Before he explains how Minnesota Wire & Cable Company, a manufacturer based in St. Paul, launched its exporting operations, Chairman and CEO Fred Wagner leads a visitor to a piece of hand-sewn Loatian art hanging near his factory door.

The picture features rows of Asian figures stitched to a blue cloth background, and it represents, at least according to Western stereotypes, the march of progress. Wagner traces the figures with a finger as he tells the story: Here you see many people living in rural areas; here they are in detention camps; here they are crossing the sea to foreign lands; and here, in the final frame, they all have cars.

Wagner laughs as he recounts the story because he knows the tale it implies -- that Asian countries need foreign wealth

and are crossing the sea to get it -- is a far cry from what's really happening on the Pacific rim. "Their standard of living has exploded," Wagner says. "Their economies are growing like crazy. There's money over there now."

And American companies are the ones crossing the sea to get it.

Asia is the hottest export market in the world right now, so hot that companies as small as Wagner's and even smaller feel they must establish a presence.

In Minnesota, exports to Asian countries grew by leaps and bounds between 1992 and 1995. Minnesota exports to Malaysia alone grew almost 58 percent -- from $142,777 to $336,440 for those years -- according to figures compiled by the U.S. Department of

Commerce and the University of Massachusetts at Amherst. State exports to Thailand increased 46 percent, to $317,546, while those to Singapore increased 45.9 percent, to $295,233.

Canada remains Minnesota's No. 1 export destination, a position it has held for the last 10 years since the U.S. Department of Commerce has been tracking trade numbers, but in 1995, Asian countries made up six of the top 10 export markets for Minnesota manufactured goods.

The rise of Asia has been matched by a decline in Minnesota exports to some European markets. Both the Netherlands and the United Kingdom saw a reduction in the number of Minnesota exports headed there. For the last three years, Japan has also experienced a reduction, but

for the first half of 1996, exports to that country were up 41.2 percent over those during the same period in 1995, according to the Minnesota Trade Office.

The growth of Asian markets in the portfolio of Minnesota's export companies can be explained simply enough: It's the people, the masses and masses of people. China is the most populous country in the world, with an estimated 1.2 billion people. For years, it was a closed market, but now it's opening up. There are similarly huge markets in Indonesia, where 203 million people live in an area the size of Alaska; in Malaysia, where 19 million people live in an area smaller than Iowa; and in the rest of Southeast Asia, says Kathy Stone, communications director at the Minnesota Trade Office. "We don't even call these countries Third World

anymore. We call them 'emerging.'"

Minnesota Wire & Cable, which manufactures just what its name suggest, has been in the export business for 10 years. Last year it created a wholly owned subsidiary, Minnesota Med-Equip, to handle international sales of new and refubished medical equipment and consumables. The creation of the subsidiary resulted almost directly from the growth in these developing countries. "It's utterly stupid to ignore the world market," Wagner says. "That's the growth area."

"If you look at the Twin Cities," says Maren Christenson, Minnesota Med-Equip's international development manager, "they are tearing down hospitals because they are not getting enough use. In Kuala Lumpur [Malaysia],

That kind of growth is too alluring to ignore, even for a company as small as Minnesota Wire & Cable. The company, which employs 165, has total revenue of$9.5 million. Its subsidiary, Minnesota Med-Equip, accounts for 8 percent of its revenue and has only three full-time employees. That's small when compared with 3M, which posted $1.3 billion in profits on international operations in 1995. Nonetheless, Med-Equip's countribution is significant, Wagner says. he expects export revenue to increase to 40 percent of total company revenue within five years. "Minnesota Med-Equip right now is a tiny part of our company," says Wagner. "But it is very much the future."

For Midwest Automation of Minneapolis, export sales have meant the difference between success and failure. Five years ago, Midwest Automation was battling for survival after a recession left the housing and construction industries -- its primary clients -- without money to spend on the industrial woodworking equipment it makes.

"Our equipment is large-capital equipment," says Kenneth Holley, Midwest's president. "The average price is over $50,000. During that recession, banks weren't giving credit to the smaller companies who are our clients. So for two or three years, we were doing very little selling domestically, and we were kind of forced into doing exporting just as a way of survival."

During the 1991 recession,

Holley packed up some of his company's machines and shipped them to a trade show in Hannover, Germany. It was a bold move because American companies were virtually unknown in the foreign woodworking markets and therefore not highly regarded. Midwest Automation was one of only five American companies out of 1,600 industrial woodworking companies at the show. Holley had to borrow $40,000 to cover the cost of attending the show.

All the equipment sold, and Midwest Automation grossed about $700,000. "During the recession, that was the difference between surviving and not," says Holley. "It was daunting at first, but it was literally a matter of our survival."

Despite Midwest Automation's success, few of its domestic competitors have followed the same route. In recent years, Holley says, the number of American companies participating in international trade shows has grown to only 10 although there are more than 150 companies in the category. "People in the industrial woodworking industry have survived with just the domestic market," says, Holley. "And they have just ceded the rest of the world to the Europeans, the Taiwanese, Japanese, and Koreans."

Even with domestic sales on the rise, Holley has no intention of pulling Midwest Automation out of the world market. "That show opened a lot of doors for us, and we started seeing the potential," he says.

Midwest Automation's customers from that first trade show became their foreign distributors and now contribute 40 percent of Midwest's $6 million in 1995 revenue. The 50-employee company exports machines to 25 countries, including Germany and Australia. China alone accounted for about $1 million, or 20 percent, of 1995 revenue, though Midwest Automation's relationship with its Chinese customers and distributors didn't come easily.

"It's one thing to get one order for one machine," Holley says, "but we were looking for a relationship. And the biggest obstacle over there was just gaining their confidence. In China, they want to deal with the owner, particularly if it's a small company. So I just basically traveled a lot, got to know them, and built a personal relationship with them."

Christenson of Minnesota Med-Equip echoes Holley's observation. "You need to develop a relationship with people, get them to trust you," she says. "In a way, the product almost becomes secondary to the relationship." At Minnesota Wire & Cable, for example, a handmade welcome sign, written in Thai by one of the company's Thai factory workers, still hangs in the lobby, long after the delegation of foreign visitors has gone.

Cultural differences can be a roadblock to building a relationship, no matter what the size of the company. For example, in China, creating a trade show brochure presents all kinds of unforeseeable obstacles, says Christenson. "Even the colors you use have some meaning. Green is generally not considered a good color for China. But red or gold is. One company I

know incorporated the dragonfly into its brochure because that is a symbol of good luck in China. Most companies that are exporting don't even realize they need to be aware of these things."

The Minnesota Trade Office can be a valuable resource for companies struggling to comprehend a foreign culture. "It's just a common courtesy," says Kathy Stone, to show enough interest in a foreign culture to learn some of a country's language and customs. Her office has an international library, holds trade seminars, and sometimes sends delegates with companies on trade missions. It can also direct companies to other resources, such as the Small Business Administration or American chambers of commerce abroad.

In addition to their advice to be well prepared, trade officials

and those in the field offer this counsel: Be patient.

"Don't go in it for the short term," Christenson says. "you're not going to make a quick buck." Minnesota Med-Equip has invested $300,000 in its export efforts, and Christenson says the company expects a profit within two years.

And go with your eyes open, ready to learn, the pioneers say. Midwest Automation redesigned the exteriors of most of its industrial machinery before the Hannover trade show. Holley watched his European customers during the show and realized that aesthetics appealed to them and improved the sales of his equipment.

"[Exporting] takes some time and experience to get to know the ropes,"

Holley adds. "I think that scares off a lot of people. The only way to do it is to take that step of faith and find out what it takes."