Nevada-China deal to boost cooperation, jobs

By Buck Wargo

Fri, Sep 11, 2009 (3 a.m.)

Nevada’s economy is expected to get a boost over the next several years from Chinese investments as part of an agreement reached this week.

Nevada and China signed a deal Sept. 8 in Phoenix paving the way for investments that state officials said will create jobs.

The memorandum of understanding is a tacit commitment by the Chinese to invest in renewable energy such as solar, wind and geothermal; mining; manufacturing; and tourism infrastructure, said Alan Di Stefano, Nevada Economic Development Commission director of global trade and investment.

“We are looking at creating jobs,” Di Stefano said. “This could be huge. It won’t be next week or month, but over a period of time it will be. Our trade with China has grown fast with nothing official ... People may not think a memorandum of understanding means much, but in China that’s like a contract that they are committing to do things, and the expectation is that this is going to happen. That’s the intent of the parties.”

Chinese companies need the government’s permission to invest abroad, and having this agreement makes that much easier, Di Stefano said. It opens a lot of doors, he said.

A Chinese trade center in Las Vegas will be discussed, he said.

China is the No. 3 export market for Nevada with $479 million in sales, Di Stefano said. In 2000 China was No. 24 with about $40 million in sales.

Discussions to establish air service between Nevada and China, both passenger and freight also will be held, he said. China Air has already agreed to use Reno as a backup for shipping freight that may not be able to get in at San Francisco because of weather or other factors, Di Stefano said. There is talk of expanding that and starting passenger service at McCarran International Airport, where freight could also be brought in, he said.

There are talks about Chinese investment in Pershing County for copper ore that the country needs. About $200 million to $300 million in investment is need for the extraction, including railroad improvements, Di Stefano said.

As for tourism infrastructure, Di Stefano said the most likely scenario is investing in future nongaming hotels.

Talks about greater commercial relations between China and Nevada have gone on for years, Di Stefano said. He said the Chinese government is as interested as American companies that look at Nevada for its business-friendly environment and tax policy.

Las Vegas economist John Restrepo, principal of Restrepo Consulting, said the state already benefits from Chinese tourism and the agreement will only boost the state if China carries through with its promise.

“This will create economic activity and help diversify the economy,” Restrepo said. “This is only good news for the economy. There is no downside. It is going to help grow the relationship and bring in their investment.”

China has limited natural resources and growing a relationship with a state like Nevada that is high in natural resources make sense, he said.

“The Chinese started investing in Nevada as tourists, then as real estate investors, and potentially now in natural resource development,” Restrepo said. “Hopefully, it will also be manufacturing.”