After decades of siphoning jobs from the United States, China is creating some. And at least one of those investments is paying off for the Dayton area in a major way.
Last month, Chinese auto glass manufacturer Fuyao bought 1.2 million square feet of a former General Motors plant in Moraine for $15 million, with plans to transform the plant into one of the country’s biggest sites for the finishing of automotive glass, with an expected eventual 800 workers.
Fuyao will take raw glass and heat, shape and fit the glass in Moraine for use in automobiles.
In all, Fuyao is expected to invest some $250 million into the plant, perhaps making it company’s biggest plant, Fuyao Chairman Cao Dewang said in May.
But it’s not just Moraine. Chinese investment in the United States overall is growing. According to New York consultant Rhodium Group, which watches Chinese investments, 2013 was a “milestone” year for employment by Chinese firms in this country.
Chinese-owned companies provided more than 70,000 full-time jobs in the United States by the end of 2013, a more than eight-fold increase compared to 2007 (around 9,000 jobs), Rhodium said.
In 2013, the average size of Chinese-driven projects rose, raising total deal value to a record $14 billion, double the amount of the year before, according to Rhodium.
In South Carolina, Chinese textile manufacturer Keer Group is investing $218 million in a plant to make industrial yarn, the Associated Press reported. That company is expected to employ 500 people.
In Texas, Tianjin Pipe is investing more than $1 billion in a factory that makes pipes for the oil and gas industry. That company is expected to have 400 to 500 employees by the end of 2017.
And Rhodium analyst Thilo Hanemann noted that Shandong Tranlin Paper Co Ltd recently said it will invest $2 billion in a paper and fertilizer plant in Virginia, a project expected to be China’s largest greenfield project in the U.S.
“We have a strong pipeline of deals and new investments are announced on an almost daily basis,” Hanemann said in an interview.
Chinese investment in America has set records two years in row, said Derek Scissors, resident scholar for the American Enterprise Institute. He expects another record this year.
‘It’s good for the Dayton area’
“This is good for the United States, it’s good for the Dayton area, it’s good for Ohio, it’s good for the whole country for these transactions to take place,” Scissors said. “They’re all voluntary. That’s the way we do things here. Money is coming to the country, saving jobs or creating jobs.”
Bill Wilson, international economist for the Heritage Foundation and former chief economic with Ernst & Young, expects Chinese-driven investments in the U.S. to get “a lot bigger.”
“China is becoming increasingly integrated into the global economy,” Wilson said. “What they’re trying to do is move away from this export-driven model — which they have had for 30 years —and develop deeper investments and capital relationships with the global economy.”
The old Chinese economic model, the export-driven model, has “expired,” he said.
But it’s not just a process of global integration. China is going aboard to acquire strategic assets, such as energy and production assets and information technology expertise, Wilson said.
“They want to own their own energy supplies,” he said.
There are some parallels to Japan’s investments in the U.S., particularly the establishment of motorcycle- and auto-maker Honda in Ohio in the 1970s, he agreed. Honda in Ohio today has more than 13,000 employees.
But what China needs most is American know-how, he believes.
“What the Chinese really need, that the Japanese didn’t need as much, is really access to experience and really talented staff,” Wilson said. “The Chinese really lack that.”
Tapping American knowledge
State-operated enterprises in China can be risk-averse and lacking in “best practices,” said Wilson, who lived in China for three years. Tapping into American knowledge can help Chinese firms.
By comparison to China, the U.S. is becoming more competitive. Worker costs in China have gone up double digits for seven or eight years now, Wilson said.
“That’s another impetus (for China) to move off-shore,” he said.
The hunger for American workers is felt in Moraine. Mike Davis, Moraine development director, said this week that Fuyao is about two weeks away from establishing a human resources department for the Moraine plant.
Davis has been informally taking the names and contact information of people interested applying for jobs at the plant. But he stressed that he does not have any official human resources role with Fuyao.
“I can put you down in a database with your name and your email address and I can let Fuyao know that,” Davis said. “I will be providing them that spreadsheet of contacts so they know where they can start going.”
Moraine officials has also encouraged Fuyao to have a local jobs fair at some point. No fair has been scheduled yet.
Post resumes online
Kristi Tanner, a managing director for JobsOhio, the state’s private development arm, said people who feel they are candidates for management or engineering positions at Fuyao’s Moraine plant should place their resume on OhioMeansJobs.com.
“If their resume is posted on OhioMeansJobs, it will be reviewed for the Fuyao operation,” Tanner said. “They’ll be using that among other tools for recruiting of their workforce.”
OhioMeansJobs.com is a website gathering point for individuals searching for jobs and employers looking for qualified candidates.
Fuyao is looking for qualified management people now and should begin hiring later this year and into next year, Tanner said. Fuyao will need maintenance employees, forklift operators, “a multitude of different positions,” she said.
Production at the plant between Ohio 741 and Kettering Boulevard could begin this time next year if not sooner, officials say.
While Chinese investments are welcome, Scissors believes Americans should carefully consider each proposed deal.
“When it gets tricky is when you start asking, ‘Well, is China a good economic actor overall?’” Scissors said. “That’s a different story. A lot of people say, ‘No.’ And they have some reason.”
The U.S. needs to consider its own access to China’s market as well as attempts to steal U.S. corporate secrets through cyber espionage, Scissors said. Last month, the U.S. government indicted five Chinese military officials for cyber-spying.
The Associated Press contributed to this report.