U.S. States, Cities Courting Chinese Firms

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Today, the state of South Carolina opened a new trade office more than 7,000 miles away from the State House; it's in Shanghai. Trade with China has been a sore subject in Southern states. Competition from Asian imports has devastated the region's textile and furniture industries. As NPR's Adam Hochberg reports, some states are now working with the Chinese to create new jobs in this country.

ADAM HOCHBERG reporting:

Over the past decade, South Carolina has lost more than 16,000 jobs to China. But at this factory in the small town of Camden, it's gotten some of them back.

(Soundbite of factory work)

HOCHBERG: In this five-year-old plant, about 200 South Carolinians make refrigerators. They work for a company called Haier, spelled H-A-I-E-R, a Chinese firm that used to be controlled by the Communist government but now has capitalist ambitions. Its products, once unknown outside Asia, now are sold in American stores like Home Depot. And the head of this plant, David Parks, wants to make Haier a household name in the US.

Mr. DAVID PARKS (Haier): American markets are the most mature and the most difficult. And to be a global participant, you have to be here. That's why we are here. That's why we're investing in a factory. We want to build products in America, by Americans, for the American market.

HOCHBERG: Even in this American plant with American managers, you can see the influence of the Far East. On the walls are posters with soothing scenes and Chinese motivational sayings. Some carry awkward English translations like `Only products for practical uses can be favored by customers.' Parks spent 15 years working for American appliance makers and calls Haier a different kind of company.

Mr. PARKS: The Americans tend to live quarter by quarter, and there's almost an attitude like if you don't make the quarter, don't worry about next year because you won't be here. Asians are much more long term in their thinking. And if you take the long view of things, you're far better off.

HOCHBERG: Haier has left little doubt its long view calls for aggressive growth. It failed in a recent bid to take over Maytag, but still plans to build at least four more American factories. Other Chinese manufacturers are opening US plants, as well, making things like automotive components and electronics, all part of a strategy to transform China into a global economic leader. University of South Carolina business Professor Chuck Kwok says China wants to be known for something more than low wages and cheap consumer goods; it wants to tap into America's strength in research and development.

Professor CHUCK KWOK (University of South Carolina): If you are not very strong in R&D, there's no way you can dominate in the key industries like high tech, like cars, that kind of thing. You don't just have that base. And that's why China's companies now are learning how to go outside to America.

HOCHBERG: So far companies from mainland China have created only a couple thousand jobs in the US, far fewer than the number of American jobs lost to Asia. But Professor Kwok predicts Chinese investments here will grow and governors around the country are working hard to attract them.

Governor MARK SANFORD (Republican, South Carolina): China is the giant elephant in the room as it relates to economic development.

HOCHBERG: South Carolina Governor Mark Sanford has made two trade missions to China and personally cut the ribbon at the state's Shanghai office. To Chinese executives, he talks up South Carolina's ready work force and its low business costs, and he says locating Chinese factories in the state could pay political dividends.

Gov. SANFORD: For instance, in South Carolina, there's a very strong sentiment against China trade. And if we stay with the political dynamic as it exists now, trade sanctions will go up. And you need to go to the epicenter of where jobs are lost and replace some of those jobs if you have any hope of changing the current political dynamic.

HOCHBERG: South Carolina gave Haier more than a quarter-million dollars in incentives and even named a street near the factory Haier Boulevard.

But not all Chinese firms receive such a warm welcome. This summer, China's government-owned oil company dropped efforts to buy Unocal after some members of Congress raised national security concerns. And other critics worry luring Chinese factories to the US might hurt America in the long run. Robert Scott is with the Economic Policy Institute, a union-backed think tank.

Mr. ROBERT SCOTT (Economic Policy Institute): Mayors and governors around the country have an obvious desire to create jobs for their communities, but the problem is they're missing the forest for the trees. The problem is that what comes out in the end of those factories displaces US products, they employ many more workers, so we lose jobs.

(Soundbite of factory work)

HOCHBERG: Back in South Carolina, workers at the Haier factory raise few concerns about having a Chinese employer. For the most part, they're just happy to work in this clean plant and earn a salary that at more than $10 an hour is generous in this part of the state.

Mr. THOMAS DAVIS(ph) (Haier Employee): In my honest opinion, it's the best job that I've had since I've been working, and I've been working since I was about 18.

HOCHBERG: Forty-two-year-old Thomas Davis, who used to work at a textile mill, now operates a machine at Haier that makes refrigerator lighters.

Mr. DAVIS: I didn't even think the Chinese would actually come over here and develop a company, but I'm glad they did. I mean, my thing is, you know, I let China and the US settle their differences, and I just come here to perform my duties and go home.

HOCHBERG: Davis says the only struggle at this plant came when it first opened and Haier sent managers from China to train the workers. That led to language and cultural problems so severe some employees quit in frustration. Now with all-American management, things are running more smoothly and morale is high. The company says it's received thousands of applications from South Carolinians who want to work here. Adam Hochberg, NPR News.

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