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U.S. Ambassador Lends Home State a Hand in Selling Tennessee Business

September 6, 1996

BEIJING (AP) _ Since arriving in Beijing this spring, U.S. Ambassador James Sasser has been scurrying to boost business ties _ especially for his home state of Tennessee.

His work was evident this week, when the Tennessee Valley Authority _ the largest U.S. electricity producer _ signed agreements to help China produce hydroelectric power and develop one of its most flood-prone river basins.

At the same time, Tennessee Gov. Don Sundquist joined the TVA in playing host to a conference for business executives, mostly from Tennessee, interested in cracking the Chinese market.

The appointment of the former Democratic senator from Tennessee as ambassador couldn’t have come at a better time for the TVA, which is trying to expand internationally as it prepares for deregulation of the utility industry.

Sasser helped open doors, provided advice and welcomed conference members to his residence for a reception.

``It has been a great help to have Ambassador Sasser here,″ said TVA Chairman Craven Crowell, who traveled to Beijing to attend the conference and meet with Chinese officials.

The U.S. government-owned power producer manages the 650-mile Tennessee River system and runs dozens of plants that provide power to seven southern states. The agreement with China calls for the TVA to help modernize and automate the country’s aging hydroelectric plants. Another agreement could lead to the TVA’s involvement in developing the Han River system.

With dozens of factories running under capacity because of power shortages, China plans to increase electricity production by 40 percent over the next five years. And as disastrous floods this summer throughout much of the country demonstrated, much needs to be done for flood control.

That’s why China needs outside help.

The TVA has developed computerized systems for flood control that can anticipate spring runoff and accordingly set reservoir levels. China is interested.

``Why reinvent the wheel?″ Crowell asked. ``They can look at our example and benefit from it. We also can benefit from their experiences.″

The TVA is not expecting to manage Chinese projects itself. As a U.S. government agency, it will assume only a consulting role. But in that role, it is hoping to improve business in its home state.

Dozens of Tennessee executives _ bankers, real estate developers, auto makers, contractors, engineering firms and others _ were interested enough by the prospect to travel to Beijing.

The conference did not paint a rosy scenario. Executives warned of arbitrary law enforcement, tricky contract negotiations, fickle consumer demand and changes in tax policies that raise the cost of doing business in China by 40 percent.

``The negotiation never stops. You will constantly be revisiting sensitive issues,″ said Jamie Horsley, corporate director of Motorola’s government relations in China.

But for the Tennessee Valley, and for the rest of the United States, bypassing China means losing the opportunity to tap the world’s largest potential market, Crowell cautioned his fellow Tennesseans.

``More economic development means more economic opportunity,″ he said. ``The confidence Chinese have in TVA will open doors for the private sector in the Tennessee Valley.″

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