Even as China–U.S. tensions run high, deeper economic connections continue to drive Chinese investment in Georgia.
Those Chinese investors are looking for advisors who share their language and culture, according to Wendy Lu, leader of Aprio LLP’s Chinese practice that advises on inbound and outbound tax considerations for businesses.
Ms. Lu’s clients are largely Chinese companies setting up operations in the United States. The practice spends time with clients to educate them on U.S. laws and regulations, help them with compliance and assist them in obtaining available incentives and credits for which they are eligible. Aprio’s advisors set up tax-efficient structures, find property tax exemptions and provide services such as transfer pricing and customs and duty assistance.
The key difference from other tax advisory firms, Ms. Lu asserts, is Aprio’s focus on culture.
“Aprio’s Chinese team is unique because our Chinese clients are unique. We use the same language to communicate, we share the same cultural background with clients, and we have a passion for serving our clients,” Ms. Lu said. “We can put ourselves into clients’ shoes easily because we come from the same place. We build a strong relationship with our clients, so they treat us as their long-term advisors not just tax service providers.”
Those relationships go a long way in an investment environment that may be politically sensitive.
Wendy Lu outlines how companies are creatively overcoming the narrative of decoupling in the U.S.-China relationship and why China is still a vital trade partner for Georgia. Film credit: Steven Toutoute, Aprio LLP
Georgia’s state legislature, like those of other states, is considering moves to restrict Chinese land ownership and other economic involvement. Yet Georgia remains at the top of the list for Chinese investment in the U.S., Ms. Lu said.
The so-called “decoupling” of U.S. and Chinese business is not as much a split between Chinese and U.S. businesses as it is a more cautious business strategy, she said. “Georgia is still open to Chinese projects and proposals, but it is now more selectively looking at these projects,” Ms. Lu observed.
Georgia has built a mature supply chain and offers relatively low operating costs and salaries, which appeals to Chinese companies. The investment of large global brands in Georgia also serves to attract Chinese suppliers and vendors, she noted.
Compared with other states, Georgia has done well in attracting Chinese investment. Manufacturing, technology, engineering service, real estate and bioscience sectors have received the most interest from her clients.
But Chinese companies still consider all U.S. states for investment and welcome all proposals, she said, noting that they are looking more at logistics, operational costs, supply chain, talent resources and incentives than the political milieu.
The Inflation Reduction Act put strict limitations on Chinese companies, but Chinese companies continue to seek advice from Aprio for investing in the U.S., especially in Southeastern states like Alabama, North and South Carolina and Texas, she added. In fact, 60 percent of Ms. Lu’s Chinese practice clients are Chinese companies looking to invest in the U.S.
Though her practice has seen a recent decline in U.S. clients seeking tax advice for their operations in China, these U.S. companies still represent 30 percent of her client base. U.S. investment in China is still vital for both economies, she asserted.
“Like the old saying goes, when one door closes, another one opens,” Ms. Lu quipped, noting that Georgia’s relatively low-cost real estate, lack of unions, talent availability, location and logistics infrastructure make it popular among Chinese investors. Some of them are even using their U.S. operations as a springboard to expand to other locations in North America and Latin America.
In all of these activities, Chinese clients appreciate Aprio’s in-market service and the practice’s ability to relate on a cultural level, Ms. Lu said. She added that language and cultural background are probably the two most important characteristics Chinese clients look for in a certified public accountant. Language is not just the language itself; it represents cultures and similarities in thinking processes and social backgrounds, she asserted, noting that she and her colleagues often share the same humor and use the same idioms as their clients.
“We can understand why Chinese clients have a certain thought or how they would react to something because we come from the same place. Many times, we don’t have to ask; we know what the clients would think, and no language is needed. This way, we service our clients much more effectively and efficiently.”
