While Arkansas typically enjoys a healthy business relationship with China, the state has experienced an unusual decline in trade over the past ten years since its peak at $1.4 billion in 2012, then stabilizing at around $900 million in 2021. Worsening U.S.-China relations and recent global trade complications have impacted once promising opportunities leading to the cancellation or delay of a combined total of $1.4 billion proposed investment by four Chinese companies. Despite this, business leaders and government officials on both sides continue to seek opportunities for growth. Arkansas’ top employers, such as Walmart and Tyson, count China as major growth markets for their global businesses. In 2022, representatives from these companies were among a group of local government and business leaders that welcomed a Chinese delegation to explore opportunities in their home state. Arkansas remains an attractive destination for foreign investment as the region is a major supply chain hub, with proximity to the offices of over three hundred Fortune 500 companies. The University of Arkansas offers a unique dual degree program in business administration with Soochow University in China. The state also has a rich Chinese American history, especially in the Delta region, which saw the state’s first Chinese restaurant open its doors in 1895.

While Arkansas typically enjoys a strong business relationship with China, recent hurdles have slowed otherwise fruitful dealings–however, business leaders and government officials on both sides continue to discuss opportunities for growth. Arkansas has in the past few years seen its exports to China recover to pre-trade war levels, increasing a modest 1% in 2021 to stabilize at around $900 million, comparable to the 2008-2017 decade average of $950 million. Arkansas state-wide has experienced an unusual trending decline in trade with China over the past ten years since its high in 2012 with $1.4 billion in revenue. As a result of the COVID-19 pandemic, service exports from Arkansas to China fell by -39%.

As with many other Heartland states, Arkansas has been hard hit in its dealings with China due to both the 2018 trade war as well as the COVID-19 pandemic. During the trade war, Arkansas witnessed a 55% drop in its exporting to China from 2017 to 2018, with their top exports to China (oilseeds and grains, aerospace products and parts and miscellaneous crops) all nosediving during the dispute. Farmers across Arkansas witnessed significant drops in prices for crops like soybeans and cotton when China stopped buying American agricultural products. One survey estimated that nearly ⅓ of Arkansas’ companies imported steel and aluminum from China which were heavily tariffed by the U.S., negatively impacting their production. Moreover, the four Chinese companies slated to invest a combined total of $1.4B in the state as mentioned in our last report have witnessed major delays or terminations. Shandong Ruyi Technology Group’s proposed textile mill in Forrest City is an example of the kind of hurdles that Chinese FDI projects are facing; the U.S and China both imposed 25% tariffs on textile products, hampering the proposed mill which would need to both import textile machinery and then export its products to China, a situation only further stalled by pandemic-related complications.

Arkansas represents a curious case; given that its top export to China is oilseeds and grains, the state witnessed just a 3% increase in exporting of said crops–the smallest increase in the Heartland region, which on average experienced a 26% increase. Moreover, Arkansas’ exporting of meat products similarly experienced just a small bump of 3% in a year which saw massive hikes and declines in the industry’s China-bound exports. Mexico and China comprise the largest foreign markets for Arkansas poultry in 2021, accounting for 70% collectively. Arkansas’s exporting of miscellaneous crops took a hit, falling by -16%.

Despite recent difficulties, Arkansas nevertheless offers many opportunities for Chinese investment as evidenced by a Chinese delegation touring the state in July 2022, visiting with the local Chinese American community, and sitting down for trade talks with the Northwest Arkansas Council as well as several Fortune 500 Arkansas-based brands such as Walmart and Tyson. Northwestern Arkansas has many attractive qualities to potential Chinese investors, as the region acts as a major supply chain hub, with proximity to over 300 Fortune 500 companies which have established satellite operations in the area.

China ranks as Arkansas’ second leading place of origin for international students in 2022, with an estimated 274 students in attendance. This marks an estimated -48% decrease in enrollment of Chinese students from 2021 to 2022, and a -59% decrease from 2020 to 2022. The University of Arkansas offers a unique dual degree program in business administration with Soochow University in China. The state also has a rich Chinese American history, especially in the Delta region, which saw the state’s first Chinese restaurant open its doors in 1895. While Chinese international students account for a relatively small amount of the student population, the University of Arkansas’ Chinese Students and Scholars Association is one of the largest student associations on campus.

This data and content is updated periodically. The most recent update was January 2023.