A One in a Billion (dollar) Friendship
To the rest of the country it may seem like strange bedfellows: a state in the heartland of America on a first name basis with the world’s second largest economy. But for the past 30 years that has been the case between Iowa and China.
Since 1983, Iowa has been in a formal Sister State relationship with Hebei province, China.
While vastly different in language, culture and size—Hebei is 24 times bigger than Iowa in terms of population (72 million vs. 3 million)— over the years the cooperative agreement has fostered friendship, understanding and trust as well as exchanges in education, culture and, importantly, trade.
It also helped make Iowa a favorite of China’s current President Xi Jinping. President Xi was a provincial official of Hebei when he first visited Iowa to learn more about agriculture during a Sister State exchange in 1985. Xi calls the people he met on that first visit, “old friends.” Xi was so impressed with Iowa’s hospitality, he returned to the state in 2012, just before becoming president of China.
In late October, some 180 Chinese delegates mostly from Hebei came back to Iowa to mark the 30th anniversary of this remarkable relationship. The Principal hosted the delegation for an entire afternoon’s worth of important meetings, celebration and the pinnacle of the day: the signing of 20 cooperative agreements between Iowa and Hebei. The total value of trade and investment transactions as a result is expected to be over $1 billion.
I’ve had the opportunity to meet with leaders in China many times since The Principal opened its first office in Beijing, nearly 20 years ago. Iowa’s current governor, and his predecessors, have also met with Chinese government officials many times in recent years. There are probably no more important meetings than the ones that take place through the Sister State relationship right here on our home turf.
For a global investment management and retirement leader like The Principal, having our headquarters in Iowa has many advantages but it can, at times, be a disadvantage. Chinese officials and leaders, like many others around the globe, often assume that global financial services companies are based in well-known financial centers like New York or Boston. When they think of Iowa, they generally think agriculture.
The people-to-people exchanges through the Sister States program have been among the most effective ways to show first hand that Iowa is a global competitor not only in agricultural but also manufacturing, bio-science, renewable energy and financial services. During visits like the Oct. 21 & 22, our Chinese guests experience our genuine Midwestern hospitality while at the same time get a good look at the growing number of leading edge financial services giants located in the heartland state. Some 188 of are headquartered in Iowa.
Iowa exports to China have increased 13 times over the past decade, making China Iowa’s fourth largest export market. The strong Iowa-Hebei Sister State relationship has been an integral part in helping all of Iowa’s leading industries, including financial services, build relationships that result in greater cooperation and trade.
We’re honored to call Iowa home. We are equally honored to export our retirement and long-term savings expertise to emerging markets in Latin America and Asia. In China specifically, we are working toward helping the government build a secure retirement future for its citizens.
While federal and state government diplomacy results in official policy, it’s the Sister State connection that builds true understanding and trust. And that is priceless.