Much of Tacoma’s past economic successes came from the goods and services that it has exported to Asia. One path for Tacoma’s future economic prosperity could be in attracting more investment and immigra-tion from those same countries in Asia that are our major trading partners.
Richmond, B.C., our neighbor 170 miles to the north, shares many attributes with Tacoma. Both Richmond and Tacoma are major ports, share strong industrial heritages, and are neighbors with larger and better-known cities (Seattle and Vancouver, B.C.). They were incorporated within five years of each other (Richmond in 1879 and Tacoma in 1884) and today each has just under 200,000 inhabitants.
Twenty-five years ago, neither Richmond nor Tacoma was booming. Today Richmond has been rebuilt and is one of the most vibrant areas on the West Coast. Tacoma has made strides but remains mired in slow growth.
Residential real estate prices are one telling economic barometer for comparing the two cities. In October 2012, Richmond’s average single-family home sold for about $593,000, while in Tacoma it was less than half that at $235,000.
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How did the similar cities diverge so much in the past quarter century?
Much of Richmond’s transformation has been fueled by foreign investment and immigration from China and South Asia. This immigration was spurred by Hong Kong’s return to China in 1997. That led to an exodus of wealthy residents of Hong Kong, many of whom settled in British Columbia. Their wealth and entrepreneurialism helped to transform greater Vancouver, including Richmond.
While that historic opportunity had minimal impact on Tacoma, there remains a real – and growing – opportunity to attract Chinese capital to Tacoma and the South Sound region. China’s rise to become the second-largest economy in the world is one of the most fundamental global economic changes in the last quarter century. That rise is also creating newly wealthy Chinese families, many of whom are looking to relocate overseas.
According to the Hurun Wealth Report published in July, there are now more than 1 million Chinese citizens with assets over 10 million Renminbi (about $1.6 million). Of these, more than 44 percent want to emigrate to another country and a full 85 percent want to send their children to school outside of China. This could actually become a larger wave of investment and emigration than the Hong Kong wave. This time Tacoma should work to attract some of these international entrepreneurs.
One way to attract these potential investors is through our region’s outstanding educational institutions. Foreign students who study here will be more likely to potentially settle in the region and expand business ties between this region and their family’s businesses. The University of Washington Tacoma, the University of Puget Sound, Pacific Lutheran University, St. Martin’s University, The Evergreen State College and the region’s community colleges all have substantial appeal internationally and could be attracting even more foreign students in the years to come.
We also need to more proactively court potential direct investment from abroad as aggressively as British Columbia and some regions in this country are already doing. Despite Washington being the most trade-dependent state, we rank only 32nd among the states in receiving foreign direct investment. Recognizing this opportunity, the World Trade Center Tacoma is now working on FDI, expanding beyond our traditional focus on increasing international trade.
The World Trade Center Tacoma has already hosted several groups of Chinese CEOs who are looking at opportunities in the South Sound, including a significant group this week. We are also putting together a group to go to one of China’s biggest international investment fairs in September 2013 to try and attract Chinese investment to Tacoma and the South Sound. We are in the process of recruiting local companies for that mission; any that are interested should contact us.
Tacoma needs investment and more entrepreneurialism. There is a lack of capital in the city today, and it is unlikely to come from traditional sources. Attracting foreign direct investment is a realistic option that could pay real dividends for the South Sound economy in years to come.
Anthony Hemstad is president and CEO of the World Trade Center Tacoma. He can be reached throughwww.wtcta.org