In many ways, 2018 is starting to look a lot like 2008 for Georgia’s outreach to China.
While there is less clamoring for a Chinese consulate in Atlanta — many now feel that this ship has sailed — the similarities on the surface are easy to see: The state is coming off a major announcement of a Chinese manufacturing investment — Sentury Tire in 2018 versus Sany America in 2008 — and Delta Air Lines Inc. is planning to begin nonstop air service Shanghai on July 20.
Why the comparison may not be the best thing: The heady days of 2008 didn’t bring the promised wave of Chinese investment to Georgia, and Delta’s Shanghai flight didn’t last long at all. It was discontinued once after less than a year, brought back briefly, then canceled again.
After a decade, who’s to say the state won’t experience a painful deja vu of missed opportunity as it courts investment from the world’s second largest economy?
For starters? Delta.
“The conditions today are a lot different,” said Chris Jones, the airline’s director of international specialty sales, at a recent Chinese New Year business forum organized by the Confucius Institute at Georgia State University March 2.
Not only is the airline in a much healthier financial position overall — it posted $3.6 billion in net profit for 2017, versus being fresh out of bankruptcy in 2007 — but the global economy also doesn’t seem poised for a massive recession like the one that hit in 2008.
And Delta has something it didn’t have before: An on-the-ground partner in China Eastern Airlines, in which Delta invested $450 million for a 3.55 percent stake in 2015.
Over the last few years, the carriers have better integrated their operations at Shanghai’s Pudong International Airport. That could lead to more convenient connections for Delta customers seeking one-stop travel to other Chinese cities.
“We’re collaborating and coordinating with them extremely well. We have great connections to Chengdu out of Shanghai that we’d love for you to experience, but also to Guangzhou, Kunming and other markets. I think there’s 80 online markets outside of Shanghai that our flight will connect to,” Mr. Jones said during the event, which was titled “New Routes, New Directions” and held in conjunction with the Association of Chinese Professionals and the World Trade Center Atlanta.
More Chinese Investment
Delta, meanwhile, will be pulling from a larger pool of potential customers heading to China. The U.S. is host to more than 350,000 Chinese university students, and Atlanta schools like Emory, Georgia Tech and Georgia State University have attracted more than 6,000. Atlanta also played host to a major Chinese tourism conference in 2017, showing growing interest from the mainland.
While Georgia has lagged its neighbors in some ways, the South overall has now drawn substantially more investment from China, especially on the manufacturing front, and companies have been asking for an easier link back home.
“We’re going to be relying not only on the local traffic but all of the traffic and companies from all over the Southeast. There is just a tremendous amount of pent-up demand,” Mr. Jones said.
As an example, Jushi USA, a provider of fiberglass reinforcements for the plastics industry is building a $300 million plant in Columbia, S.C., that will create 400 jobs.
The state-owned Chinese company has a headquarters and sales operation in California but picked South Carolina for a factory that will supply the NAFTA region. That starts with the American market, where sales are growing at a more than double-digit pace annually.
“Right now the business is on fire,” William Woo, the U.S. CEO for Jushi, said at event, which was held at the City Club of Buckhead in Atlanta. “We see a lot of opportunity in the days and months and years to come.”
John Ling, Georgia’s top Chinese investment recruiter, joked while moderating the panel discussion that he would give Mr. Woo easy questions in hopes of staying in his good graces.
“We still want your future projects in Georgia,” said Mr. Ling, who helped recruit Jushi to South Carolina before he came on board for Georgia.
Hisense USA, the electronics and appliance manufacturer, is also ramping up its U.S. presence and could soon run out of space at the Suwanee, Ga., office where it employs about 120 people — 50 of them in research and development, Mark Viken, vice president of marketing, said during the panel. Learn more about Hisense in Atlanta
While it has traditionally focused more on technology, Hisense is giving greater care to its brand. It’s now a billion-dollar company just in the U.S. market, which is small compared to its $16 billion in overall revenues, mostly coming from China.
“Now it’s the time to really expand the international operations,” Mr. Viken said.
Mary Waters, deputy commissioner for international trade at the Georgia Department of Economic Development, said in her keynote remarks that Chinese companies like Hisense operate more than 60 facilities and employ 1,500 people across the state.
Georgia companies are also selling more into China, enabled in part by the state’s offices promoting investment and exports in the cities of Qingdao and Shanghai, respectively. Over the 10 years since Georgia has had Chinese representation, exports have grown 77 percent, she said.
According to recent trade numbers, China remains by far the state’s largest trading partner, with $25 billion in bilateral trade. Most of that ($22.2 billion) comes from imports, but exports to China were up 10 percent to $2.8 billion after falling in each of the last two years.