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TRADE — Firms Already Normalizing Trade With China

S.D. World Trade

Center Launches Revised,

Improved Web Site

Whether Congress approves permanent normalized trade status for China doesn’t mean much to many local businesses who have decided the market is much too big to ignore.

Companies such as Nology Engineering, a San Marcos-based supplier of electronic engine management systems, are already selling goods in China and expect to sell much more regardless of what Congress does.

Nology President Werner Funk said the company recently signed a contract to supply China’s First Automobile Works, the country’s largest auto manufacturer, with its ignition system controls. The contract is worth about $700,000 in the first year, but the big payoff is in the future.

By 2001, Nology could be supplying its system to as many as 40,000 engines a year, which would be worth more than $10 million, Funk said.

Given this and Nology’s past business ties in China, isn’t Funk a bit nervous over the upcoming vote in Congress on permanent normal trading relations?

No, he said.

“If they don’t pass it, we’ll still sell there. It’s not going to affect us.”

Nology has been exporting to China for about 14 months , mostly gasoline and coolant additives. The latest contract came about after the Chinese government mandated that cars built this year must have electronic fuel injection systems. Pollution from car exhaust fumes is reaching intolerable levels in many China cities.

Nology designed its system for three Chinese-made engines and received certification from the government before the contract award. Beijing’s mass transit agency also certified Nology’s system for its fleet of buses, and the firm is in negotiations with other Chinese engine manufacturers for the same system.

Nology sells its products to some 200 distributors and dealers in 15 countries. Last year it did $2.3 million in sales, with about $1 million coming from exports. It has 25 employees.

While the upcoming vote doesn’t mean much to Nology, it could have a huge impact on those companies which have yet to break into the Chinese market, said Barry Naughton, a China expert who teaches at UCSD.

Naughton, who testified before Congress and was at the White House earlier this month regarding the issue, said the agreement to grant China normalized trading status is a “no-brainer.”

“From a trade standpoint, PNTR is a completely one-sided and entirely to the advantage of the United States,” he said. “The U.S. market is already open to Chinese products, and this agreement involves no concessions and virtually no new commitments on the part of the United States.”

By the way, the agreement has nothing to do with China’s entrance into the World Trade Organization. That decision will come later this year and is virtually assured. President Bill Clinton votes on that issue, which doesn’t require ratification from Congress.

This PNTR vote is about changing China’s status from most favored nation, which required an annual vote, to a permanent designation. Another misconception caused by the past wording was that it made China our favorite trading partner. In fact, more than 200 countries have the MFN status.

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WTC Revises Web Site: The San Diego World Trade Center launched a revised and improved Web site last week at (www.sdwtc. org). The new site offers much more data and links to other sites than the previous one.

In addition to basic information about the organization and upcoming events, users can also access a number of databases, including one for the maquiladora industry and one that provides a place for exchanging trade leads.

A separate section of the site deals with Mexico and includes information about NAFTA 2001 tariff revisions and other useful news.

Certain areas of the site are accessible only by a password and purchasing the data, but WTC members get free access.

More Trade Missions: This week WTC leads a business mission to Guadalajara, Mexico’s second largest city, but there’s a whole lot more travel planned for this year.

Future trade missions led by the WTC are Australia, including Sydney and Brisbane, from July 25 to Aug. 1.

The next trip is to Mexico City, in conjunction with the California 2000 Trade Show, from Sept. 5 to 9.

After that, it’s on to Brazil, including Sao Paulo, Campinas, Rio de Janeiro and Porto Alegre, from Nov. 30 to Dec. 7.

Looking even farther ahead, the WTC plans a mission to Monterrey, Mexico in the first week of April, 2001.

Call the WTC for prices and more details.

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Maxwell Connects With Korea: Maxwell Technologies Inc., the San Diego-based designer and maker of power pulse systems, said it took an equity stake in Onemocall, a Seoul-based manufacturer of energy generation and control systems.

Under the deal, Maxwell will supply several million of its ultracapacitors or storage cells over the next 18 months that will be installed into Onemocall’s microgenerator systems.

The systems will be used to power a variety of high tech devices such as cell phones, flashlights, toys, personal digital assistants and other hand held devices that use rechargeable batteries.

Maxwell did not reveal the amount of the investment in Onemocall.

Gateway Opens In Canada: Gateway Inc., the San Diego-based computer retailer, is expanding its black-and-white Holstein cow-painted showroom stores to Canada soon. The first outlets, which contain no inventory and

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