Chinese President Xi Jinping Lintao Zhang The Associated Press
Chinese President Xi Jinping Lintao Zhang The Associated Press

Business Columns & Blogs

Xi’s visit coincides with NW Innovation Works’ plans to expand on Tacoma Tideflats

Contributing writer

September 20, 2015 2:00 AM

It’s not as though Tacomans need the arrival of China’s president, Xi Jinping, for a firsthand reminder of the significance of that country to this region.

If their daily commute takes them within viewing distance of the Port of Tacoma, they can watch metal boxes moving to the rest of the country and reasonably conclude there’s something from China in them. The value of two-way trade between China and the ports of Tacoma and Seattle in 2014 was more than double the next the next highest country, which would be Japan.

If they’re in any kind of manufacturing business, they’re already well aware of China as a competitor, either for production jobs moved abroad or from products made there and shipped here for sale.

If they’re in natural resource businesses such as agriculture or forestry, they know of the huge market potential for Washington products in China, as well as the volatility.

They’re also likely aware of the next phase of China’s interaction with the U.S., in the form of direct investment in U.S. companies and facilities. Northwest Innovation Works, a China-based investment and industrial consortium, has proposed building three facilities — including one on the Tacoma Tideflats — to convert natural gas to liquid methanol as a feedstock to replace coal in Chinese plastics plants.

Northwest Innovation Works plans to announce this week a major expansion of its Tacoma gas-to-methanol project. As originally proposed, the Tacoma plant was to have two production lines and about 200 permanent jobs. Because of the adoption of an updated production technology billed as more efficient and even cleaner than what was initially proposed, the consortium now says it wants to install four production lines, which would mean up to 260 permanent jobs. Total investment would be about $3.4 billion.

The project’s sponsors are gearing up for permitting (a Tacoma office is also part of the announcement). Construction would start in the fourth quarter of 2017, and take about three years. The second phase of adding the second set of two lines would start when the first phase has entered production.

And all that’s without the global economic and geopolitical issues that dominate headlines.

For the Puget Sound region, in economic terms China may be more important than Canada, Mexico, or Europe. It may matter more than the East Coast does to us.

Whether President Xi gets the message that we get it is far less certain.

He’s much less likely to get it in that other, less consequential Washington, the one to which President Xi journeys after departing Seattle.

Xi’s visit to the Puget Sound region will no doubt generate mass quantities of polite and meaningless verbiage. But people here will understand what’s at stake, positive and negative, just by reading his itinerary.

Xi is tentatively scheduled to visit Boeing’s production plant at Everett. China is a huge market for Boeing aircraft, but also a huge potential center of Boeing jobs. The trade publication Aviation Week recently reported that Boeing plans to open a new facility in China to handle painting, flight testing, delivery certification and customer acceptance of Renton-built 737s, all tasks currently completed locally. The announcement could come during Xi’s visit, the magazine said. Think that, as well as China’s own emerging commercial-aircraft manufacturing sector, might be of interest to the locals?

He’s also supposed to swing by Microsoft, and maybe even drop in on Bill Gates for a meal. Perhaps over drinks the topics of intellectual property rights and cybersecurity might come up.

Xi’s visit to Tacoma doesn’t officially have a business or political component to it; instead the trip to Lincoln High School is recognition of a sister-city relationship. But depending on how traffic is, he might make a slight detour through the Tideflats to get a glimpse of the site of a multi-billion-dollar investment China plans to make here.

Northwest Innovation Works’ announcement is a pretty big deal, one that project backers and local and state officials say could have big payoffs not only in dollars and jobs but in environmental remediation (and one which local community groups have questions about in terms of less positive impacts).

But then, just about every interaction with China these days is a huge deal, just because of the size of the participants and the power they wield. That makes the risks and rewards, the potential for gain and conflict, outsized as well. Welcome to our little corner of the planet, President Xi. Now let’s chat — for real.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

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