Georgia Rolls Out Red Carpet for Chinese Companies

BEIJING — How do you convince Chinese executives to invest in Georgia?

Low costs, an educated work force and direct flights – as well as "Gone with the Wind," Martin Luther King, Coca-Cola and Jimmy Carter – are among incentives state officials highlighted at a conference in Beijing last weekend.

The sales pitch was part of a burgeoning state effort to bolster trade ties with the world's fastest-growing large economy.

As China's economy has surged over recent years, Chinese companies have begun to invest overseas. According to the latest available U.S. government data, Chinese investment in the United States rose to $554 million in 2006 from $385 million in 2002.

Some of that money has made its way to Georgia. Several Chinese companies have signed contracts to build factories in the state in recent years, including a commitment last September by Sany Heavy Industry Company, a Chinese producer of construction equipment, to build a factory in Peachtree City that will create 200 jobs.

"China is the world's third-largest economy and it's critical for us to establish a diverse and deep relationship with them," Kenneth Stewart, commissioner of the state's Department of Economic Development, said at the Beijing conference, which was sponsored by the state and by Atlanta law firm Morris, Manning & Martin.

"Our goal is to sell Georgia," he said.

The state has unleashed a flurry of efforts to achieve that aim. The Department of Economic Development recently opened an office in Beijing to promote trade and investment, and Governor Sonny Perdue will make his first trip to China in April.

State officials are lobbying Washington and Beijing to locate a Chinese consulate in Atlanta. Chinese officials have said they would like to build a new consulate – which would handle visas and trade issues – but have not said where or when construction will begin.

Commissioner Stewart expressed confidence that the state will win the consulate. "We're very hopeful that with our growth and our size we'll have a (Chinese) consulate in Georgia soon," he said.

In Beijing, Georgia officials stressed the state's growing logistical links with China as reasons companies should invest.

Delta was awarded a coveted nonstop route between Atlanta and Shanghai, China's financial center, in September and will begin daily flights in March. Delta officials have said they will apply for additional routes to Beijing and other Chinese cities in coming years.

Shipping between ports in China and Georgia has grown as oil prices have risen, making road and rail transport more expensive. Last year, the amount of goods shipped between Shanghai and Georgia rose by more than 20 percent, said Charles You, a Shanghai-based representative for the Georgia Ports Authority.

Because Georgia has lost thousands of manufacturing jobs in recent years, state officials are particularly interested in attracting Chinese factories that would create hundreds or thousands of blue-collar jobs.

Several Chinese automakers have expressed interest in building cars in the United States.

Chery, China's fourth-largest car maker, is studying the U.S. market but hasn't made any specific investment plans, said Fen Ping, a director in the company's international sales division. Executives at Geely, China's eighth-largest car maker, have said they hope to enter the U.S. market sometime after 2010. On Monday, a Geely official who asked that her name not be printed said the company was considering investing in Georgia.

Stewart said Georgia is "in discussions with a number of Chinese companies ... in everything from trade and distribution to manufacturing."

But analysts in China said a major investment by a Chinese automaker in the United States is years away because labor costs are much higher in the United States.

At the conference, interest in Georgia was mostly among smaller Chinese firms.

Su Xiaodong, the CEO of Tianbo, a Chinese company that manufactures hospital equipment, said he hopes to visit Georgia in August to discuss setting up a $500,000 facility.

"People trust the quality of American-made goods, so we want to have a factory in Georgia," he said.

Commissioner Stewart said "on average" two Chinese business delegations visit Georgia each month to look at investment opportunities.

The state provided a small amount of funding for the Beijing conference because it "gets us in front of a very large number of major Chinese companies," he said.

To win Chinese businesses, state officials also held out the carrot of financial incentives, including tax breaks, cheap land and help training workers.

"It is important to us that we make doing business in Georgia as inexpensive as possible for your company," Gretchen Corbin, director of international operations for the Department of Economic Development, told the conference.

A recent state study found that Georgia "was very competitive with other states" in taxes, business costs and "the total package of incentives that offered to companies," Stewart said.

For many Chinese delegates, the message that Georgia could help with the bottom line carried significant weight.

"Georgia is very friendly," CEO Su said. "I think they'll give us a good deal on land and taxes."