Michigan pursues Chinese investment to reinvigorate manufacturing

By RAY WILBUR

Capital News Service

LANSING — While the presidential campaign linked job loss to outsourcing to foreign countries, Michigan’s efforts to bring Chinese investment are reinvigorating manufacturing plants that have been vacant for years.

Since becoming governor in 2011, Rick Snyder has made five trips to China and has  pushed initiatives that have brought 23 Chinese companies to the state, said Josh Paciorek, the governor’s deputy press secretary.

That’s created 3,541 jobs and accounts for $649.5 million invested in 11 cities, he said.

During a trip there last year, Snyder signed agreements to promote trade and investment with the Chinese provinces of Sichuan, Hubei, Guangdong and Zhejiang, as well as the city of Chongqing. Those regions have many auto companies and related suppliers, making them a natural fit for Michigan because of its pre-existing auto industry, Paciorek said.

An attempt to speak with employees from the Michigan Economic Development Corp for this story was unsuccessful because they’re now in China doing similar work.

Paciorek pointed to a recent investment in August, when Zhongding, a subsidiary of Anhui Zhongding Sealing Parts, a Chinese manufacturer, announced an expansion of its manufacturing facility in Cadillac, investing $4.3 million in a new building and new equipment to venture into the heavy truck and agriculture industries.

As an incentive, the project was awarded a $600,000 Michigan Business Development Program performance-based grant. It’s expected to create 125 jobs.

 In April, Paslin Co., a subsidiary of Wanfeng Auto Holding Group of China and auto manufacturer, announced it was expanding in Warren, investing $32.4 million and creating 150 jobs.

“As our economy keeps improving here at home, companies from all over the world will look to grow in Michigan,” Paciorek said.

And just last May, the Michigan Strategic Fund board, part of the Michigan Economic Development Corp., approved a $5 million grant to lure Chinese investment to the state, including setting up the Michigan-China Innovation Center in Detroit.

“The Great Lakes region has millions of residents to buy products which is just one reason to invest here,” said Alex Rosaen, director of public policy and economic analysis at the Anderson Economic Group, a firm that tracks and researches economic trends throughout the country.

“These companies want to be closer to their customers, so they go to where those customers are,” he said.

Michigan is one of only 12 states with more than $750 million in Chinese investments since 2000, according to the Rhodium Group, which analyzes global economic trends.

As China’s industry and economy continues to mature and become more like countries such as Japan and South Korea, it will continue to invest in the U.S. to be closer to their customers, Rosaen said.

And with many manufacturing facilities left vacant by American companies after the recession, that opens more doors for Chinese companies to invest in areas without having to build completely new facilities.

“It just makes sense,” Rosaen said. “We have all of this standing infrastructure for manufacturing and they have the business.”

Not all investments follow that model.  Some investment is in new construction.  

The luxury hybrid vehicles maker Karma Automotive — owned by the Chinese auto parts giant Wanxiang — opened a new technical center in Troy in October to house engineering and sales operations. The project is expected to generate more than $3.6 million and create up to 150 jobs.

The project will provide high quality jobs in engineering and technology, said Glenn Lapin, economic development specialist for the city of Troy.

“We’re excited about how these types of projects can provide our city with high-paying jobs,” he said. “We welcome the prospect of more Chinese companies coming to Troy and continue to work to bring them here.”