70,000 jobs and more to come
More than 70,000 jobs have been created through Chinese investments in the US, and that number could reach 200,000 to 400,000 by 2020 if investment stays on track, according to the latest data, reports China Daily’s Cai Chunying from Washington.
Chinese investment in the US has increased rapidly since 2009 and reached a record high total deal value of $14 billion in 2013, according to Rhodium. The number of jobs created was only around 2,000 in 2000, slowly moved up to about 9,000 in 2007, but rapidly increased to approximately 27,000 in middle 2012 and rocketed to 70,000 by the end of 2013.
A couple of high-profile deals contributed significantly to the job rise, including the acquisition of AMC by Dalian Wanda in late 2012, A123 by Wanxiang in early 2013, and Smithfield by Shuanghui last September. Shuanghai has kept all the 37,000 or so positions Smithfield has. Rhodium’s data also show that many existing Chinese companies increased local hiring in 2013.
If investment from China remains on track, Chinese companies will employ 200,000 to 400,000 Americans by 2020, according to Rhodium.
Japan is a good example of the impact that investment from a newly emerged economy can have in the US. Prior to 1980, Japanese companies’ employment number in the US was almost negligible. Today, their US subsidiaries are sending paychecks to almost 700,000 Americans, nearly 12 percent of the total jobs supported by foreign direct investment in the US. uis Fiallo never thought he would be with a Chinese company for very long.
As managing director of business development at China Telecom Americas, the US subsidiary of a leading telecom carrier in China, Fiallo has been with the company for almost 10 years.
“I thought I would just stay for a couple of years and move on,” said Fiallo, who was born in Ecuador and grew up in Washington. “But I really like the environment, my colleagues, and the opportunities the company has presented to me, so I stayed.”
“In fact, I’ve never worked for a company for that long,’’ he added.
Fiallo is among the nearly 120 employees the Virginia-based company has, of which about 70 percent are, like Fiallo, local hires.
“When I joined the company, China just started to catch up, so there are a lot of necessities for leadership and experience. I feel what I do has immediate impact so I really enjoy it,” said Fiallo who is mainly responsible for developing the Latin America market for the company.
Fiallo’s job is also among more than 70,000 that Chinese investment in the United State has created so far, according to recently released data by Rhodium Group, a New York-based research firm that tracks foreign direct investment from China in the United States. that. Companies coming as greenfield projects include new factories, distribution centers, and R&D divisions — all that create most new jobs.
Wanxiang, a leading private Chinese company specializing in producing auto parts, entered the US market in 1994 and has expanded into a diversified business employing more than 6,000 people.
COSCO Americas, the Secaucus, New Jersey- based US subsidiary of China Ocean Shipping (Group) Co, started its venture in the US in 1982 managing a single container vessel per month. Now it employs nearly 600 people with more than 90 percent of them local hires, including union workers.
Haier, the home-appliance giant in China, established its first manufacturing facility in South Carolina in 1999. Today it employs about 470 people. Hisense, Haier’s competitor in China, set foot on US soil in 2001 and now its Georgia-based North American headquarters has about 100 people with 80 more to be added this year. Hisense’s Atlanta neighbor, Sany America, the US subsidiary of the largest construction equipment company, started its 400,000 square-foot new facility in 2006 and it now houses about 100 employees. Companies rescued
Mergers and acquisitions by Chinese companies have also contributed to job creation in the US by maintaining — and in some cases increasing — original staff base. Many American companies have been rescued from bankruptcy, saving hundreds of jobs that were about to be lost.
According to a study conducted by the Rhodium Group in 2012 on more than 170 M & A cases, Chinese buyers maintained and in many cases increased staff after acquiring a US business. There is no evidence of the asset-stripping behavior that many had feared.
The study also points out that those few acquisitions that have resulted in job losses have generally been due to structural adjustment and reorganization of value chains to react to changes in costs or demand, which is a common practice in the industry.
To many Chinese companies, local talent is a gold mine that they need to take advantage of to survive and excel in the highly competitive US market.
According to a survey of 50 top executives in Chinese companies in the US, conducted by APCO Worldwide and China Daily USA in 2012, the top advice these executives said they would give to Chinese companies looking to come to the US is to “hire or work with local experts and staff.”
Joe Han, CEO of China Telecom Americas, did exactly that for his company. Employees in his sales team are all locally hired Americans, a tradition he started as vice-president of marketing and sales before becoming CEO in 2013.
“They are all sales veterans working for other companies before, so they know how to operate in the US market and their own cultural environment,” Han told China Daily. Cultural differences
For UCWeb, China’s most popular mobile-browser maker, the biggest challenge to succeed in the US is to bridge the cultural differences between the two countries. Yu Yongfu, CEO of UCWeb, hopes that hiring local talent can help solve that.
Yu uses colors as an example. He says the color red represents alarm and trouble in the US but happiness and fortune in China.
“That’s why our product development operation in the US needs to hire more locals,” Yu told China Daily, “they know the taste of their fellow Americans.” UCWeb opened an office in Sunnyvale, in California’s Silicon Valley in 2012 and has an aggressive plan to expand.
Wang Xin, CEO of Sinomedia International, a Chinese media enterprise geared toward providing high-quality crosscultural publications, spares no effort to localize Sinomedia’s operation by hiring locals to develop its business, from topic selection, research and editing to marketing and sales.
“Let the locals choose topics the locals will have interest in reading; and let the locals sell books in the US using methods appealing to the locals,” Wang said. “We benefit a lot (by doing so).”
Lawrence Li, CEO of Hisense USA, also shares this judgment. Li said he recently hired a senior manager in human resources and has seen significant improvement in personnel management since then.
“We have installed new rules and improved our communication mechanism. I believe we operate more efficiently and effectively now,” said Li, who became CEO in 2007.
Some Chinese companies are even more aggressive, hiring Americans to lead their US subsidiaries.
Sany America is one of them. The company hired Tim Frank, a senior executive from Caterpillar, to serve as its chairman in 2012.Working together with Jack Tang, the company’s then president, Sany America reported its first profit in October 2012 and has since then kept its profit edge.
Sany American recruited new CEO Mike Rhoda in December last year after Frank departed for “personal reasons”, as cited by Tang. Rhoda was president of Volvo’s excavator business line before joining Sany.
“I have been following Sany for several years while working for other competitors and I’ve been impressed with their ambition and aspirations,” Rhoda told China Daily.
Rhoda said he has worked for other Asian companies before and therefore reached a level of understanding of some of the cultural differences that Chinese and Asian companies run into when operating in the West. For many Americans, working for a Chinese company is a new experience.
Kirk Erlinger, director of sales and dealer development at Sany America, said that he still has difficulties in understanding some of his Chinese colleagues’ English.
“I tend to speak very fast and I often have to slow down and explain patiently so they can understand me,” said Erlinger, who joined Sany America in 2011 after working for crane dealers for more than 20 years.
Erlinger also wishes the decisionmaking process can go faster. He noticed that some of his Chinese colleagues are hesitate to voice their opinion in a group meeting probably due to the cultural difference between the two countries.
He also noticed that it often takes longer than he likes to have some plans implemented because the US subsidiary needs to communicate back and forth with its Chinabased headquarters and achieve consensus.
Erlinger, however, said he enjoys the trust he has built with his boss, Jack Tang, president of Sany America. “I can just come in and share my thoughts with him without any hesitation,” said Erlinger, who oversees five salesmen, all locally hired Americans.
Jonathan Frank, vice-president of marketing at Hisense USA, however, said one thing that he likes in working for Hisense is its speed to act quickly when needed.
“Decision-making is a lot longer process with more layers in an American company. It is refreshing to see within Hisense that when a decision needs to be made, it can be made relatively quickly with fewer layers,” said Frank who joined Hisense USA in March last year after working for Voxx International and Panasonic.
Frank said he also likes the multicultural atmosphere in Hisense:
“You always have a different dynamics when you got multicultural employees and I like that. I think it should be our strength and it is better for employees because they learn from each other and each other’s culture and it makes everyone better.” ‘Always learning’
Fiallo, China Telecom Americas’ veteran manager, also enjoys the learning process.
“I feel I am always learning new things. My Chinese colleagues always say that they learned new things from me, but I am the one who is learning from them. We have to learn how to collaborate and how to work together,” he said.
Managing a workforce that does not share their own culture can bring challenges to Chinese CEOs. Many, however, said they find it easier than they thought.
Lawrence Li, Frank’s boss, said he was surprised to find that his American colleagues are able to adapt to his company’s needs of getting up early in the morning or stay into late evenings to have a realtime conference with the company’s Chinese headquarters, which has a 13 -hour difference from the US.
“I thought they would complain. But each one of them show up on time,” said Li.
He said communication plays a crucial rule to bring the employees from China and local hires together. “We’ve had multiple channels of communications. We need to make sure that concerns are heard and ideas are thoroughly exchanged,” said Li.
Tang, former president of Sany America, who has now moved to lead Sany’s wind-energy investment in the US, said in an earlier interview, “We need to learn how to work together with local hires. Coming from different culture and business background, the key is communication and build the trust.”
The trust, in Frank’s eye, is there. The vice-president of Hisense USA said, “We always say that we are like a start-up company with a big backing company. Everyone works here really takes the company’s interest at heart and we all share the same goal.” Contact the writer at firstname.lastname@example.org
Sany America, the US subsidiary one of the world’s largest construction-equipment companies, has about 100 employees at its 400,000 square-foot facility in Georgia.
Liu Hanbo (right), president of Cosco Americas, chats with his American and Chinese colleagues at the company’s headquarters in Secaucus, New Jersey.