CINDY ELLEN RUSSELL / CRUSSELL@STARBULLETIN.COM Roger Morey, senior vice president of sales and marketing with Hawaiian Natural Water, will attend the Business Trade Mission to China and Korea as part of a Hawaii delegation.

Isle group to offer
China tips on tourism

A Lingle-led mission will promote
state's industry expertise

Opium, Mickey Mouse, and now tourism expertise.

For centuries, outsiders have come to China bearing goods that they hope will find a market among China's vast sea of potential consumers, and Hawaii is taking its place in line.

When a 120-member state mission led by Gov. Linda Lingle arrives in China this week, one of its key thrusts will be to promote a new type of export commodity: Hawaii's experience in planning, developing and operating resorts.

The state's main "China play" still rests on a hoped-for future influx of Chinese tourists to our own shores, but the new approach is emerging as a potentially valuable hedge, said Ted Liu, director of the state Department of Business Economic Development and Tourism.

"China is a market that you can't afford not to be in. The market is vast and getting bigger all the time," said Liu, and a former investment banker in China.

It might seem self-defeating for Hawaii to help another destination develop its tourism industry, but the possible payoff in China could outweigh such concerns.

China's economy is growing by leaps and bounds, with resorts and other developments at the forefront. The World Tourism Organization predicts that by 2020 China will be the world's biggest tourist destination, with a mind-boggling 180 million visitors a year, not to mention a growing class of Chinese domestic tourists.

"The long-term potential for resort development is huge. There is 40 years worth of delayed demand," said Robert Zheng of local architecture, design and planning firm Wimberley Allison Tong & Goo.

The company, whose China experience dates from the initial opening of the economy in the late 1970s, is a member of a consortium of local companies called the Integrated Development Group that is spearheading the new strategy.

The 10-member group was formed in 2003 with DBEDT's involvement and also includes planning and engineering firms Belt Collins, accounting and management experts PKF-Hawaii, and other firms with rich international experience.

While in China, the group is expected to sign a preliminary agreement to plan and design a huge resort development in Tibet. The approach is to present the firms' varied specialties in a "one-stop shop."

"We're looking at that as a template for other companies to follow. Hawaii companies are small and China is a daunting market. There is strength in numbers," says Liu, who hopes that the group's success might open doors for a range of other Hawaii firms.

Simultaneously, officials from the University of Hawaii system will be exploring opportunities to help meet China's vast and growing tourism training needs.

The highly regarded Travel Industry Management programs at UH and Hawaii Pacific University already train a growing a number of Chinese students sent by China's tourism industry, said Walter Jamieson, dean of the UH TIM School.

But keeping pace with Chinese demand is likely to involve setting up an in-country presence in China, something being discussed with potential partners there, said Jamieson.

"The need is so significant that the simple logistics of moving that many people to Hawaii for training is not realistic," said Jamieson, who added that the trip is likely to lead to some concrete deals.

The delegation, which will barnstorm through Shanghai, Beijing and Guangzhou before a stop in Korea, dwarfs a similar mission to Shanghai last year that was about half the size. It includes about 40 businesses, ranging from local giants Matson Navigation Co. and Castle & Cooke Inc. to Web-based aloha attire merchant Painagirl.com.

Of course, dreams of dazzling riches to be had in China have been around since Marco Polo's time, only occasionally coming true, and the delegation also will hear of the market's risks in briefings by American businessmen and trade officials.

A report by the American Chamber of Commerce in China said the country remains plagued by a dizzying combination of "vague government regulations, bureaucratic caprice, a lack of transparency and blatant infringement of intellectual property."

"I never felt I knew the China market all that well before and I feel like I know it even less today. It's changed so much," said China veteran Liu.

Wimberley Allison Tong & Goo's Zheng said getting paid by Chinese partners can still be a struggle.

"A lot of foreign firms have gotten burned. They've just had to eat it," he said. "It's still a problem but its getting better."

He said the architecture firm has avoided trouble through careful selection of partners, which will be another focus of the trip.

Many of the participating businesses will meet with potential partners in "corporate matchmaking" sessions arranged by DBEDT and the Chinese.

"Actual business agreements may come later, but there's no chance of that without first building relationships and getting to know the market," Liu said.

Making Hawaii's voice heard won't be easy. According to Liu, five other state governors have been through China in the last three months.

Some other key events in the trip include:

>> Lingle will open a state trade and tourism office in Beijing, which is expected to give Hawaii a voice in China on resolving issues related to outbound Chinese tourism.

>> The governor and other state officials will meet with U.S. consular officials in China in an ongoing push to ease the tight grip on U.S. visas for Chinese travelers, a major hurdle to growing that visitor market.

>> Lingle and UH officials will sign joint-program agreements with universities in Beijing and Guangzhou.

>> The state's High Technology Development Corp. will sign a reciprocal agreement with China's largest technology park to provide mutual space and business-support services for each side's companies.

China-Korea Business Mission Some highlights of the state mission to China and Korea: Shanghai, June 9-11 >> Hawaii's Integrated Development Group and University of Hawaii participate in Asia-Pacific Architecture Symposium, co-organized by UH School of Architecture. >> Market briefings by delegation businesses by U.S. trade officials in China and foreign investors. >> Gov. Linda Lingle and tourism representatives to meet with Chinese travel industry and travel media. Beijing, June 12-13 >> Governor tentatively scheduled to meet either Chinese President Hu Jintao or Premier Wen Jiabao. >> Lingle and other delegation members briefed by U.S. ambassador to China Clark Randt. >> Governor to open State of Hawaii Office of Business and Tourism and host related reception and concert featuring Hawaii recording artists at China's parliament. >> State High Technology Development Corp. to sign reciprocal agreement with China's largest tech park. Guangzhou, June 14-15 >> Lingle to pay first visit by Hawaii governor to Zhongshan district, ancestral home of most of Hawaii's Chinese. >> UH to sign agreement with Sun Yat-Sen University including joint executive MBA degree. South Korea, June 16-18 >> Lingle to meet with Prime Minister Lee Hae-chan, top Korean business executives, and U.S. military personnel stationed in South Korea.