At its annual meeting in Tucson, Ariz., GAMA - the association of appliance and equipment manufacturers - announced that it would open an office in Beijing this summer.

This should come as no surprise. After all, to many United States industries, China is the "new frontier." It's similar to American settlers traveling West in search of gold. In this case, it's industries from the United States dropping anchor in the Asian market, looking to accumulate profits.

"The idea of opening an office in China to serve as an informational resource for participating GAMA members and to promote harmonization of U.S.-Chinese standards for space conditioning and water heating products is the result of a common theme that cropped up in many of my one-on-one conversations with GAMA members - the increasing importance of business opportunities for our industries in China," said Evan Gaddis, GAMA's president.

"And GAMA's unique position representing those industries makes us uniquely qualified to play a role in helping our members take advantage of what China may offer.

"China's 1.25 billion people, its turn toward a market economy, its emerging middle class with the resulting demand for modern comforts and the money to pay for them, and China's entry into the World Trade Organization with the legal reforms that its membership necessitates ... all figured prominently in these conversations. A poll we conducted of GAMA's member company CEOs confirmed it. China is too important to our industries to ignore."

It's hard to disagree.

China Rising

According to facts and figures from the China Internet Information Center (, national economic growth has continued at a rapid pace in China. In a March 1 report, it noted that the 2003 gross domestic product (GDP) was 11,669.4 billion ($1,405.9 billion, U.S.), an increase of 9.1 percent, or 1.1 percentage points more than the previous year at comparable prices.

Overall, the country's GDP has quadrupled since 1978. This figure helps show the progress made in China since the end of the 1970s when China's leaders - mindful of the gap in economic growth between China and other countries - made the decision to reform China's economic system.

Today, China has a population of 1.3 billion. That's a lot of people who need homes and buildings cooled and heated.

According to the International Trade Administration (ITA), the establishment of a housing fund in China - from which low-interest loans are drawn, and local tax breaks for home purchases are offered - has led to greater demands for affordable housing and has encouraged home ownership. Therefore, the market potential for construction and building materials in China is enormous.

During the next three years, ITA said government officials plan to increase spending on new homes by 15 percent by investing $97 billion in infrastructure and residential housing construction.

Along with the increase in development, the reforms have encouraged the use of energy-efficient and environmentally friendly building materials, which opens the market for American-made building products, including HVACR equipment.

A Joint Effort

The National Electrical Manufacturers Association (NEMA) was on its way to establishing its own office in Beijing, said Gaddis, when GAMA proposed making it a joint office, with a professional-level staff member in the office dedicated to GAMA's specific industries.

"GAMA's representative in Beijing will promote the harmonization of U.S. and Chinese government-generated standards as a key area of focus," said Gaddis, "so establishing and maintaining access to high-level Chinese government regulators and industry representatives will be a priority.

"But in order to help participating GAMA members sell product in China, we will also direct GAMA's representative in Beijing to gather and report information on Chinese economic trends that affect commerce, as well as copyright and trademark developments applying to the growing problem of counterfeit goods."

Gaddis said that through its members GAMA has been "extending its reach into the international business affairs, but China represents our greatest opportunity to date."

Welcome to the new frontier.

Mark Skaer is editor-in-chief. He can be reached at 248-244-6446, 248-362-0317 (fax), or

Publication date: 06/07/2004