Later this year along the banks of the James River outside of Richmond, Virginia, a manufacturer of paper products based in northeast China will start construction of a new US manufacturing plant. The factory beat straw and corn stalks in the region in household products including napkins, paper and fertilizers, organic whole marked "Made in USA".
It is anticipated that the new US factory Shandong Tranlin Paper to generate about 2,000 new jobs in 2020 and is the latest Chinese company to invest in US manufacturing.
Foreign direct investment in China in the US amounted to $ 12 billion last year, up from $ 10,000,000,000 for the second consecutive year, the Rhodium Group, which tracks the Chinese money flows into the US It was three years ago in 2012, when for the first time ever foreign investment in Latin licked Chinese investment flows in the other direction to China.
Asian investments in America is nothing new. Japanese companies led the way in the 1980s, partly to evade tariffs. Avoid international property taxes again is partly why Chinese companies are coming to America. But Chinese investment in the US It is surprising and different from other forms-and since they alter the pockets of domestic manufacture.
Chinese investment in America has largely been linked to mergers and acquisitions. Chinese meat producer Smithfield Foods bought Shuanghui Group for approximately $ 4.72 billion. However, some Chinese companies are taking another tact and building manufacturing plants-oh-on American soil. Are spending hundreds of millions on new projects and expansions of existing US subsidiaries combined have jumped to eight fifty-five a year, from virtually none a few years ago, according to research rhodium.
Beyond tariff shift, the most important question remains why?
Known more for the manufacture of low cost and massive toys and cheap shipping containers textiles, China wants to move up the food chain. The GDP of China grew by 2014-the percentage yield 7.4 weakest in 24 years. As the economy slows, China wants to push into higher value products, including construction machinery expensive. But the production and sales of higher-margin goods require skills of advanced technology and innovation, sometimes more easily accomplished outside of China, where there is low-cost production.
And in an ironic twist of American jobs offshore, some Chinese companies are conducting "Made in USA" branding. "Foreign brands and quality control are increasingly important for the affluent middle class in China time", according to research rhodium.
But despite the generosity of production generated by foreign investment, some China watchers are cautious. The new production plants have stoked old fears about foreign investment. Are Chinese companies planting stakes in the US simply accumulate knowledge, and finally end the internal competition?
"Some of FDI is becoming strategically by the Chinese to collect pieces of high value government," said Stephen Ezell, senior analyst with Information Technology and Innovation Foundation in Washington.
Roy Dahlquist, an expert on economic development in Virginia, has traveled to China and back for 30 years and counting.
China has had on his mind long before Americans began buying shares of Alibaba e-commerce platform, or downloading WeChat microblogging application on their smartphones started.
For about 16 years, the Economic Development Association of Virginia has operated an office in China, and eventually moved to Shanghai in 2011. Meanwhile, an executive at the company's main role in the Tranlin company based in the province of Shandong of China and an MBA from the University of Virginia Darden School of Business in 2003.
The Executive noted future of the region easy access to Interstate 95, the Washington Dulles International Airport and the Chesapeake Bay. Navigation channels port Virginia run deep, and can accommodate some of the world's largest container ships. These are all the desired qualities for companies located abroad in search of open store in the United States.
Years later, Tranlin executives wanted to expand with a new role and fertilizer for plants in the United States. Initially focused on California, when the team launched infrastructure Virginia Chesterfield County, and local talent pool covering agriculture and the military. Naval Station Norfolk is the largest in the world naval complex. But the number of jobs funded by the federal government has decreased over the years.
It was in June last year Shandong Tranlin announced it will invest about $ 2 billion over five years to build a campus of 850 acres on the outskirts of Richmond in Chesterfield County. About 23 Chinese-owned companies already operating in Virginia, representing $ 9.51 billion in capital investment, including mergers and acquisitions, and more than 4,300 jobs.
"Virginia was in a position, which historically depended on the federal government, military, defense for a lot of jobs," Dahlquist, CEO of the Asia Society Virginia Economic Development said. "In our new economy, we can not do that."
The Tranlin project in Virginia and others planned new manufacturing facility will boost foreign direct investment from China in the US in the new year. "The outlook for 2015 remains very strong, with over $ 3 billion in deals outstanding at the time," according to an update published in January rhodium. And with oil prices hovering below $ 50 a barrel, half the cost of a year and the private buyers could lead Sino-US energy supplies in the coming months, according to rhodium.
Other Chinese companies behind new manufacturing plants in the United States include:
$ 218 million cotton spinning mill of Keer Group in South Carolina.
$ 60 million investment SANY office and space for manufacturing construction machinery in Georgia.
Production plant Lenovo computers in North Carolina in the amount of undisclosed investment.
Many new manufacturing projects have a strong green component.
If Japanese companies in the 80s brought lean practices, Chinese companies are pursuing advanced manufacturing that leverages product innovation and workflow.
The draft paper Tranlin, for example, take advantage of the small grain farmers in the region. Will be transformed straw and corn stalks-agricultural waste that would have been stretched to and other fibrous materials in household paper products.
Beyond the promise of advanced manufacturing, more Chinese companies are coming to America, and they face higher costs in China for land and labor, plus tariffs and other trade barriers. Chinese companies in the manufacture of metals, for example, localized production in the States after the US imposed antidumping and others in various metal products, according to rhodium. Related manufacturing projects include:
$ 1 billion investment in Tianjin Pipe steel pipe plant in Texas.
$ 100 million aluminum plant Nanshan Group unit in Indiana.
$ 100 million copper tubing plant precision Golden Dragon in Alabama.
But while the list of new US plants Chinese capital is growing, it is not a manufacturing boom. Chinese manufacturing foreign direct investment in the US is small, and Chinese companies represent a small fraction of the jobs to less than 100,000 Americans in all sectors of the US economy, according to Thilo Hanemann, research director with the Rhodium Group.
Some research actually suggests a decline in manufacturing jobs in the United States since China joined the World Trade Organization in 2001, and US bilateral trade with China increased. Although China has become the third largest exporter in Latin, Chinese products still far outnumber Americans to China products.
In manufacturing, the bulk of US sales to China involves raw materials, while the vast majority of Chinese sales to the US , finished product is manufactured. "The net result is a business relationship that clearly produce jobs for Chinese workers, but it costs jobs for American blue collar even though US exports to China grow," according to a 2014 US-China Commission Economic and Security review Congress.
But other observers say China speak Chinese investment threat is exaggerated, and that the United States benefits of Chinese investment. Ask Dahlquist of Virginia.
"We need manufacturing jobs," Dahlquist said. "We need a new approach that is less dependent on the federal government."