In 2021, Kentucky experienced a 48% increase in goods exports to China–the second highest in the Heartland Region. This upsurge reversed the downward trend that began after the 2017 peak. Specialty products such as racehorses and Appalachian ginseng are also gaining interests from China but not without its share of new challenges. Kentucky also enjoys robust two-way business relationships with China. Yum! Brands Inc., headquartered in Kentucky, has been very successful in China. Of its 2,400 new international KFC locations worldwide, 40% were in China. Many Chinese companies and investors find Kentucky an attractive destination because of its strength and legacy as a regional manufacturing center as demonstrated by Chinese acquisitions of Kentucky-based GE Appliance ($5.6B acquisition by Haier Group in 2016) and Lexmark ($3.6B acquisition also in 2016). Other smaller projects are also coming to the state such as Phoenix Paper in Ballard County, established by a subsidiary of one of China’s largest containerboard producers. Kentucky’s educational exchanges with China are also growing. Since the University of Kentucky signed an inter-university exchange agreement with Jilin University in 2011, the partnership has grown to 6 dual-university degree programs from bachelor’s degrees to PhDs.

In 2021, Kentucky experienced a 48% increase in goods exports to China–the second highest in the Heartland region. This upsurge hopefully marks an end to the steady decline of exports to China that Kentucky has undergone since 2017, which marked a high of $3.1 billion. 2021’s total goods exporting of $2.8 billion is however notably higher than the decade average from 2008-2017 of $1.6 billion. As a result of the COVID-19 pandemic, service exports from Kentucky to China fell by -41%.

The slump Kentucky has experienced in exporting to China these past several years began at the start of the trade war with Kentucky’s exports to China dropping 28% from 2017 to 2018. This difficulty has only been further exacerbated by the effects of COVID-19, as Kentucky’s top export to China of aerospace products and parts has fluctuated wildly. Other industries were hurt as well; namely, Kentucky’s bourbon distilleries. While big producers were able to find ways of avoiding tariffs, small producers were slammed with second order effects of the steel and aluminum tariffs imposed by the U.S. against China.

Much of 2021’s reversal of fortunes is attributed to Kentucky’s recovered exporting of aerospace products and parts which increased by almost 50% in 2021, jumping from a hefty $670 million in 2020 to over a billion dollars in 2021. Oilseeds and grains, Kentucky’s second largest export to China also witnessed a 16% hike, following regional trends in the increasing sale of animal feed to meet China’s ever-growing demand. This boom is also likely due in part to the active efforts of Governor Beshear and ex-Governor Bevin to strengthen the Kentucky-China relationship.

Kentucky has similarly increased their outbound investments in China; in 2021, Kentucky Fried Chicken International (of YUM Brands) opened 2,400 new locations (approximately one new location every four hours) about 40% of which were in China. Concerns have been growing as to the over-picking of Appalachian roots such as ginseng, which are in high demand on Chinese markets (Appalachian-grown ginseng being sold for as much as $9,000 per pound). The story of a man in Jackson County illegally trafficking turtles to China to be sold as pets made the local papers.

China ranks as Kentucky’s second leading place of origin for international students in 2022, dropping from first place in 2021, with an estimated 737 students in attendance. This marks an estimated -66% decrease in enrollment of Chinese students from 2021 to 2022, and a -69% decrease from 2020 to 2022. Kentucky’s educational exchanges with China are also growing. Since the University of Kentucky signed an inter-university exchange agreement with Jilin University in 2011, the partnership has grown to 6 dual-university degree programs from bachelor’s degrees to PhDs.

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