State by State: China and Virginia Trade

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Virginia and China have developed a highly interdependent trade and investment relationship over the recent decades. In 2014, exports from Virginia to China of chemicals, paper products, waste & scraps, computers & electronics, and machinery (except electrical) accounted for US$973 million of the state’s total US$1.9 billion China merchandise export market. Virginia also exports more agricultural products to China than to any other nation, bringing the state US$691 million in 2014 alone.

China has also found profitability in the Virginian market. Imports from China accounted for 24.1 percent of Virginia’s total imports in 2014. From 2013-2014, Chinese exports to Virginia valued at US$5.847 billion, up 15.9 percent from the previous year.

Trade and Investment Opportunities


Virginia’s developed agricultural economy presents vast opportunities for continued trade with China. As of 2014, Virginia is the east coast’s second largest agricultural exporter after Georgia. Agricultural exports to China from Virginia grew by ten percent in 2014, and this number is expected to develop as Chinese consumers increasingly favor imported food products over those locally grown.

China is the United States’ top agricultural importer, and Virginian produce is particularly suited for China’s import preferences. Virginia’s primary agricultural exports to China include soybeans and pork, both of which have gained strong footholds in the Chinese market. The U.S. Department of Agriculture’s Beijing Bureau predict a 9.8 percent increase in pork exports to China by the end of 2015 as Chinese pork farmers continue to lose ground in the market. Soybeans and oils already equate to approximately 50 percent of China’s agricultural imports, and the demand for imported soybeans is expected to dominate the agricultural market through at least 2023.

In order to promote trade, Virginia has held an agricultural trade office in Hong Kong for over 20 years, and 2013 marked the establishment of a second Virginian agricultural trade office in China, this time in Shanghai.

Related Link IconRELATED: Investing in China’s Growing Health Foods Market

Investment Opportunities

In addition to agricultural trade, foreign investment between Virginia and China is also extremely prosperous. Virginia relies heavily on Chinese automobile part manufacturing, a field relatively open to foreign investment after the publication of China’s Catalogue of Industries for Guiding Foreign Investment 2015 Revision. Currently, foreign investors may aid in the production of automobile part producing, and may even fully manufacture automobiles (provided that at least 50 percent of the shares are held by Chinese nationals). Motor part imports to Virginia totaled US$33 million in 2013. China’s automobile and automobile part manufacturing industry is expected to reach US$567 billion by the end of 2015, with exports totaling US$32.4 billion. If met, China’s automobile industry will have grown by 9.7 percent from 2014.

Additionally, China has satisfied Virginia’s demand for office machinery such as printers, photo-copiers, and scanners. According to the U.S. Census Bureau, 9.8 percent of Virginia’s imports fell under the category of “office machinery” in 2014. Foreign investment into China’s production of this type of machinery is also encouraged under China’s 2015 foreign investment catalogue, and investors are not required to have a Chinese national as the primary shareholder. China is currently the largest exporter of office machinery in the world, profiting almost US$24 billion from exports in 2014 alone.

China has also begun to invest in the Virginian market. Chinese foreign investment in Virginia reached US$8.8 billion by the end of 2014 with almost 100 Chinese companies, such as China Telecom and Air China, investing in the state. “Smithfield foods”, a Virginian pork company, was purchased in 2013 by a Chinese firm, and China’s “Shandong Tranlin Paper Co.” announced plans in 2014 to establish its first U.S. paper mill in Virginia.

Tax Treaty – U.S. Trade with China    

The United States has signed a Double Tax Treaty with China. This can reduce tax burdens under certain circumstances in both trade and any China legal establishment. Please seek professional advice for specific China investment requirements. Treaty details can be found here.  

Further Support from Dezan Shira & Associates

Dezan Shira & Associates can service Virginia-based companies that are looking to further develop their operation in China. The firm can help companies establish a direct office in the country and can guide them through the affiliated tax, legal and HR issues that come with doing so. To arrange a free consultation, please contact our U.S. office at


Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit

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