The Coming China Wave
It could take three to seven years, but the world’s next superpower will play a much bigger role in local tourism, real estate, energy, schools and exports
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Education: Sending youth and kids here
McNally recently accepted a post directing the China-U.S. Relations Master of Arts program at the University of Hawaii-Hilo. He says the program is the only one of its type in the world and stands to do well.
“I feel there are huge possibilities,” says McNally. That applies in general to the education of Chinese in Hawaii, which benefits from the cachet a U.S. diploma carries in China and how comfortable Chinese feel in Hawaii because of its cultural diversity and low crime rate.
Hao Ping, vice minister of education in China, has a master’s degree in history from the University of Hawaii-Manoa and was a visiting scholar at the East-West Center.
A state study last year found the People’s Republic was one of the top five countries sending students to Hawaii. It found international students and dependents overall spent $160 million here during the 2008-2009 academic year.
China has many students going to schools in Japan and elsewhere in Asia, but the destination of choice is the U.S., according to Ned Schultz, who heads UH-Manoa’s international program. He says that presents an opportunity for Hawaii as more Chinese parents earn enough to afford UH.
“I’m very, very optimistic that we’ll see more and more Chinese students coming in,” Schultz says, noting UH is considering a joint degree with a university in Guangzhou, China’s third-largest city.
DBEDT’s Liu sees the opportunity extending to all types of education – academies that teach English, two-week training courses, business courses on U.S. business etiquette and even K-12 schools.
“This is low impact and it brings in money,” says Liu. “It’s a service industry and we don’t have to build it.”
Educators also see Chinese mothers moving to Hawaii to stay with their children while they go to high school here. Joel Weaver, director of the Hawaii English Language Program at UH-Manoa, says several private schools in the state are benefiting from the Chinese students. Punahou, for example, launched the Student Global Leadership Institute this past summer with four schools from China and three Mainland schools. It hosted 28 students for a two-week study program.
Energy and other investments: Big potential
Planners suggest the desire for education could be married with a federal program that attracts job-producing investments while allowing Chinese entrepreneurs to send their families here for education.
The EB-5 immigrant investor program grants green cards to foreign investors and their families who invest $1 million or more in activities that generate 10 or more jobs ($500,000 in rural or high-unemployment areas).
Hawaii has a bright future with the program, says Tom Rosenfeld, president of New York-based CanAm Enterprises, which specializes in EB-5 programs.
CanAm runs the Hawaii EB-5 regional center program for DBEDT and has two projects pending that require more than $20 million in investments. Rosenfeld believes the projects will be oversubscribed and that many of the investors willing to plunk down $500,000 will come from China.
“I think we could raise more than $100 million a year in Hawaii easily,” says Rosenfeld. He says Hawaii stands to benefit beyond the EB-5 investments as the same investors look for other ventures.
“There’s a lot of benefit,” he says. “These are impressive people. These are the creme de la creme.”
Energy is likely to be among the top Chinese investments in Hawaii. One indication was that Luo Baoming – governor of Hainan Province, an island that’s often called the Hawaii of China – attended the Asia Pacific Clean Energy Summit in Honolulu in August.
China is the world’s largest energy consumer and it’s looking to renewable energy to help reduce both its dependence on fossil fuels and its air-pollution problem. That’s where Hawaii’s work on alternative energy comes in.
“Hawaii as a test bed for certain energy technology is of enormous value to the world,” says Liu.
Hoku’s controlling owner, Tianwei New Energy, is part of China South Industries Corp., one of China’s giant, state-owned enterprises. Scott Paul, CEO of Hoku, says his parent company is interested in doing more in the state and he sees other Chinese possibly investing in projects such as solar farms.
Hawaii also could find itself exporting more products to China. For instance, Big Island anthurium growers held export talks during Lingle’s June trip to China. Liu thinks affluent Chinese will be willing to pay a premium for Hawaii brands, such as distilled, deep-ocean water and local papayas.
Michael Zhang has the same idea. The owner of Blue Hawaii Lifestyle plans to open 50 stores in China featuring Hawaii food, beauty and health products. “I think he’s on to something,” says Liu.
Beijing-based attorney Leu says Hawaii’s people need to develop personal ties with the Chinese since relationships are crucial to doing business there. The Chinese Chamber of Commerce of Hawaii is busy trying to foster such relationships, with programs such as its annual exchange of retired U.S. and Chinese generals and admirals.
But the Chamber’s Lau says more needs to be done. “We have to be very careful not to blow this opportunity. Hawaii can’t sit by and live in blue tents on the beach.”
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