NEW YORK - Iowa may be the second stop of Chinese Vice-President Xi Jinping's visit to the United States this week, but the business community in the state has high expectations.

"This visit is probably the most significant thing that has happened in the state of Iowa since 1959 when the Russian Premier Nikita Khrushchev visited here (to create a better relationship between Russia and the US)," said Larry Zimpleman, CEO of the Principal Financial Group.

"This visit, I would argue, is more important than that, given China's role in the next decade," Zimpleman added.

Zimpleman hopes Xi's Iowa visit will boost the business relationship between the state and China. He thinks it will be an opportunity for the delegation to see areas for potential cooperation beyond agriculture.

Iowa's exports to China have increased by 1,300 percent from 2000 to 2010, according to the US-China Business Council. It is one reason why corn and soybeans from Iowa are commanding high prices in the commodity markets.

"(But) Iowa is more than agriculture. It is a very strong state for financial services, with many well-known financial services companies operating in Iowa," Zimpleman said.

Des Moines-based Principal Financial Group is a global financial services provider with more than 18 million customers worldwide. It set up a representative office in Beijing in 1994.

Before then, Principal had been watching the China market for a while for growth opportunities, Zimpleman recalled.

Since then Principal has started making local connections, getting acquainted with regulators and meeting potential business partners along the way.

In 2005, Principal set up a mutual fund joint venture with Beijing-based China Construction Bank (CCB) Corp. The venture, CCB-Principal Asset Management Company, Ltd 65 percent owned by CCB, 25 percent owned by the Principal and 10 percent owned by China Huadian Group (a Chinese power generation company) was formed to sell mutual funds in China through CCB, China's second-largest bank.

The joint venture has been doing well, according to Zimpleman, but that was only the first step.

Zimpleman said the company's next move will be to tap into the growing retirement industry in China. About three years ago, it started to enter the enterprise annuity market along with its mutual fund venture partner, the CCB.

China introduced enterprise annuities in 2004, which are a form of supplemental retirement savings programs that are voluntary.

"Our enterprise annuity (venture) is a joint application with China Construction Bank. What Principal is good at is the operational elements of the retirement plan business investing the money, and having the technology platform. We need a local partner who knows the local market and who can also provide some distribution capability for the company," Zimpleman said.

Principal is currently waiting for the State Council in China to approve the joint application with CCB.

China Daily