US hinterlands woo Chinese firms
PINE HILL, ALA.
Burdened with Alabama’s highest unemployment rate, long abandoned by textile mills and furniture plants, Wilcox County desperately needs jobs.
They’re coming, and from a most unlikely place: Henan Province, China, 7,600 miles away.
Henan’s Golden Dragon Precise Copper Tube Group opened a plant here last month. It will employ more than 300.
“Jobs that pay $15 an hour are few and far between,” says Dottie Gaston, an official in nearby Thomasville.
What’s happening in Pine Hill is starting to happen across America.
After decades of siphoning jobs from the United States, China is creating some. Chinese companies invested a record $14 billion in the United States last year, according to the Rhodium Group research firm. Collectively, they employ more than 70,000 Americans, up from virtually none a decade ago.
Powerful forces — narrowing wage gaps, tumbling U.S. energy prices, the vagaries of currency markets — are pulling Chinese companies across the Pacific. Mayors and economic- development officials have lined up to welcome Chinese investors. Southern states, touting low labor and land costs, have been especially aggressive.
In the case of the Pine Hill plant, tax breaks and some Southern hospitality helped.
Among other Chinese projects in the United States that are creating jobs:
In Moraine, Ohio, Chinese glassmaker Fuyao Glass Industry Group Co. is taking over a plant that General Motors abandoned in 2008 and creating at least 800 jobs. The site puts Fuyao within four hours’ drive of auto plants in Ohio, Kentucky and Indiana.
In Lancaster County, South Carolina, Chinese textile manufacturer Keer Group is investing $218 million in a plant to make industrial yarn and will employ 500. South Carolina nudged the deal along with a $4 million grant.
In Gregory, Texas, Tianjin Pipe is investing over $1 billion in a factory that makes pipes for oil and gas drillers. The company expects to begin production late this year or early in 2015. It will have 50 to 70 employees by the end of this year and 400 to 500 by the end of 2017.
The U.S. and China have long maintained a lop-sided relationship: China makes things. America buys them. The U.S. trade deficit in goods with China last year hit a record $318 billion. And for three decades, numerous U.S. manufacturers have moved operations to China.
The flow is at least starting to move the other way. One reason is that in the past decade, the cost of labor, adjusted for productivity gains, has surged 187 percent at Chinese factories, compared with just 27 percent in the United States, according to Boston Consulting Group.