Georgia’s original Chinese investor, Sany America, celebrated a manufacturing milestone Sept. 18 with a high-level visit from the construction equipment giant’s billionaire co-founder and a top government official from its home province.
The visit came amid a growing trade war between China and the U.S. that has seen a ratcheting up of tit-for-tat tariffs. This week, the U.S. announced it would target $200 billion more in Chinese goods to be taxed at 10 percent, in addition to the $50 billion already hit with a 25 percent levy.
China responded Tuesday with its own 5 to 10 percent tariffs of $60 billion in U.S. products. On both sides, about half of imports are now covered by additional taxes.
Du Jiahao, Communist Party of China secretary for the Hunan government, made his way down to Peachtree City to mark the 2,000th excavator assembled at the facility with imported parts. The event featured towering vertical red banners with messages of thanks and support English and Chinese, as well as the unveiling of a massive machine on the factory floor, punctuated by pops of confetti.
Sany Heavy Industry Chairman Liang Wengen, whose net worth Forbes puts at $4.4 billion, also visited from Hunan for the celebration and plant tour. He and Mr. Du breakfasted with officials including Pat Wilson, commissioner of the Georgia Department of Economic Development, before meeting with Gov. Nathan Deal at the state Capitol.
Mr. Deal in 2011 visited Sany’s headquarters in Changsha, the capital of Hunan, reviewing row upon row of trucks, crawler cranes and excavators in a huge factory complex. The governor then announced a major Sany expansion in Georgia that never materialized. Mr. Du would become Hunan’s governor two years later.
In brief remarks to local officials, State Rep. Josh Bonner (R-Fayetteville) and Sany executives and dealers, Mr. Du urged the U.S. and Chinese governments to show restraint in a trade spat that has ensnared companies like Sany that are contributing to the U.S. economy, according to a report by the Atlanta Chinese Life news website and others present.
Sany’s CEO, Doug Friesen, didn’t respond to Global Atlanta inquiries by publication time, but he told China Daily USA last month that his company is collateral damage in a dispute the Trump administration says is focused on countering intellectual property theft, unfair trade practices and the Made in China 2025 plan, which seeks to upgrade the technology underpinning China’s industrial base.
Sany imports parts for excavators, its main product in this market, as it works to build up sales to justify its long-term vision of local manufacturing, and cranes and other lifting products were among the categories slapped with the 25 percent levy in the first tariff round.
“The tariff issue is surrounded by high-tech companies; we are not a high-tech company,” he is quoted as telling the Chinese newspaper during a reporter’s visit to the factory. “The tariffs are surrounded by intellectual property concerns, we are not an intellectual property concern. We don’t match those criteria, and we believe that we should be exempted from those kinds of tariffs.”
Sany has been targeted by U.S. companies with complaints of IP theft in the past, but it has also built a reputation of innovation which has netted the company many records and accolades.
Mr. Friesen also said in the China Daily interview that the decision to localize manufacturing the U.S. was made long before tariffs were at play. The company is the “poster-child for what the U.S. wants from foreign investment,” he said, noting that the factory staff could ramp up from around 70 now to more than 300 if it fulfills its vision.
Announced in 2007, Sany brought the state its first major manufacturing win from China. The project sputtered amid the global financial crisis and later struggled to select the right product from its vast portfolio. It eventually settled on making excavators to be sold by dealers throughout the U.S.
With Mr. Friesen in place for just over a year, the company has been expanding sales through a growing dealer network in the U.S. as the construction sector recovers.
Joan Young, president of the Fayette County Industrial Development Authority, said Mr. Friesen has been a “stabilizing force” after turnover at the executive level. She was wowed by the welcome Sany showed at last week’s celebration and heartened by its future plans.
“We are delighted. We’re always thrilled when a company works toward becoming successful enough to expand,” she said.
She added that she hasn’t heard much local fallout from the Trump tariffs.
“I think the only direct response we’ve had has been from Sany,” Ms. Young said.
A Georgia Department of Economic Development spokesperson said Sany’s success helps with attracting further Chinese investment:
“A company’s success is the ultimate testimonial when recruiting new business to Georgia. We know that our strong business ties with China put Georgia on the radar for many Chinese companies, but when a Chinese company is successful here it helps us to promote Georgia to other Chinese companies who are looking to relocate or expand.”
That seems to be paying off: Even as Chinese outbound investment has dropped drastically overall, the state seems to be winning more manufacturing projects than in the years immediately following Sany’s announcement.
A delegation of more than 30 people from Georgia used the occasion of Delta Air Lines Inc.’s launch of a nonstop flight to Shanghai in July to make yet another push for investment here.
Ambassador Li Qiangmin, China’s consul general in Houston, was among the dignitaries that made the trip in for the event.