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Asian carp scourge, no problem: sell them to China

Nerissa Michaels / AP

This early Dec. 2009 photo provided by the Illinois River Biological Station via the Detroit Free Press shows Illinois River silver carp jumping out of the water. Many fear that the Asian carp, which can reach 4 feet long and weigh up to 100 pounds, will wreak havoc, not by attacking native fish, but starving them out by gobbling up plankton.

By Adrienne Mong, NBC News

BEIJING –They are a feared species, threatening to invade America’s Midwest and cause the collapse of an ecosystem and a $7 billion industry.

They prompted one U.S. lawmaker to say, “We are not in a go-slow mode. We are in a full attack, full-speed-ahead mode.”

“They” are Asian carp.

The fish were imported from Southeast Asia in the 1970s to help clean ponds at wastewater treatment facilities and fish farms in the American South. 

But they escaped into the Missouri and Illinois rivers during flooding of the Mississippi River. A twenty-pound Asian carp measuring three feet long was found just six miles south of Lake Michigan in July 2010.

Biologists worry that the invasive fish will starve native ones to death. A hardy creature that breeds easily and with no natural predators in the U.S., the Asian carp can eat up to 40 percent of its body weight in plankton every day.

Concern is so great that Asian carp have been “the subject of state lawsuits, EPA and Congressional hearings, and U.S. Supreme Court motions,” according to a U.S.-based environment magazine.

A task force comprising more than 20 state, regional, and federal officials monitors the fish’s every move.

There’s even a carp czar, appointed by the White House, to oversee the $80 million federal effort to keep the Asian carp from getting into the Great Lakes. 

But the state of Illinois has a simpler solution.

Send them to China.

‘If you can’t beat ‘em, you eat ‘em’

A few years ago, Chinese-American businessman David Shu was on a trip to China, where he met some clients who had heard about attempts to poison the Asian carp in Illinois rivers and asked, “Why are they killing the Asian carp?”

Shu teamed up with Ross Harano, who had just stepped down as Illinois trade director, to find a way to persuade Chinese to buy Asian carp from the state.

The problem was one that anyone who’s ever set foot in a Chinese restaurant knows: the Chinese like their seafood fresh. That’s what the restaurant aquariums are for – to keep fish and shellfish alive until the very last minute.

The Asian carp from Illinois were going to be sold frozen; moreover, they were too pricey for local Chinese consumers.

So Harano, who is now Director for International Marketing at Big River Fish, found himself mapping out a marketing strategy that ultimately made more economic sense than simply just trying to pit their frozen product against local varieties sold live in China.

Coining the term “wild-caught” to market the Illinois carp, Big River Fish try to emphasize its freshness. 

“There are no pollutants,” said Harano in a conversation with NBC News. “The fish feed on algae in Illinois rivers. They have a very non-muddy taste.”

“We sell it as a high-end fish to high-end restaurants, so the cost is not an issue,” he said. In particular, Big River Fish is ringing up sales mostly in northern China. “There’s a better market for fish like this in northern China than down south,” he added.

In July 2010, the Beijing Zuochen Animal Husbandry Co. agreed to buy Asian carp from Big River Fish. The aim was to ship at least 30 million pounds of fish by the end of this year. The small start-up from Illinois could make $20 million a year exporting the carp to China.

“If you can’t beat ‘em, you eat ‘em,” said Illinois Gov. Pat Quinn at a much heralded signing ceremony.

The deal seems an elegant solution to a worrying ecological problem. 

But it also appears to address, in a more modest way, another issue: unemployment. 

With a state grant of $2 million, Big River Fish is in the final stages of acquiring a new 10,000-square foot plant in Pike County, to which it will add another 30,000-square feet, enabling it to reach its export target.

The new plant is not the 80,000-square foot facility Big River Fish had hoped to purchase back in March, owing to a paperwork glitch. The hiccup put the company “behind track” on its timetable, CEO Lisa McKee acknowledged to NBC News.

Once the new plant is secured – hopefully by Nov. 1, according to McKee and President Rick Smith – Big River Fish will increase its plant work force from 12 to 61.  An additional 120 jobs will come from hiring more fishermen to harvest more carp.  Not insignificant, says Harano, for a county of 17,000 people that in 2010 registered more than 10 percent unemployment.

Slowly creating jobs via China
The Big River Fish deal exemplifies the kind of salesmanship Quinn wants for his state. He continued to tout the culinary advantages of Illinois carp even last month during a rare trip to China.

“We have wonderful rivers in our state,” he told NBC News just before dashing off to attend a special carp luncheon. “Some of the freshest waters in the country, and the Asian carp we have are big and meaty. We catch them wild, and we ship them to China.”

Quinn peddled other Illinois specialties during his eight-day trip through China – with the aim of drumming up business, jobs creation, and investments in his home state.

In a major coup, he persuaded Xinjiang Goldwind Science & Technology Co., a top wind turbine manufacturer in northwestern China, to build a $200-million wind farm in Lee County, which will provide electricity to some 25,000 homes. 

It’s the largest U.S. project to date for Goldwind, and the Illinois governor stressed that it will create a dozen permanent jobs and more than 100 construction jobs.

Another deal announced on Quinn’s trip was for Archer Daniels Midland (ADM) to sell 180,000 tons of soybeans to China by the end of next year – a deal worth about $50 million. China already buys a quarter of all U.S. soybeans and is Illinois’ third largest exports destination.

Chinese trade & economic reforms critical
But there are skeptics about just how much Quinn and others can recoup his state’s job losses and whether these minute steps towards creating jobs by boosting exports will be enough.

There seems to be consensus among most pundits in Washington that selling more American goods to growing economies, like China, will mean more jobs. 

But getting more U.S. goods into China requires a few substantive reforms on the part of Beijing, skeptics say. 

One of those measures is currency reform, and the Chinese central government is balking at Washington’s efforts to get it to move more aggressively to strengthen the yuan against the U.S. dollar.  A weak yuan makes Chinese exports cheaper and imports from the U.S. and other countries more expensive.

More specifically, for Illinois, a survey from the Economic Policy Institute found that the Land of Lincoln lost 118,200 jobs in the past decade as a result of the U.S. trade deficit with China. 

In particular, traditional manufacturing industries took the brunt of the job losses: auto parts production, fabricated metal products, electronics, and specialty steel – areas in which the Chinese have sought to compete.

“Increases in the bilateral trade deficit with China will lead to growing trade-related job displacement in Illinois for some time to come,” said Robert Scott of the Economic Policy Institute survey, unless Beijing reforms its trade and economic policies – particularly on the Chinese currency. 

“Until those policies are reformed,” he wrote in an email to NBC News.  “The growth of imports and job displacement will vastly exceed the growth of export-supporting jobs for Illinois, and all other U.S. states.”