Chi­nese com­pa­nies in US out­per­form

China Daily (USA) - - FRONT PAGE - By CHEN WEIHUA in Chicago chen­wei­hua@chi­nadai­lyusa.com

Chi­nese com­pa­nies in the United States have be­come in­creas­ingly bullish, de­spite an eco­nomic slow­down back home in China.

The lat­est 2016 an­nual busi­ness sur­vey by the China Gen­eral Cham­ber of Com­merce (USA) shows that 51 per­cent of the Chi­nese-funded busi­nesses in the US had in­creased their rev­enue in 2015 over 2014, while 27 per­cent saw it re­main the same. About 22 per­cent saw rev­enue de­cline.

Mean­while, 42 per­cent of the com­pa­nies in­creased their prof­its in 2015 over 2014, while 34 per­cent re­mained the same. And 22 per­cent ex­pe­ri­enced a drop.

Over­all, 41 per­cent of the Chi­nese-funded com­pa­nies said their profit mar­gin is higher than their com­pa­nies’ global av­er­age, while 32 per­cent said they are the same as the global av­er­age.

“This shows the US is a great place to in­vest,” said Pin Ni, chair­man of the CGCC Chicago chap­ter and pres­i­dent of Wanx­i­ang Amer­ica, based in El­gin, about 40 miles north­west of down­town Chicago.

He also said that Chi­nese in­vestors have in­creas­ingly come to the Mid­west. CGCC data show that Chi­nese FDI in the Mid­west was $12.8 bil­lion in from 2000-2015.

The sur­vey also shows that the ma­jor­ity, or 53 per­cent, of the Chi­nese in­vestors are pri­vate, in con­trast to the gen­eral pub­lic per­cep­tion that sta­te­owned en­ter­prises are the dom­i­nant in­vestors.

It also shows that 56 per­cent of the com­pa­nies have op­er­ated in the US for fewer than five years.

“So there are lot of lessons to be learned and a lot of mis­takes to be made,” Ni told a packed au­di­to­rium of some 400 gov­ern­ment of­fi­cials and busi­ness lead­ers on Wed­nes­day at the chap­ter’s an­nual gala.

He de­scribed it as a learn­ing curve, and not only for the lan­guage and cul­tural dif­fer­ences. “There are many other things (where) the US and China are very dif­fer­ent,” he said.

“Let’s be pa­tient. As long as we give the child room to grow, even­tu­ally they will be­come very healthy adults,” Ni said.

US Pres­i­dent Barack Obama sent a con­grat­u­la­tory mes­sage to the an­nual gala.

“The United States and China are the world’s two largest economies, and to­gether, we must find co­op­er­a­tive mea­sures that help pro­mote growth around the globe,” Obama said. “Events like this pro­vide a plat­form for busi­ness lead­ers to unite in a spirit of col­lab­o­ra­tion to dis­cuss key is­sues and ex­change ideas.”

Obama said such ef­forts not only open doors of eco­nomic op­por­tu­nity for the peo­ple of both coun­tries, but also re­mind them that a con­struc­tive re­la­tion­ship be­tween the US and China is im­por­tant to the world.

Mayor Rahm Emanuel said Chi­nese FDI is pos­i­tive for Chicago.

Hong Lei, the new Chi­nese con­sul gen­eral in Chicago, called on Chi­nese com­pa­nies to make more con­tri­bu­tions to the Mid­west and shoul­der more so­cial re­spon­si­bil­ity.

The CGCC sur­vey shows that Chi­nese-in­vested com­pa­nies hired more Amer­i­can em­ploy­ees in 2015 than in 2014; most of them are rein­vest­ing their prof­its for ex­pan­sion in the US.

Ni noted that this has been a sen­si­tive subject, but Chi­nese com­pa­nies are com­ing to the US to cre­ate jobs.

How­ever, 58 per­cent of the com­pa­nies say they do feel bias against for­eign com­pa­nies in US gov­ern­ment pol­icy im­ple­men­ta­tion, re­flected in the var­i­ous in­ves­ti­ga­tions from tax com­pli­ance to in­tel­lec­tual prop­erty rights to anti-cor­rup­tion.

Only 34 per­cent said the Bi­lat­eral In­vest­ment Treaty be­ing dis­cussed be­tween China and the US will help them greatly or some­what, while 23 per­cent said there will be no im­pact; 43 per­cent said they didn’t know.

The BIT, pushed by both Pres­i­dent Xi Jin­ping and Obama in their sum­mit meet­ings in the past two years, has been largely stalled lately due to the US pres­i­den­tial elec­tion sea­son and the US gov­ern­ment pri­or­ity to press Congress to rat­ify the Trans-Pa­cific Partnership (TPP) dur­ing the lame-duck ses­sion late this year.

A re­port by the New York-based Rhodium Group last month shows that Chi­nese firms poured FDI of $18.4 bil­lion into the US in the first half of 2016. That is al­most three times the amount recorded for the first half of 2015 ($6.4 bil­lion), and more than to­tal Chi­nese FDI in the US for all of 2015 ($15.3 bil­lion).

An up­dated re­port re­leased by the Rhodium Group and the Na­tional Com­mit­tee on US-China Re­la­tions in April shows that the num­ber of Chi­nese-af­fil­i­ated com­pa­nies in the US ex­ceeded 1,900 by the end of 2015, ex­tend­ing across more than 80 per­cent of US con­gres­sional dis­tricts.

As green­field FDI picked up and many ex­ist­ing com­pa­nies ex­panded lo­cal em­ploy­ment, the num­ber of Amer­i­cans em­ployed by Chi­nese-af­fil­i­ated com­pa­nies rose by an­other 12 per­cent, to 90,000, ac­cord­ing to the re­port.

The CGCC has grown from a small or­ga­ni­za­tion with fewer than 100 mem­bers a decade ago to one with six re­gional chap­ters, six in­dus­try com­mit­tees and a to­tal of more than 1,000 cor­po­rate mem­bers, 40 of which are on the 2016 For­tune 500 list, said Xu Chen, CGCC chair­man.

Sandy Chu, prin­ci­pal and na­tional leader of the China Busi­ness Group of ac­count­ing firm Grant Thorn­ton LLP, de­scribed the Chi­nese in­vest­ment deals her com­pany has worked on as in­ter­est­ing and re­ward­ing.

The Chi­nese in­vestors have a wide range of in­ter­ests, from real es­tate and tex­tiles, to au­to­mo­tive, aero­space and in­surance, and more re­cently, health­care, she said, cit­ing hos­pi­tal pur­chases and ac­qui­si­tions of med­i­cal equip­ment man­u­fac­tur­ers and sur­gi­cal cen­ters.

Chu said she found it fas­ci­nat­ing that some Chi­nese in­vestors that ac­quire en­tire US com­pa­nies have not sent their own peo­ple from China to be in charge, but have kept all se­nior man­age­ment and left them alone.

“It sur­prised me when I first saw that,” Chu said.

The fol­low­ing com­pa­nies were hon­ored at the gala at the Art In­sti­tute of Chicago: The SAIC USA, Wanda Group Chicago and Wanx­i­ang Amer­ica were hon­ored as “Most In­flu­en­tial Com­pa­nies”. Nan­shan Alu­minum Co won the “Fast Grow­ing Com­pany” award, and Hainan Air­lines Chicago was named the “Best In­vestor”.

CHEN WEIHUA / CHINA DAILY

Chicago Mayor Rahm Emanuel (seated right) and Wanx­i­ang Amer­ica Pres­i­dent Pin Ni sign an agree­ment on Wed­nes­day for Wanx­i­ang to fi­nance Chicago high school stu­dents to study Man­darin. Chi­nese Con­sul Gen­eral in Chicago Hong Lei (back row, sec­ond from right) and Carola McGif­fert (back row, cen­ter), CEO of US-China Strong Foun­da­tion, also at­tended. The sign­ing cer­e­mony was held at the Art In­sti­tute of Chicago be­fore the open­ing of the Chi­nese Gen­eral Cham­ber of Com­merce Chicago Chap­ter an­nual gala.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.