Of the 12 animals on the Chinese Zodiac, the year of the dragon is the most admired and celebrated. Dragons are a symbol of strength and fortune in Chinese culture, and like their zodiac counterpart, "Dragons" (people born in the year of the dragon) are reputed to be more creative, passionate and confident than others. 2012 ushers in a new year of the dragon and a new year of big expectations for China and the Chinese economy.
Last year, China officially overtook Japan to become the world's second-largest economy and, in 2010, it overtook Germany as the world's largest exporting country. In his March state of the nation address, Chinese Premier Wen Jaibao announced the government would give a boost to its domestic spending, chart a course to increase consumer demand and design a system to keep China's economy expanding while international markets remain weak. He also predicted lower GDP growth of 7.5% versus the tremendous 9%-10% growth of last two years, but significantly higher than most of the major markets. Over the past five years, China has become increasingly integrated into the U.S. market. Generally, the media focuses on U.S imports of Chinese goods; however, U.S. exports to China have reached record levels. American exports to China grew 13% in the past year, and though 2011 represented a dip in Maine/China exports due to weakness in pulp and electronic circuit exports, Maine exports to China grew over 80% from $153 million in 2007 to $275 million in 2011, establishing it as the state's third-largest export market. Maine's exports to China in the pulp, paper, aircraft parts, biotech and advanced textile industries had remarkable double- and triple-digit growth over the past few years.
The recently announced Gubernatorial Trade Mission to China scheduled for September 2012 represents an opportunity for many of Maine's major industrial sectors as well as its educational institutions. China has a growing demand for U.S. agricultural products, including seafood and wood products. The Foreign Agricultural Service indicated that U.S. exports to China in this industry increased over 38% in the 2009/2010 time period. American food products are perceived to be of the highest quality and Chinese consumers are more and more appreciative of this in the wake of some the melamine and avian flu issues of past years. In addition, there has been a growing demand for New England's Eastern white pine and increasing demand for biomass as a heating and energy alternative to oil and coal.
China's aircraft sector is underdeveloped and its current fleet is aging, with an average aircraft age of four years. There is an increasingly strong demand for imported products and new technologies for this growing sector. Although Maine does not have a lot of aircraft manufacturers, it has a plethora of aircraft parts manufacturers with strong ties to the original equipment manufacturers for most of the major aerospace companies. Many of the new technologies and innovative products in these sectors are highly valued and of interest to China's growing aircraft industry.
China's demand in the biotech and medical products industries also continues to grow. The New Medical Reform Plan passed in 2009 was created to cover 90% of China's population under a universal health care system as well as to significantly improve care facilities and expand health-related infrastructure. This stimulus has created an increase in import demand and interest in U.S. medical products.
On the education front, the Chinese have an increasing interest in our U.S. educational institutions. Chinese students come to the United States for the prestige, to master the English language and develop a competitive advantage for when they enter the job market. China now has 157,000 students studying in the United States and represents 22% of all non-American students at U.S. universities. Through "StudyMaine" and individual institutions' activities, Maine is establishing itself as a safe, dynamic environment for a quality education. Approximately 80% of the 700-800 international students studying at our Maine academies and secondary schools are from China. Our public and private universities still have room for development in this area. For example, China only represents 14% of foreign students studying at Maine higher education institutions. The Chinese student demand will only continue to grow with the Chinese economic expansion. This is an opportunity for educational institutions of all kinds throughout the state.
Even with China's cut in its targeted GDP growth, it continues to far outpace the World Bank's global economy growth estimates of 2.5%-3.1% for 2012 and 2013. When choosing which markets to focus on, companies need to keep this in perspective and realize there continues to be international demand and excitement for America's added-value goods and services and high-quality education.