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Demand Kicks State's Exports to New High

Economy: The 18.7% 4th-quarter growth caps California's best year as it met needs for computers, electronics.


California's exports in October-December soared 18.7% to an all-time high for any quarter, capping the state's best year as foreign demand for computers and electronic components showed no signs of slowing, according to figures released Thursday.

California shipped nearly $130 billion in goods last year, about 21% more than the previous year and $17.3 billion ahead of its closest competitor, Texas. The previous full-year record was set in 1997.

The state's rate of export growth was nearly double the nation's as California accounted for a record 16% of U.S. exports.

Mexico, Japan and Canada retained their positions as California's top three export markets. But the steepest growth was in shipments to Thailand, which leaped 62%, and China, up 44%.

Exports to China, which came to $3.85 billion, are expected to accelerate with that nation's imminent admission to the World Trade Organization.

"I think we're seeing just the tip of the iceberg in trade with China," said Lon Hatamiya, secretary of the state's Technology, Trade and Commerce Agency.

For the fourth quarter, as the U.S. economy was beginning to slow, California generated $35.18 billion in exports of manufactured and farm goods.

Growth in the global economy deserves most if not all the credit for California's "quite impressive" increase in exports, said Anil Puri, dean of the College of Business and Economics at Cal State Fullerton. "By nature, exports are a function of the economic health of our trading partners."

But with a slowing economy expected both domestically and abroad for the first half of this year, Puri said matching last year's export growth will be all but impossible. "I think the issue this year is how bad are things going to get," he said.

Still, some good news for the state's export sector is that the current electricity crunch isn't expected to significantly boost overhead costs in the manufacture of electronic components, industrial machinery and computer equipment, which together account for nearly half of all California exports.

Brad Williams, a senior economist for the state's Legislative Analyst Office, said electricity used in the assembly of those products tends to account for no more than 2% of their total manufacturing cost. "I wouldn't expect an increase in energy costs to have that much impact on the high-tech export sector," he said.

The export data were reported by the Institute of Social and Economic Research at the University of Massachusetts, which compiles export statistics every quarter for the federal government.

Mexico, recovering from its financial turmoil of the mid-1990s, purchased $19.03 billion in goods from California last year, posting a nearly 28% increase over 1999. Japan and its still-sluggish economy, meanwhile, reversed course last year and saw a 25.6% jump in California exports after posting a nearly 6% drop in 1999.

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