  Their size makes them appear higher risk to the  banks, and a focus on foreign markets makes them seem even riskier to the green eye-shade people.

The U.S. Government sets up its own barriers to SME exporting.  Export controls are front and center due to their complexity and immense paperwork.  Visa issues are equally important, hindering efforts to bring potential buyers to the United States for contract talks or for training, and for stopping immigration of specialized foreign workers that a company might need.  SMEs also complained to the ITC about poor coordination among government agencies and unnecessary tariffs on inputs they need for production.  I wrote about the latter last week before beginning to read the new ITC report.

Transport costs are a big issue, especially the relative lack of availability of containers on the West Coast.  Foreign regulations are a huge hindrance for a small company that lacks the staff to fully understand and ensure compliance in multiple markets.  IPR protection is a big concern, especially for those SMEs trying to do business in China.  Ditto delays at foreign ports for perishable products, such as foodstuffs or pharmaceuticals.  Increasingly U.S. SMEs see “unfair” competition from foreign competitors who benefit from free trade agreements their governments have negotiated, while the United States remains inactive in FTA negotiations (is anybody in the Democratic leadership listening?).   Language and cultural issues, and limited knowledge of foreign markets, are yet more consequences of our over-reliance on our huge domestic market.

What do American SMEs do to overcome these reasons not to export, and what does the ITC recommend?  Check in again tomorrow.

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Oh, Sunday was fun!  We had an outrigger paddling regatta at Waikiki, right in front of the Outrigger, the Moana and the Royal Hawaiian.  What a setting!  And the waves were great, though boats were swamped or flipped in most every race.  My first race was the men’s 60s.  We powered our way out through the surf, taking big hits from the waves but surviving.  We made perhaps our best turn of the season at the quarter-mile mark, then accelerated back to the finish line at the beach, riding the surf much of the way.  There is an art to riding waves and breaking surf.  The acceleration is exhilarating and a good crew can stay on a wave for a long ride.  We were good Sunday and finished a strong second.

My second race, the mixed 55s, was even more exciting.  We never even made it to the turn.  I was stroking (that’s the first seat, the paddler who sets the pace), and we got hit three times in succession by big waves.  We kept going and were moving fairly well, though the boat was full of water.  Then I saw the monster.  Had to be twice the size of the others.  I shouted to apply all the power we had, but it was no good.  I was knocked into the lap of the second paddler (a rather petite woman) and then, in an instant, our canoe was upside down.  Our race was over and our focus turned instantly to making sure everybody was safe and unhurt.  Jetskis got us safely back to the beach and towed the boat in.  Our coach, standing on the beach, told me he saw that fourth wave and knew we didn’t have a chance.  Exciting!

But can it float?

It strikes me, not for the first time, that Beijing has no confidence in its own currency.  Not to mention the ability of China’s exporters or the resiliency of the Chinese economy.  That seems strange, given the demonstrated strength of the economy and the growing international experience of Chinese companies.  But what else can explain Beijing’s seemingly schizophrenic currency policy?

We hear periodic diatribes from Beijing about how the U.S. dollar is long in the tooth and should be retired as a reserve currency or even as a currency for trade transactions.  It is always implied that the yuan should be the new reserve currency, or at least an important part of a basket of reserve currencies.

And yet the yuan has yet to prove itself as an internationally viable currency.  Why criticize the dollar when the yuan is effectively pegged to the dollar?  (Yes, there is a bit of movement allowed, but not enough to notice.)  And how can Beijing claim the yuan is an internationally accepted currency when it doesn’t even allow free use of the yuan by its own traders and companies?  This was highlighted in a Wall Street Journal article yesterday about China’s “trial program” to allow trade settlements in yuan.  Beijing has had such a lack of confidence in its own currency that it has not been allowing even Chinese companies to settle transactions in the yuan.  Now they are beginning to experiment with using their own currency.  If this is still a “trial program”, why should the rest of the world have any confidence in the yuan?

I am also mystified that the “trial program” only applies to “most” of the country, apparently twenty provinces and cities.  Isn’t this something like allowing New York to trade in dollars while telling Rhode Island to try another currency?  It passeth understanding.

Perhaps due to the trial nature of the yuan program, or perhaps for competitive reasons, very little trading is going on in the yuan.  Using the odd period of July 2009 through May 2010, the total value of yuan-based transactions was about $6.5 billion.  If you consider that China’s imports and exports were more than $1 trillion in the first five months of 2010, the value of yuan transactions is trivial.  If the yuan is trivial in China, why should the rest of us care?

Aside from the question of whether or not the yuan is properly valued, no one should take the yuan seriously until it is allowed to float freely and has done so successfully for several years.  China has much to gain from flotation.  If the yuan is truly overvalued, then floating it will help China to contain its inflation by reducing the relative cost of imports.  If it should prove to be undervalued, which I doubt, then China’s currency critics will have been stiffled.  And, by dropping the peg to the dollar, Beijing’s economic policies and the value of the yuan will no longer be dependent on the decisions of the U.S. Federal Reserve – which cannot reasonably be expected to take China’s interests into account.  Or perhaps the Middle Kingdom now prefers to be monetarily governed by Ben Bernanke?  One wonders what Confucius would say.

• Business Beyond the Reef received a good review this week from friend Alex Olah, a former Australian trade commissioner, who told his readers:

“If you want to follow the ins and outs of US international trade policy and developments I can highly recommend a look at Steve Craven’s blog. Steve was head of the Commercial Section of the American Embassy when we were stationed in Singapore in the mid-1990s, and we have kept in touch over the years.

After a distinguished career with the US Department of Commerce, Steve (& Donna) retired in Honolulu where he acts as a guru on international trade matters when he is not racing dragon boats or paddling around the Hawaiian Islands.

If you like your international trade served with generous helpings of wit, insight and candour, have a look at Steve’s blog.”

High praise, indeed.  Mahalo, Alex.  Alex and his wife have spent almost a year teaching English in China and he has written a magnificent diary of their experiences that I am encouraging him to publish.  I’ll let you know if he does.

• Political buying power.  That’s what China is using to woo Taiwan, according to a June 2 article in Asia Times.  The opposition DPP party charges that China is sending provincial procurement officers to buy in Taiwan and thereby gain friends and supporters among Taiwan’s business community.  China’s provinces are said to be buying flat screen TVs and monitors, biotech pharmaceuticals, cosmetics, chemicals, electronics, textiles and more.  Shandong Province is said to have spent $620 million in Taiwan last month, and Hubei has ordered more than $25 million in Taiwanese goods.  Seems cheap if political influence is being bought.
• Remember the ballyhoo about a year ago when seemingly everybody was predicting the end of the U.S. dollar’s status as a reserve currency?  Some wanted the Euro, others promoted a basket featuring the Euro and the Yuan.  All is silence now.  The South China Morning Post even published an article this week about how China’s exporters, many of whom had switched their billing to the Euro last year, are now quietly, but quickly, moving their accounts back to the dollar.
• Take a look at my friend Jargalsaikhan Dambadarjaa’s blog post on business ethics.  Jargal is a Mongolian businessman with long experience in the United States.  I found it an interesting read.

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I hope to be back to regular blogging by next Tuesday or Wednesday.  Our travels have taken us to Wooster, Ohio – where our daughter delivered our first grandchildren last night.  That’s right: grandchildren, plural.  Twins, one boy, one girl.  The girl, Rosie, was born just before midnight, with the boy, Brack, not putting in his appearance until nearly two hours later – so our twins have different birthdays!

Mom and babies are due to come home Sunday.  I plan to fly back to Honolulu Monday, leaving the new grandma to help out for a while in Ohio.

Are the Chinese buying this?

I posted about a month back about how the United States and Hawaii are doing at attracting investors from China.  Not very well, apparently.

Forbes published an article this week by Janet Carmosky, CEO and editor-in-chief of The China Business Network, in which Carmosky provides her ideas on attracting the Chinese.  Carmosky uses a somewhat psychological approach to what Chinese investors are looking for that may have implications for how companies, states or cities market themselves in China.  Let’s compare her ideas with how most American state officials go about investment promotion.

The typical state or city creates glossy brochures and videos that say how nice their community is, how business friendly they are (even if they are not), and they all (except Alaska and Hawaii) show a map of the United States with concentric circles showing how close every other part of the United States is to their location.  Most states don’t get much more detailed than that, though there are some good exceptions, such as the Carolinas, which have done an exceptional job of targeting specific industries and even individual companies.  Instead of the general stuff, you need research that focuses on the interests and needs of specific potential investors.  That means you have to know your target and look at the world through their eyes to successfully sell them on plunking down cash in your state or city.  I’ll never forget a Gulf Coast city that sent an investment mission to Taiwan, but had not looked at themselves through Taiwanese glasses.  They touted that their port has three (count ‘em, three!) container cranes.  The Taiwanese were glancing out the windows at possibly several hundred container cranes in the port of Kaohsiung.  Unimpressed.

Carmosky’s idea is that, not only do you have to do the research and target your investors, you need to tell the Chinese exactly what it is they should do in your city or state.  She approaches it from differences between American and Chinese views on how wealth is accumulated.  The Western concept is that entrepreneurship comes from the individual, from the bottom up.  We get the idea, then we figure out how we can do it, then we tell everybody else about it, using external communication to seek buy-in.  In China, most ideas are top-down in origin.  The center decides what needs to be done, then business figures out how to do it.  Communications, except for propaganda, are kept internal.  The Chinese, says Carmosky, are programmed to accept propaganda as an instruction for what needs to be done.

While Americans are out selling their ideas, Chinese tend to wait for an instruction on what they should do.  Her conclusion is that U.S. investment promoters need to stop selling ideas (my city is nice, my state is close to big markets) and start giving instructions: you need to invest in a new plant in my state, and here is a plan for doing it that has the full support of my government (and also academics, if you can get them).  Back that up with details and help to get a project done.

Counter to Western thinking, but she may have a point.  It’s also the old concept of making it easiest for your customer to do what you want.

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Following up on my earlier post, I have heard from a realtor friend that a private “investment mission” of Chinese real estate buyers recently purchased about a dozen properties in Honolulu’s ritzy Kahala neighborhood.  I haven’t confirmed it yet.  I do know there is a Japanese property owner in Kahala who is selling several properties.

I read a great article by Glenn Williams, entitled “U.S. Nuclear Reactors 101“.  It was on RealMoney.com, a subscription site, and I’m not going to give you Williams’ investment advice – that’s what you pay your money for, guys.  What interested me was how international the nuclear industry has become.  Some of us may remember when General Electric and Westinghouse were the whole game for nuclear in the United States, but that is certainly no longer the case.  And that’s important to recognize now that the pendulum of opinion is swinging back to nuclear after so many years in the desert.

Susquehanna Steam Electric Station, built with GE reactors a quarter century ago.

The United States paid a very high price for the decades that we effectively withdrew from the nuclear power game.  Despite developing some of the best and safest nuclear power technology (I’m thinking U.S. Navy, not Three Mile Island here), other countries have developed nuclear technology in other directions since we took our sabbatical.  The players in competitions for new U.S. nuclear plants include the Japanese, the French and even one Kazakh company.  We haven’t seen the Chinese and the Russians yet.  Let’s take a look at who is who.

There are two broad categories of nuclear power reactors: pressurized water reactors (PWR) and boiling water reactors (BWR).  The PWR builders include Westinghouse, Unistar and Mitsubishi.  Westinghouse certainly sounds like a U.S. company, and it once was, but today Westinghouse is owned by Toshiba (67%), The Shaw Group (20%), Kazatomprom (10%) and Ishikawajima-Harima Heavy Industries (3%).  That makes Westinghouse a Japanese-owned company with minority U.S. and Kazakh interests.  UniStar is a joint venture between Constellation Energy (U.S.) and Electricité de France.  And Mitsubishi, of course, is Mitsubishi Heavy Industries, one of Japan’s biggest companies.

The only BWR reactors available for U.S. power projects are from a U.S.-Japan joint venture formed by General Electric and Hitachi, known as GE Hitachi Nuclear Energy.

Westinghouse would supply the reactors for fourteen projects in the United States currently awaiting approval.  UniStar has three potential customers, so does GE Hitachi, and Mitsubishi has two.  Those are just applications, however, so we are a long way from reviving what was once a thriving American industry.  That means lost jobs, but not necessarily any loss in quality.  Japan and France have remarkable safety records in their nuclear programs and we can benefit from that.  But pity the poor Congressman who decides we need a Buy America rule for nuclear reactors.  Betcha you one of them is going to try it.

• CT&T, a South Korean electric car producer, and Hawaii Governor Linda Lingle announced yesterday that CT&T plans to invest $200 million in an electric automobile assembly plant on the island of Oahu.  The plant will produce two-seater electric cars, designed for use on Honolulu’s urban streets and fitted for the rental car trade in Waikiki.  The plant may employ as many as 400 workers and will include a plant-side dealership.  They plan to produce 10,000 vehicles a year, so this can’t just be for the Hawaii market.  For more details, see the Honolulu Advertiser article.
• It’s not too late to sign up for the May 14 U.S.-Hong Kong Business Forum at Waikiki’s Hilton Hawaiian Village.  Great speakers from the United States, Hong Kong and China.  And I’m moderating a session on U.S. Government assistance to exporters.  Take a look and register at www.ushkforum.org.
• In Hawaii, we pay attention to our far flung neighbors, the American Pacific territories of Guam, American Samoa and the Northern Marianas.  While data is pretty good coming out of Guam, it is sometimes tough to get a feel for what is happening economically in American Samoa and the Northern Marianas.  The U.S. Department of Commerce this week released new GDP estimates for all the U.S. insular territories, including the Pacific territories and the U.S. Virgin Islands.  These are small markets, but they have been lucrative for many.  Guam faces an economic boom from the expanded military bases on the island, American Samoa sees a downturn due to its declining tuna industry, and the Northern Marianas (e.g., Saipan and Tinian) are looking to growing tourism traffic from China and Russia.
• I posted a couple weeks back about China’s control of trade in rare earths.  This week the U.S. Department of Energy issued a press release saying it wants industry input on the use of rare earths in the energy sector, particularly clean energy technologies.

• It’s always nice to be recognized!  The Federation of International Trade Associations has added Business Beyond the Reef to its “Really Useful Links For International Trade”.

Really Useful Links for International Trade

• The yellow metal has a fascination so I had to stop and stare at a chart that shows which countries consume the most gold per capita.  While I might have guessed that India would be near the top of the list, I would have been badly wrong.  Saudi Arabia has a substantial lead in gold consumption, followed by Hong Kong.  Then come Turkey, Egypt and Italy (ever seen Flavio Briatore’s chains?), followed by the United Kingdom, the United States, Taiwan, South Korea and Russia.  Then comes India – in 11th place.  China is climbing quickly in 12th.
• Maybe there is some Chinese investment in Hawaii!  I posted recently about the apparent lack of Chinese interest in our islands, but may have spoken too soon.  One of my contacts tells me, according to the real estate grapevine, that Chinese investors have recently bought up 14 homes in Honolulu’s affluent Kahala district.  This apparently follows a very quiet visit to Hawaii by a group of Chinese investors, though I can’t confirm any of it.
• Starwood reports that Chinese visitors to its hotels in Waikiki are up 700%.  Welcome news, but that is from a very low base.
• Speaking of China, come see me and many better speakers, at the U.S.-Hong Kong-China Business Forum in Waikiki on Friday, May 14.  Great speaker line-up, people any company can pick something up from.  Check it out at www.ushkforum.org/.  I understand the early bird registration price is good through May 10, but there’s no reason to delay, is there?
• The Hawaii state legislature, in its “infinite” wisdom, passed SB2840, a bill that reserves a minimum of 80% of jobs on state-financed construction projects to Hawaii residents.  The aim seems to be to fix a problem that does not exist.  We just don’t see many non-Hawaii construction workers flocking to our islands.  Not to mention that the measure may run afoul of the WTO’s government procurement code, and is certainly a violation of national treatment principles.  Governor Lingle, to her credit, vetoed the bill, but the legislature over-rode her veto Thursday.  Another blow for Hawaii’s business image (or lack thereof).

Will he believe this time?

Good news on the Russian front!  I am always leery of doing business in a system I don’t understand, and I am no expert on Russia.  I’ve been there but several years ago.  But this week, the country is grabbing my attention – for positive reasons.

One piece of good news is Moscow’s decision to delink its application to join the World Trade Organization from its neighbors Kazakhstan and Belarus.  Trying to join as a customs union was always going to be complex and long struck me as a delaying tactic by those in Moscow who didn’t really want to subject themselves to the WTO’s rules of behavior.  Now they seem to be getting serious – possibly a sign that more forward-thinking power brokers are gaining an upper hand.  We can hope.  In any event, applying alone can only speed things up, especially now that Washington has apparently agreed to be Russia’s champion to make things happen in Geneva.

And American companies are taking a rosier view of Russia’s prospects as a decent place to do business.  Dunkin’ Donuts is re-entering the market after giving up eleven years ago – planning to open twenty coffee and donut shops in Moscow this year.  The company couldn’t get the Russians interested in donuts the first time around, plus they had to cope with a rogue franchisee who added vodka and meat pies to the menu.  Wasn’t the right image, apparently.  McDonalds has survived in Russia for twenty years, but Burger King joined the fray only in January.  Starbucks has been in Moscow for three years and now has 26 shops in the Russian capital.

The big bet, however, is John Deere’s decision to invest half a billion dollars in Russia! The tractor company opened a huge new plant in Russia Tuesday, banking on strong growth in Russian agricultural production.  The company plans to assemble tractors, combines, backhoes, graders, loaders and forestry equipment.  That kind of investment shows confidence though I am bemused by the reasoning.  Says John Deere’s CEO, Samuel Allen, himself quoting a Russian poet: “Russia cannot be understood by the mind alone. … In Russia one can only believe.”

Believing is sometimes tough.  Witness yesterday’s New York Times article about Russian investigators simply ignoring evidence, presented by Germany and the United States, about Russian agencies seeking and accepting corporate bribes.  Until Russia takes corruption seriously and does something about it, it’s going to hard for the rest of us to take Russia seriously.

• 

  Now that's a surplus! (Click for big version)

  A few weeks back I posted about America’s trade surplus in services.  The Economist hit the same point this week. But with a nice graph.

• I chanced upon a website the other day that could be of use to the many environmental engineering and pollution remediation companies that might be interested in China.  Check out the Institute of Public & Environmental Affairs in Beijing.  The site has some fascinating pollution maps of China, from the national scale down to some individual cities.  They cover both air and water pollution and, in some case, pinpoint sources of pollution.  Some of the information is in English, but it would be good to have a Chinese reader work on this for maximum benefit.
• Earlier in the week, I mentioned an article about how the Icelandic volcano had impacted India’s gold and jewelry exports.  The International Herald Tribune reports about how the ash cloud is causing huge losses for Kenya’s fresh vegetable and cut flower exporters to Europe.
• Asia Times carried an interesting story about the impact of the free trade agreement between China and Pakistan.  trade has boomed, but many in Pakistan fear competition from inexpensive Chinese goods.
• The New York Times came out with a good article about how small companies should get into exporting.  It’s a good read.  Thanks to my friend Carl Delfeld for spotting it.  Carl has established a new Center for Economic Diplomacy to help build U.S. exports.
• Finance is not my thing, but I can understand that the credit crisis has had a profound impact on world trade.  In fact, the relative lack of available export finance may be as big a hindrance to trade right now as the relative paucity of customers.  An article in the Wall Street Journal gives the details and makes the point that perhaps the banks are getting too cautious when it comes to trade.  After all, financing for an export sale is a short-term loan secured by actual goods.  Bankers see that as risky only because the goods cross borders.  It may be riskier to stay in your home market, guys.

Is Hawaii Getting Any?

While their representatives in Washington bash China, American cities are going all out to lure Chinese investors.  There is a strong disconnect between what happens on the local level and the things that go on in the hallowed halls of the U.S. Congress.  The Wall Street Journal ran an article a couple weeks ago entitled “U.S. Cities Seek To Woo Chinese Investment.” (See Contrary Winds for yet another example of a U.S. senator bashing a Chinese investment.)

The point of the article is that U.S. cities and regions are in hot pursuit of China’s dollars, competing hammer-and-tong with each other and with foreign destinations attempting to do the same thing.  The Journal mentions some of the successes: a new soy sauce plant in Georgia, telecom investments in Texas (they didn’t mention the wind farm), a theater in Missouri, a solar panel assembly plant in Illinois, and a shopping mall in Wisconsin.  Direct investment from China was up to $1.24 billion in 2008 (the latest data available), but that was only .05% of total foreign direct investment in the United States that year – hardly worth mentioning.  And it is only a bit more than 2% of China’s outbound investment.  So why are our cities salivating over China’s dollar reserves?  Same reason Willie Sutton robbed banks.

But it has been tough, and will be tough, to get the Chinese to plunk down those dollars in the United States.  Not only are they more at ease with investing in Asian cultures, Beijing likes to put investment into developing countries and regions where they can gain influence that would not be possible here.  Plus, and this is where our Washington politicos get the blame, we have created an atmosphere of uncertainty about how Chinese investments will be received.  That started, perhaps, with the 2005 rejection of CNOOC’s attempts to invest in the U.S. oil industry.  It makes some sense (unless you are a boy in the 3rd grade) that if you want to attract someone, you don’t loudly talk stink about them.  But that is what so many politicians do these days.

The U.S. Department of Commerce has an “Invest in USA” program that may be helpful, but is hamstrung in many ways.  Despite wanting to see inbound investment grow, the Federal Government cannot be seen as picking winners.  That means that Commerce has to lean over backwards not to play favorites, so if two cities or states are going after an investor, Commerce can only provide the same information to both of them and cannot use its commercial officers in U.S. embassies to lobby overseas for one and not the other.

I’m usually quicker off the mark when I see an interesting article, but I wanted to research how Hawaii is doing in the race for Chinese investors.  I was expecting to find some good success stories, especially because our governor brought in Ted Liu to be her director of the Dept. of Business, Economic Development & Tourism (DBEDT) expressly for his expertise of working with Chinese investors.  Ted did this for years with an investment firm in Hong Kong, and led Hawaii into an office in Beijing and ventures in Shanghai to attract investors.  (To be fair, investment was not their only purpose.)  So I asked DBEDT what success they had in the past couple years.  They didn’t know!  I have to assume that means none, nada, a goose egg.

I then turned to contacts in the real estate business.  Admittedly a very small sample, one residential realtor said she had heard that Chinese have bought some houses recently, though another realtor said she had heard nothing.  A commercial realtor didn’t want to talk about it, which I assume means that she has an active Chinese client that doesn’t want to go public yet.  My conclusion: if Hawaii is picking off any of the outbound investment from China, it’s pretty low key.