How Michigan is Bringing Back Jobs from Chinese Investment

May 30, 2017 by

Michigan’s Gov. Rick Snyder, making his seventh trip to China this summer (an annual event – once each year he’s been in office), has a vision for developing a strong and lasting relationship between Michigan and China. His trips represent the planting a tree that he as Governor may well never enjoy in its full shade, but the people of Michigan and China will for years to come.

Governor Snyder understands that doing business in China is not the equivalent of a one-night stand. It takes time to develop the “guanxi,” or relationships, necessary to make and seal deals. As he remarked at the recent grand opening of the Michigan-China innovation Center –a non-profit organization he established to continue the China investment momentum he initiated – “I have more than transactions and business deals to show for my trips to China; I have genuine friendships with Chinese business and government leaders that have resulted in jobs and investment in Michigan.”

Snyder understands that knowing, respecting, and appreciating the history, customs, and culture of China goes a long way in cementing relationships and bringing investment and jobs to Michigan. The previous administration, for political purposes, played Peking Duck, never once in eight years in office traveling to the second largest economy in the world to develop government and business relationships to help tap into the 21st-century mother-lode of economic activity.

Governor Snyder created the Michigan-China Innovation Center for two strategic goals: 1) to seek Chinese Foreign Direct Investment (FDI), which helps create Michigan jobs and, 2) to identify goods and services that the Chinese need in order for Michigan industries rev up our their capacity and ability to export these items to China.

According to Forbes magazine, the innovation center is intended to be a portal between Michigan and China for business and investment. “Michigan has been very successful at attracting Chinese investment, a lot more investment than much larger states, in part due to strong connections in the automotive industry,” said Brian Connors, former China business development manager for the Michigan Economic Development Corp. Connors, who speaks Chinese and now serves as the center’s executive director, said:  “The center is charged with building and maintaining relationships in China, including businesses, government organizations, and associations”.

The Center is funded by the Michigan Strategic Fund board, part of the Michigan Economic Development Corp. that allocated $1 million a year for 5 years to start the center. Today, Michigan has nearly 300 Chinese-owned firms that contribute over $3 billion in foreign direct investment.

The longstanding Detroit Chinese Business Association has been building economic, two-way bridges between China and Michigan for over two decades. Its president, Brian Gao, proclaims, “there is not a more China-friendly governor or state in America than Michigan’s Governor Rick Snyder.”

Gov. Snyder has sent a clear message that Michigan is open for global business. He emphasizes, “There are a number of reasons Michigan is among the most committed U.S. states to building and maintaining a strong relationship with China. We have built strong relationships in China since our first mission in 2011 because we are excited to continue telling the Michigan comeback story and making the case that there is no better place in North America for Chinese companies to expand and create jobs than in Michigan. And in the globally interconnected world of today, China also offers extraordinary opportunities for Michigan companies to grow.”

Michigan: China’s Mid-West Home

Governor Snyder has not fallen into that familiar political trap of bashing China in order to mine political votes in an industrial and manufacturing-heavy state.  A former business executive before becoming Governor, he intrinsically knows that building bridges was a better strategy than digging moats or building walls – especially when it comes to the Chinese people. He knows political rhetoric does nothing to create job-producing relationships that the International Monetary Fund refers to as the “world’s fastest growing large economy.”

It does, however, play on fears of American workers, who have been rocked by the hyper-competitive, technology-driven global economy, where ideas and jobs can and do move around the world effortlessly. Making Michigan attractive for Chinese commerce and investment pays off, and offsets these global challenges presented by automation and capital flow. It is already paying off: according to Crain’s Detroit Business, China’s largest e-commerce company, Alibaba Group Holding Ltd., will host an event in Detroit this summer to lure Michigan agriculture firms to export to China.

The Governor has taken to educating the citizens of Michigan that industrial robots have eliminated up to 670,000 American jobs between 1990 and 2007, according to recent research from MIT. Bashing China is not going to bring those jobs back. Tapping a portion of the $45 billion the Chinese invested in the U.S. last year alone is a far better strategy – the creation of 300 Chinese companies that have set up shop in Michigan in recent years reinforces it.

Chicago’s Chinese Consul General, Hong Li states, “Governor Snyder attaches high importance to the cooperation between Michigan and China and has gone to great lengths to promote Michigan’s industries and business environment.” He continues, “He once told me that cooperation with China should become common sense for people in Michigan. I am very lucky to have such a great partner and believe that with his vision and leadership, Michigan’s friendly cooperation with China will enjoy greater development and more concrete results.”

As President Trump may have discovered after his first meeting with Chinese President Xi Jingping, recently at Mar-a-Lago, collaborating and cooperating with China is a much better strategy than bashing and bullying.

Our government at the national, state, and local levels has an important role to play in building economic bridges with China. In an era where the Chinese continue to seek places throughout the world to invest their new wealth, we should be bending over backward to make America an economic magnet for such investment and job growth for the American worker.

Michigan’s Capitol News Service quoted Alex Rosaen, Director of Public Policy and Economic Analysis at the Anderson Economic Group, a Michigan firm that tracks and researches economic trends throughout the country, “The Great Lakes region has millions of residents to buy products which is just one reason to invest here … these companies want to be closer to their customers, so they go to where those customers are.” 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.

Michigan, with extensive infrastructure needs, should welcome Chinese investment in shovel-ready infrastructure projects, especially those that involve transportation: roads, bridges, water and sewers. Michigan, already having much of what the Chinese want and need, from automotive know-how, tourism, agriculture, vibrant health care facilities, exceptional universities and community colleges as well as a welcoming environment, has become an economic magnet for Chinese investment.

As the 21st century unfolds, the competition and cooperation with China on multiple levels will ebb and flow. Wise leaders will continually seek to build mutually beneficial, two-way, “win-win” economic, cultural, and educational bridges. Just as Governor Snyder has done so adroitly by setting the Michigan table with China.

Source: How Michigan is Bringing Back Jobs from Chinese Investment – CHINA US Focus

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