Bloomberg News

Xi Visits Iowa for 80’s Reunion Bearing China Gifts for Cargill

February 28, 2012

Feb. 16 (Bloomberg) -- Chinese Vice President Xi Jinping reunited with a family in Iowa that hosted him 27 years ago as a provincial agricultural official, this time bringing with him company executives who signed deals to buy soybeans as demand for U.S. grains surges in Asia’s biggest economy.

Xi, in line to begin taking over China’s top leadership posts later this year, traveled yesterday to Muscatine, Iowa on the Mississippi River for a reunion with Governor Terry Branstad and the hosts from his 1985 trip when he came to see how to improve crop and livestock production as a provincial agricultural official.

Xi’s visit comes as U.S. agricultural exports to China are booming, helping export growth outpace the percentage increase in imports in 2011. The bilateral trade deficit, which reached $295 billion dollars last year, has been a constant source of friction between the world’s two biggest economies, with President Barack Obama telling Xi in their Feb. 14 meeting that the U.S. believes the yuan is undervalued.

“China has been a great trade partner and a key customer of Iowa soybeans, and this agreement shows a commitment on both sides to continuing that relationship,” Iowa Agriculture Secretary Bill Northey said during the sales signing ceremony yesterday. “Exports are vital to the economic health of our state. China is a rapidly increasing portion of that total, and it is important we continue to build on that strong partnership.”

‘The Godfather’

Companies including Cargill Inc. and the Archer-Daniels- Midland Co. signed contracts yesterday to export $4.3 billion of soybeans to China. As of Feb. 2, U.S. shipments to China of grains, including corn, wheat barley, sorghum and soybeans, surged 78 percent to 695 million bushels from a year earlier, according to the Department of Agriculture. Iowa is the biggest U.S. producer of corn, soybeans, hogs and eggs.

In Muscatine, Xi visited the Victorian-style home of Sarah Lande, who held a dinner for him in 1985. He told the townspeople and officials gathered in the parlor about his first visit and how surprised they had been to hear that he watched American movies such as “The Godfather.”

“It’s my second visit to Muscatine after a hiatus of 27 years, and all the memories of my being here are now coming back,” he said. “Coming here is really like coming back home.”

Yesterday evening Branstad, then as now Iowa’s governor, toasted Xi at a dinner in Des Moines, saying “Iowa farmers are proud to harvest safe and reliable agricultural products for use by the people of China.”

Five Complaints

Earlier in the day, Xi spoke to business executives in Washington, including Coca-Cola Co. Chief Executive Officer Muhtar Kent, in an event co-hosted by the U.S.-China Business Council. In his speech, Xi said China’s trade surplus with the world was declining as a percentage of its economy and is now in a “normal range.”

“It is very important that the U.S. adjust its economic and policy structure,” he said, urging the U.S. to ease restrictions on technology exports to China.

Obama has filed five World Trade Organization complaints against China since taking office three years ago. The two countries have clashed over access to each others’ markets for products including steel pipes, poultry, beef, tires and music.

Before heading to Iowa, Xi met with members of Congress in Washington, including sessions with Senate Majority Leader Harry Reid, a Nevada Democrat, and his Republican counterpart Mitch McConnell of Kentucky. He also met with House Speaker John Boehner, an Ohio Republican, and House Majority Leader Eric Cantor of Virginia, who raised questions on human rights and religious freedom, and criticized China over intellectual property violations.

Human Rights

At the meeting with Boehner and Cantor, the U.S. side delivered a letter about the plight of Gao Zhisheng, a human rights lawyer imprisoned in China, according to a summary of the meeting released by the speaker’s office. Boehner told Xi that China’s enforcement of intellectual property laws was deficient, and Cantor expressed disappointment over China’s veto last week of a United Nations Security Council resolution on Syria, according to the summary.

Bian Zhenhu, president of the China Chamber of Commerce of Foodstuffs and Native Produce, said during yesterday’s soybean sales signing that improved relations between the world’s two top economies was key in promoting more bilateral trade.

“I personally wish there was more common ground and mutual respect for the trading relationship,” he said.

LA Lakers

China launched a trade promotion effort during Xi’s visit that will include a drive to purchase $27 billion in U.S. products including farm goods, machinery and electronic materials, Vice Commerce Minister Gao Hucheng said Feb. 14 in Washington.

Chinese and U.S. officials, along with business executives will attend a USDA-sponsored symposium today in Des Moines aimed at strengthening trade relations, improving food security and enhancing the role of private business in agricultural development.

Later in the day, Xi flies to Los Angeles for the last leg of his visit, where additional soybean deals may be announced. He is scheduled to tour the city’s port with California Governor Jerry Brown and attend a banquet in his honor. Tomorrow, his last day in the U.S., he will speak at a business conference, tour a school and attend a Los Angeles Lakers basketball game with Mayor Antonio Villaraigosa.

--With assistance from Margaret Talev and Eric Martin in Washington and Dune Lawrence in New York. Editors: Peter Hirschberg, John Brinsley

To contact the reporters on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net; Michael Forsythe in Beijing at mforsythe@bloomberg.net

To contact the editors responsible for this story: Steven Komarow at skomarow1@bloomberg.net; Peter Hirschberg at phirschberg@bloomberg.net


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