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State's Exports Expand to $33.7 Billion in 3rd Quarter

Economy: High-tech goods to Asia and Mexico send sales 22% higher than year-ago period.


A voracious appetite for high-technology products, particularly in Asia and Mexico, pushed California's third-quarter exports to $33.7 billion, a 22% increase over the previous year, state trade officials said Wednesday.

This raised the state's exports for the year to a record $94.5 billion. Mexico retained its recent ranking as the state's top export market, ahead of Japan.

The strength and geographic diversity of California's overseas sales are particularly heartening, coming at a time when the U.S. economy may be cooling down, according to Tom Lieser, senior economist at the UCLA Anderson Forecast.

California's third-quarter export sales totaled $5.2 billion to Mexico, a 29% increase; $2.3 billion to South Korea, up 34%; $1.5 billion to Germany, a 27.5% increase; and $984 million to China, a jump of 56%.

But Lieser said the third-quarter figures also demonstrated the state's vulnerability to a slowdown in the technology sector, since two-thirds of the state's exports fell into that arena. On Tuesday, Gateway Computers joined a growing list of technology firms that have warned of slowing demand and decreased profits.

"I don't think anybody believes this high-tech production is going to go away any time soon, but we might see a stumble due to the performance of the stock market," he warned.

Lon Hatamiya, the state's chief trade official, said it is too early to start worrying about a technology contraction, given the continuing strength of overseas demand for California's expertise and products.

"It's premature to make that determination," said the secretary of the California Trade and Commerce Agency. "All indications show California's economy remains strong."

Hatamiya was particularly heartened by the state's $4.3 billion in third-quarter sales to Japan, a 31.5% increase over the previous year. He believes the ailing Asian giant, the state's second-largest trading partner, might finally be turning the corner.

"I think there's strong indication of a nice rebound there," Hatamiya said of the Japanese economy.

California also is counting on continued improvement in its economic relations with Mexico, where incoming President Vicente Fox, a former Coca-Cola executive, has vowed to push privatization and banking sector reform. To help small and medium-size California firms sell more goods south of the border, the state recently opened 14 trade centers at community colleges and small-business development centers.

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