When courting Chinese investment, it pays to be patient, flexible and culturally sensitive.
That’s what economic developers involved in attracting three multi-million dollar Chinese investments to Georgia have learned over the past two years.
The Chinese economy is largely export-based, but it’s slowly transitioning to a focus on greater domestic consumption and increasingly, overseas investment.
Since 2006, Chinese companies have announced three manufacturing projects in Georgia that will comprise an estimated $75 million in investment when completed.
Economic development officials who helped plan and negotiate those deals will share insights on working with Chinese companies during a panel discussion at the World Trade Center Atlanta on Nov. 12 at 4:30 p.m.
Because Chinese outbound investment is a relatively new phenomenon, there’s much to be learned both for the Chinese investors and the governments and businesses on the receiving end, said Bill Harrison, president of the Coweta County Development Authority and one of three panelists to speak at the event.
Mr. Harrison represented his county, which borders Fulton County to the south and includes the city of Newnan, in a deal that landed the first-ever Chinese manufacturing operation in the state.
The joint venture between New Jersey food packaging company W.Y. Industries Inc. and Ningbo, China-based brewing and fermentation company Lehui Enterprises created Kingwasong LLC, which has settled into a 225,000-square-foot retrofitted building in Coweta County.
From the first time an anonymous caller with broken English inquired about a vacant industrial site, Mr. Harrison said cultural sensitivity and patience have been key.
As negotiations began, he realized that Chinese businesspeople had a different understanding about how business and government interact in the U.S. They also didn’t realize the need to hire top-notch professionals for business services at the outset, he said.
Then, when the deal was ready to be signed, the Chinese officials had trouble getting visas.
“That is a huge continuing and ongoing problem for all of us dealing with our Chinese friends: getting enough people here at the right time and in a timely fashion. It is a very difficult process,” he told GlobalAtlanta.
The language barrier often presented problems as well, even with translators.
“What is meant doesn’t get translated; just what’s said,” he said.
The Coweta authority’s need to be culturally accommodating was not without precedent. It has been home to Japanese companies for three decades and has been heavily involved in the negotiations for South Korea-based Kia Motors’ $1.2 billion investment in West Point.
After seeing how the Japanese and Korean companies accommodate English speakers, Mr. Harrison had the authority’s Web site translated into Chinese, Japanese and Korean.
“If they go to this effort to make sure we can read and understand what they’re writing, why shouldn’t we return the favor?” he said.
If Coweta County was the “guinea pig,” as Mr. Harrison said, it wouldn’t be long before another Georgia community was tested on its readiness to handle Chinese investment.
General Protecht Inc. announced in May 2007 that it would invest $30 million to build an electrical components plant in Barnesville, between Macon and Atlanta.
Missy Kendrick, executive director of the Barnesville-Lamar County Industrial Development Authority, said the state and the Metro Atlanta Chamber of Commerce set up the initial meetings, which ran smoothly.
But General Protecht officials had an interesting way of selecting a site for their facility, Ms. Kendrick said.
“The site that they chose, I think they chose it because of feng shui, because the land rises to the back and there’s water on the property, and all of these things are from what I understand important to the Chinese culture,” she said.
Feng shui, which literally translates to “wind, water,” is a traditional Chinese practice that often includes arranging objects or manipulating an environment to create the most favorable flow of energy and ensure that a place is in harmony with the universe.
Ms. Kendrick, who will also speak at the Nov. 12 event, said that incoming companies and economic developers in Georgia would do well to create more mutual awareness about what’s required of a Chinese company investing here and how to deal sensitively with business and cultural issues.
“We’ve all been on a learning curve,” she told GlobalAtlanta.
Matt Forshee, president and CEO of the Fayette County Development Authority, echoed that sentiment.
Though it has had investment from many foreign companies because of its proximity to the airport and other features, the Peachtree City area hadn’t seen any Chinese business until Sany Heavy Industry Co. Ltd. committed last September to building a $30 million construction equipment plant there.
Sany officials like Peachtree City because it’s a planned community like many of China’s “masterplan” cities, which seem to rise from the ground overnight, Mr. Forshee said.
After the company bought a 320-acre tract of land, Fayette County officials had to sift through some building requests that produced some unorthodox zoning issues, he said.
“In their facilities in China, they actually have on-property residential housing for some of their workforce and executives. They have almost like a mixed-use facility on property,” which is not the way it usually works in the U.S., he said.
Sany’s leaders wanted 20 residential buildings on the same property as their office facility, located in an industrial park.
With the help of Fayette County officials, they eventually got nine: six individual housing units and three condominiums. In addition to its manufacturing plant, Sany will have a design facility that will employ 60-80 engineers when fully staffed.
Mr. Harrison and Mr. Forshee have both traveled to China to facilitate deals or to maintain relationships. Ms. Kendrick has been invited by General Protecht and plans to go soon.
To sign up for the Georgia China Alliance event where these economic developers will share experiences, click here.