Legislation that would bar the Arkansas Economic Development Commission from establishing or maintaining an office in China narrowly cleared the state Senate on Wednesday.
The Senate voted 19-8 to approve Senate Bill 252, by Sen. Trent Garner, R-El Dorado, sending the bill to the House for further action. Eighteen votes were required for approval of the bill in the 35-member Senate.
Eighteen Republican senators and Sen. Larry Teague, D-Nashville, voted for the bill, while the other six Democratic senators, independent Sen. Jim Hendren of Sulphur Springs and Republican Sen. Jane English of North Little Rock, voted against the bill. Four other GOP senators voted present on the bill, and four other Republican senators didn't vote.
The Senate's approval of the bill occurred a day after it cleared the eight-member Senate State Agencies and Governmental Affairs Committee in a voice vote. On Feb. 4, the measure fell two votes short of the five required to escape the committee before the panel expunged that vote to clear the way for approval.
In last year's fiscal session, the Joint Budget Committee rejected Garner's proposal to close the office after the commission's executive director, Mike Preston, said the department already planned to trim the office's budget from $285,000 to $125,000 a year, starting in July, and employ an American citizen as a liaison in China.
Garner said one of America's biggest geopolitical threats is the Communist Party in China, which he said has a poor humanitarian record, problems with intellectual-property theft, an overly aggressive military and could eventually have the largest economy in the world.
He said his bill doesn't stop one industry in Arkansas from selling one widget to China or buying one widget from China.
"It has zero impact on the economic realities that Arkansas faces," Garner told his colleagues.
The Arkansas Economic Development Commission shut down its physical office in China last year, Garner said.
"The only thing this does is to put into code that very small policy to make sure that we retain that first step to address this huge generational problem here in the state of Arkansas," he said.
Afterward, Sen. Clarke Tucker, D-Little Rock, said he voted against the bill because his understanding is that Arkansas sells half of its soybeans to China and Arkansas produces more rice than any other state with China being the highest rice consuming country in the world.
"For the economic viability, not only of our farmers, but a lot of other industries, we need to be able to trade with China," he said.
Afterward, Gov. Asa Hutchinson said: "As I have said before, this bill sends the signal that Arkansas will not support its agriculture industry from soybeans to rice and will not engage the second-largest economy in the world."
"We would be yielding the competitive market, including Hong Kong, to all the other southern states which have offices in China," the Republican governor said in a written statement.
In February, Mike Preston told the Senate committee that the development commission has operated an office in China since 2008 to assist businesses in the largest consumer market in the world and the second-largest economy in the world.
The commission cut its consultants who represent the state in China from two to one last year, based on trade wars and economic considerations amid the covid-19 pandemic, he said.
"We still have an office there through a consultant, not a physical place," Preston told the Senate committee last month. "Our China office represents China, Hong Kong and Taiwan. This individual is actually a U.S.-based citizen who travels there frequently, and we refer to that as a China-based consultant."
He said 21 states -- including 10 of the 11 states in the Southeastern Conference -- have an office in China.
Last month, Jim Hudson, an attorney for the commission, said the consultant travels to China and may be working out of an office in China on an extended basis.