When the governor of China’s Shandong province came to town to pitch Georgians on investment, the locals made his jobs a whole lot easier.
During a Shandong Investment Cooperation Forum at the Omni Hotel, a string of testimonials from some of Georgia’s largest companies and the state’s top salesman made it clear that Shandong, a province of nearly 100 million people with a vibrant port and a relatively open investment climate, is a crucial entry point into the Chinese market.
Leslie Griffin, United Parcel Service Inc.’s vice president for international public affairs in Washington, said she had just returned from a meeting of trade ministers from the Asia-Pacific Economic Cooperation bloc in Qingdao, the economic hub of the province.
“I can tell you that Qingdao was a beautiful host city and that Mayor Zhang Xinqi made us feel most welcome. ,” Ms. Griffin told the audience, noting that UPS employs about 200 people in Shandong province.
The package delivery and logistics giant set up a representative office in Qingdao in 2002, and now it’s one of five cities where UPS can offer domestic express services within China. For the most part, UPS’s express business has been limited to import-export activities, but the Chinese government is gradually opening the sector.
That’s one reason the company provided in-kind delivery services for a Georgia delegation led by Gov. Nathan Deal that installed the state’s new investment office there last August.
Chris Carr, who wasn’t yet the state’s economic development commissioner at the time, said that trip was just recent evidence of the strong partnership the state and province have enjoyed since 2004. About 10 companies with Shandong operations have located in Georgia, accounting for 120 jobs, he said.
In July, Georgia will be an honored guest at the 2014 Qingdao International Horticultural Exhibition, which will feature a Georgia day and a pavilion designed by the landscape architects at the University of Georgia. The economic development department will seek to capitalize on the exposure, leading a concurrent mission of educational and tourism leaders to the event.
“Georgia is the only U.S. state invited to participate in the expo, and we are excited and honored by this prospect,” Mr. Carr said during the investment forum.
AGCO Corp., a tractor and farm equipment manufacturer based in Duluth, was also effusive about the business opportunities it has found in Shandong.
AGCO purchased an 80 percent stake in Dafeng Machinery in 2011, taking over its combine manufacturing facility in the city of Yanzhou.
Larger than tractors, combines are massive harvesting machines used on industrial farms. The Yanzhou factory is one of six opened or acquired by AGCO in China over the past three years, said Eric Raby, vice president of global seeding and tillage at AGCO.
“We’re really excited with the relationships that we’ve had, not only with the city but also with the province and the government officials and the employees,” Mr. Raby said.
As China urbanizes, its people’s dietary habits are changing. They’re now eating more processed foods and meat, which requires greater production of grains for animal feed. China has many industrial farms in its northeast, but many subsistence farmers around the country still operate with animals and manual tools.
China has embraced new farming practices and technologies more quickly than many other countries, and AGCO’s operations there continue to inform its forays into other countries, Mr. Raby added.
“We introduce new technology to the market, but we also learn some very valuable lessons in the market that we can then apply in other markets around the world, so it is truly a two-way street. It’s a symbiotic relationship,” he said.
Shandong Gov. Guo Shuqing said other firms like AGCO can help the province move up the value chain in many of its top industries, including energy, manufacturing and tourism.
“We need to speed up the service industry,” said Mr. Guo, who brought a delegation of leaders from 20-plus Shandong companies to Georgia parallel to the biennial meeting of the Regional Leaders Summit, a club of top leaders from seven provinces and states around the world. They met in Atlanta to share best practices on hosting sporting events and advancing their logistics industries.
The Oxford-educated leader, one of few Chinese officials in recent years to address Georgians in English, was honest about the challenges facing his province.
“We are going to take more forceful measures to improve the ecological environment. To be frank, nowadays we are suffering a lot from smog. We have very heavy problems with air pollutants,” he said.
Shandong is also ramping up urbanization, building more public housing and energy infrastructure as it brings more residents into the city to help raise their standards of living, Mr. Guo said.
He framed these challenges as investment opportunities for Georgians as the province carries out the central government’s admonition to create new “silk roads” linking China to the outside world through overseas trade and cooperation.
He added that planned reforms by China’s central government will make the country a more attractive place for foreigners.
“This year is the year of reform,” he said, adding that Shandong is a testing ground for changes in China’s financial industry and system of land distribution. “We are going to open wider to the world.”
That opening has already benefited Georgia, which is home to the U.S. headquarters of Qingdao-based electronics and appliance manufacturer Hisense. Its cross-town rival, Haier, has a refrigerator factory in Camden, S.C., and has set up logistics operations near the Port of Savannah.
Hisense Group Vice President Lin Lan said at the forum that the company hopes to be more firmly “rooted” in the communities where it operates, like Suwanee, Ga.
China’s new Consul General in Houston, Li Qiangmin, said he hopes more companies will follow the lead of those from Shandong and Georgia.
“I’m confident that with the sustainable and pragmatic efforts of the state of Georgia and Shandong province that … we will achieve more fruitful results,” he said.
While in town, Mr. Guo, the governor, met with his Georgia counterpart, Mr. Deal. He also presided over the opening of a new exhibition of photographic reproductions of paintings depicting the life of Confucius at Georgia State University’s Rialto Theater.