China and the World

Sweet home Alabama

Pine Hill wins crucial investment from Henan copper firm

Alabama Lieutenant Governor Ivey speaks to a crowd at Thompson Tractor in Birmingham, Alabama

Ni hao, y’all: Alabama’s Kay Ivey

It has become a familiar story. A Chinese company sets up a manufacturing plant in a distant land. Its construction is overseen by Chinese engineers who live in a separate compound eating Chinese food and interacting with the locals only at events like Chinese New Year, when they set off fireworks together in ritual celebration.

This particular overseas investment tale doesn’t come from a new project in Africa – where the complaint about the aloof Chinese is most frequently heard – but instead from a Chinese firm setting up in America. In this case, 45 engineers from Henan’s Golden Dragon Group have spent three years supervising the building of a $100 million copper tubing plant in Wilcox County, Alabama.

This is an impoverished part of the United States (“backward” is the word used by the People’s Daily to describe Pine Hill, where the factory will employ 500 people) and the locals have dubbed it Project Hope for bringing jobs to an area where unemployment is almost three times the national average.

“This is a real opportunity for our folks to get trained and do good,” says Kay Ivey, a senior Republican politician from the area.

Pine Hill won the bid for Chinese investment over 62 other potential sites in the US thanks to a combination of cash, connections and charm, local newspapers have reported. Wilcox County gave the Chinese company 100 acres of an industrial park and a break on local property taxes. It will offer more financial incentives at both state and local level worth as much as $200 million as long as Golden Dragon maintains certain employment levels.

Alabama’s Governor Robert Bentley and Thomasville mayor Sheldon Day are also credited with networking furiously to win the deal. The People’s Daily reports that Bentley met a delegation from Golden Dragon the day after he took office, while Day travelled to China to forge closer economic ties, seeking the advice of the Hong Kong-based SoZo Group, which helps Chinese companies seeking a US presence. It suggested that Day try to win the Chinese over with personal touches that made them feel at home. So Day invested in tins of Chinese cookies wrapped with the Golden Dragon logo, with the word welcome printed prominently in Mandarin on the front. They proved extremely popular with the Chinese delegation, which was soon “grabbing cookies everywhere and stuffing them into their pockets,” Day says, although news agency AP reports that a tray of homemade banana pudding was much appreciated too.

Pine Hill is just one of hundreds of American towns keen to win investment from Chinese firms. “Get off the plane and the mayor is waiting for you,” Hong Kong billionaire Ronnie Chan told AP. The news agency added that a symposium in Alabama also attracted dozens of potential Chinese firms.

On sale were T-shirts reading: “Ni hao, y’all” — a combination of the Chinese version of “hello” with a colloquial Southernism, AP says.

Golden Dragon’s new plant will make precision copper tube for large US clients such as Houston-based air conditioning manufacturer, Goodman Man. It is the group’s second foray overseas following the establishment of a plant in Mexico in 2009. That reduced shipping costs to the US market and brought Golden Dragon closer to its American clients. But in 2010 anti-dumping duties on Chinese copper tubes forced another rethink. Alongside increases in labour costs at home, these measures are the real driving force behind Golden Dragon’s decision to establish an American plant. Tianjin Pipe is building its own tubing plant in Texas for the same reasons.

Two other Chinese firms with factories in Alabama are Continental Motors (located in the city of Mobile), which makes piston engines for aircraft, and Shandong Swan in Montgomery, a saw-maker for cotton gins.

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