Hawai'i and China may reach agreement by the end of the year to feature Island products at a showroom in Shanghai, Gov. Linda Lingle said yesterday, which could help small and medium-sized businesses gain a foothold in the world's largest market.

The proposed "Hawai'i House" in Shanghai would showcase Island products for Chinese retailers to sample. The showroom would allow Hawai'i companies to advertise products without going through some of the obstacles of breaking into the Chinese market.

"It's hard to break in if you're a small- to medium-sized company, yet there are huge opportunities for these companies in our state," Lingle said at a news conference at the state Capitol after a two-week visit to China.

"This liaison we've made with the Ministry of Commerce is going to be very, very important, whether it's for logistics, distribution, media relations, all the things a small company will have trouble doing on their own will be able to happen through this Hawai'i House."

Lingle praised the decision last week by the Hawai'i Tourism Authority to spend $448,000 to set up a Hawai'i booth at the Shanghai World Expo from May to October.

Lingle said she expects to attend the World Expo, which could attract more than 70 million people, and hopes to bring a delegation of Hawai'i business, community and education leaders.

Along with promoting Hawai'i as a tourist destination and trade partner, the booth will tout the first nonstop flight service from Beijing to Honolulu next year by China's Hainan Airlines.

Lingle met with Hainan Airlines' executives on her trip and said the airline had several issues to resolve, including joint marketing and help with ensuring that Chinese travelers make the return leg back home.

Lingle said she also met with Jon Huntsman, the U.S. ambassador to China, about the appointment of point-of-contacts for Hawai'i at the five U.S. consulates in China. The governor also said she discussed the process for last-minute visa applications from China.

Lingle said she was told that 80 percent of all visas applied for in China are granted, and that those that are rejected are often turned away because the paperwork was not properly completed. The governor said she shared the visa information in interviews with Chinese media.

"Because there is a disconnect between the perception of the difficulty of getting a visa and the reality of actually four out of five people who apply for a visa, get one," she said.

Lingle and her delegation also discussed potential energy partnerships with China ahead of the state's planned Asia-Pacific energy summit next August.

Lingle is scheduled to leave today for the Mainland to attend the Republican Governors Association annual meeting, which is being held in Austin, Texas.