Louisiana vies to at­tract Chi­nese in­vest­ment

Among the ef­fects on Louisiana of Hur­ri­cane Ka­t­rina 10 years ago was the state drop­ping its laid-back ap­proach to at­tract­ing out­side busi­ness. Now it’s ag­gres­sively seek­ing in­vest­ments, es­pe­cially from China re­ports May Zhou in New Or­leans.

China Daily (Canada) - - DEPTH -

in­vest­ment made by Yuhuang Chem­i­cal, the foot­prints of Chi­nese in­vest­ment in Louisiana are rel­a­tively small com­pared with the neigh­bor­ing state of Texas. On LED’s web­site, the num­ber of com­pa­nies in­vest­ing in the state is only six.

This makes the Yuhuang project very sig­nif­i­cant for the state be­yond be­ing the largest Chi­nese FDI project in the Gulf Coast be­cause it helps to raise the aware­ness of Louisiana in China.

“Go­ing back to about 2010, we didn’t see tremen­dous Chi­nese in­vest­ment com­ing to the Gulf Coast. To­day there is a tremen­dous shift, es­pe­cially in the petro­chem­i­cal and chem­i­cal re­fin­ing in­dus­try,’’ said Adam Knapp, pres­i­dent and CEO of the Ba­ton Rouge Area. “Yuhuang has come, and many oth­ers have started to ex­press in­ter­est. From my own per­spec­tive, far more than what we an­tic­i­pated.”

Louisiana’s eco­nomic con­nec­tion to China can be seen be­yond direct in­vest­ment. For ex­am­ple, a size­able or­der of the Bell 505 Jet Ranger X comes from China at the newly es­tab­lished Bell He­li­copter as­sem­bly plant in Lafayette, Louisiana.

Chi­nese cus­tomers

Ac­cord­ing to Texas-based Bell He­li­copter, of more than 350 let­ters of in­tent for the new 505 model, 79 were from cus­tomers in China.

“Bell He­li­copter con­tin­ues to see a lot of po­ten­tial in the he­li­copter mar­ket in China. The in­stalled fleet of civil he­li­copters in China has more than dou­bled in the past five years from 300 to more than 650, and we ex­pect that trend to con­tinue,” said Chris Jaran, vi­cepres­i­dent for Bell He­li­copter in China.

In Ba­ton Rouge, Eu­gene Ji, a Chi­nese Amer­i­can orig­i­nally from south­west China, has been bro­ker­ing busi­ness be­tween the US and China. He op­er­ates two golf cour­ses un­der G2 Golf Club in Shreve­port, offering golf camps and ses­sions to wealthy Chi­nese. “This pro­vides a net­work­ing op­por­tu­nity for Chi­nese and Amer­i­can busi­ness peo­ple,” said Ji.

Ear­lier this year, Ji’s film com­pany, 1885 Me­dia, formed a part­ner­ship with the Beijing Film Acad­emy and Hu­nan TV to take ad­van­tage of Louisiana’s mo­tion pic­ture in­vestor tax credit, which pro­vides up to a 30 per­cent trans­fer­able tax credit on el­i­gi­ble in-state ex­pen­di­tures. This has led to a boom­ing film­ing in­dus­try in Louisiana over the last decade and earned it the rep­u­ta­tion of “Hol­ly­wood South”.

Ji said 1885 Me­dia and the Beijing Film Acad­emy es­tab­lished a film train­ing cen­ter in Ba­ton Rouge this year. 1885 Me­dia also will shoot TV pro­grams with Hu­nan TV, known for pro­duc­ing pop­u­lar pro­grams in China.

Ji is also in­volved in an up­com­ing liq­ue­fied nat­u­ral gas (LNG) project. Ba­ton Rouge-based G2 LNG LLC an­nounced in Oc­to­ber 2015 that it plans to con­struct an $11 bil­lion LNG fa­cil­ity on the ship chan­nel in Cameron Parish. It would be one of the largest cap­i­tal in­vest­ments in Louisiana’s history, ac­cord­ing to the com­pany’s an­nounce­ment.

Ac­cord­ing to Ji, the ex­ec­u­tive vice-pres­i­dent of G2 LNG LLC, there is some Chi­nese in­vest­ment in­volved in the project, but he de­clined to pro­vide de­tails. The com­pany, chaired by for­mer Louisiana gov­er­nor Charles “Buddy” Roemer, was granted a li­cense to ex­port LNG to FTA (Free Trade Agree­ment) na­tions by the US En­ergy depart­ment in July 2015, and is ap­ply­ing for a li­cense to ex­port LNG to non-FTA coun­tries such as China.

Also in Ba­ton Rouge, Louisianan State Univer­sity (LSU) not only works with the FastS­tart pro­gram to train work­ers, but also has an emerg­ing mar­kets ini­tia­tive that evolved from a China ini­tia­tive started in 2007 by Dr. Ye-Sho Chen at the Ourso Col­lege of Busi­ness.

Ac­cord­ing to Chen, di­rec­tor of the emerg­ing mar­kets ini­tia­tive, the pro­gram is a col­lab­o­ra­tion of LSU, the Univer­sity of São Paulo (USP) in Brazil, the Cen­tral Univer­sity of Fi­nance and Eco­nomics in Beijing and other en­ti­ties in China.

Tai­lored curriculum

Chen, along with oth­ers in­clud­ing LSU pro­fes­sors Ed­ward Watson and Edgard Cor­nac­chione, had de­vel­oped a curriculum tai­lored for Chi­nese small- and medi­um­sized en­ter­prises (SMEs) go­ing abroad. Named Fly­ing High, Land­ing Soft, the curriculum en­ables US and Brazil­ian stu­dents to help Chi­nese SMEs ex­plore busi­ness op­por­tu­ni­ties and de­velop new global ven­tures.

In ad­di­tion, LSU’s In­no­va­tion Park is an in­cu­ba­tor for en­trepreneur­ship. Its soft-land­ing pro­gram specif­i­cally helps in­ter­na­tional busi­nesses by offering mar­ket re­search, help­ing com­pa­nies to adapt prod­ucts and ser­vices to the US mar­ket, and pro­vid­ing other as­sis­tance at very low costs, said Chen.

“A so­lar com­pany in Wuxi, China, was in­ter­ested in sell­ing their prod­ucts in the US. The own­ers sent their kid here to study at LSU,” said Chen. “We taught the kid how to ac­cess the US mar­ket and understand the dy­nam­ics of do­ing busi­ness in the US through our cour­ses and in­cu­ba­tor. Now the com­pany is do­ing very well.”

The “kid” is Li Yi, founder and CEO of Ren­ogy, a com­pany spe­cial­iz­ing in re­new­able and green en­ergy. Li went to LSU in 2008 to even­tu­ally sell prod­ucts from her par­ents’ com­pany, HQ ST, in the US mar­ket.

“At first I did not know how to start. The in­cu­ba­tor pro­vided me with a lot of mar­ket­ing re­sources and helped me to get started. I am very grate­ful for that,” said Li.

Un­der the soft-land­ing pro­gram at the in­cu­ba­tor, Ren­ogy’s busi­ness had first-year sales of $1.3 mil­lion in 2010. An­nual rev­enue grew to $15 mil­lion in 2014 and $20 mil­lion in 2015. Ren­ogy now mar­kets prod­ucts not only from Li’s par­ents, but also from other coun­tries and re­gions. “Cur­rently only 40 per­cent of our prod­ucts come from HQ ST,” said Li.

How­ever, though it landed softly in Ba­ton Rouge, Ren­ogy even­tu­ally moved to Cal­i­for­nia in 2013.

“Louisiana’s pol­icy is not that sup­port­ive when it comes to re­new­able en­ergy. The state re­quires green-en­ergy prod­ucts to be made in the US to get any tax credit. Also, con­tainer ship­ping from China is more cost-ef­fec­tive to Long Beach, Cal­i­for­nia, than to Ba­ton Rouge. An­other fac­tor is, it’s hard to re­cruit tal­ent in Ba­ton Rouge when we wanted to scale up,” ex­plained Li.

Con­tact the writer at mayzhou@ chi­nadai­lyusa.com

MAY ZHOU / CHINA DAILY

Pana­max gantry cranes by the bank of the Mis­sis­sippi River at the Port of New Or­leans, which has been es­sen­tial to Louisiana’s econ­omy and at­tracted Chi­nese ship­ping gi­ant COSCO to the area.

Con­rad Ap­pel, Louisiana state se­na­tor

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