In a business park next to Chicago-Rockford International Airport, Illinois
Gov. Pat Quinn was on hand in August for the ribbon-cutting of a high-tech
plant that makes solar panels.
As the Illinois metro area with the highest unemployment rate, 13.7 percent, Rockford desperately needs the 60 jobs that the factory has promised to create. But the plant in the down-on-its-luck city is also notable for another reason: It's owned by the Chinese.
"Rockford is a great blue-collar town that has suffered a bit lately, and we were able to see eye to eye" with the city's mayor as well as state officials, said Gary Wetzel, chief operating officer for Wanxiang America Corp., which also has an auto-parts warehouse and its U.S. headquarters in Elgin.
Wanxiang's $12 million solar-panel plant, which received more than $2 million in state tax incentives as well as certain commitments from Rockford, has 15 workers making solar panels for building contractors, colleges and cities, including Rockford. But it has committed to ultimately employing 45 more.
Wanxiang is one of about 40 mainland China companies doing business in the Chicago area. None are household names, though one recent deal, the purchase of a Bolingbrook printing-products company, Goss International Corp., for a reported $1.5 billion by Shanghai Electric Corp., exemplifies the potential for Chinese investment. That's why local civic leaders hope to bag more Chinese companies as the city rolls out the red carpet this week for China's president.
Friday at the U.S.-China Trade & Economic Cooperation Forum in Chicago, about 60 U.S. and Chinese companies will participate in a contract-signing ceremony, highlighting 25 to 30 new business agreements, according to the Chicago Council on Global Affairs. The pacts will feature a mix of U.S. companies wanting to do business in China and Chinese companies wanting to invest in the United States, a council spokeswoman said.
Speakers at the event include U.S. Commerce Secretary Gary Locke. About 400 Chinese business delegates, including the chairman of a nuclear power technology corporation, the president of Anhui Jianghuai Automobile Co. and the CEO of a drug company, are expected to be among the attendees. Topics include the 10-year outlook on China-U.S. business relations and how to promote the green economy.
When Chicago-area economic-development types are asked about significant Chinese companies that have set up shop in the Chicago area, Wanxiang tops their list.
But there's also Goldwind, a wind-energy generator that just set up its U.S. headquarters in Chicago. And BYD, a Chinese battery business in which Warren Buffett has a 10 percent stake, has a sales office here.
Other Chinese companies with operations in the Chicago area include Yuanda, a maker of glass products with a downtown Chicago office, and Huawei, a telecommunications business with operations in Rolling Meadows.
Wanxiang, which established its U.S. headquarters in Chicagoland in 1993, has 35 workers in Elgin. In the past 15 years the company, headed by President Pin Ni, has acquired 12 other U.S. companies.
"When we decided to build a facility in the United States, Pin selected Chicago because it's central to a lot of markets," said Wanxiang's Wetzel. "You've got O'Hare International Airport and a lot of freight yards and trucking companies."
But Alan Tonelson, research fellow at the U.S. Business & Industry Council, said he suspects that Chinese companies are increasingly investing in the United States "largely for show" to gain access to the U.S. market to keep Chinese exports flowing here.
"Given trade frictions in recent years, it makes sense for the Chinese to buy some U.S. goodwill with a few token investments in manufacturing with this country," said Tonelson, whose group says it represents mostly family-owned U.S. manufacturers.
Even though the employment numbers are relatively small, Chicago civic boosters, led by Mayor Richard Daley, believe that courting Chinese businesses is worth the effort, as California, Minnesota and many other states are competing for the attention of Chinese companies.
"We want to be top of mind for Chinese companies who are looking around the United States," said Tom Bartkoski, international business development director for World Business Chicago. "There's just tremendous, vast potential," he said, noting that no state wants to miss out if Chinese companies, like Japanese, Western European and Canadian ones before them, set up significant U.S. operations.
Here's a sampling of the Chinese companies that are doing business or have made investments in the Chicago area:
Changzhou Asian Endergonic Electronic Technology makes an accessory that mounts GPS devices to dashboards. Its U.S. headquarters is in Chicago and it teamed with a Chicago-based branding specialist, Monogram Group's Scott Markman, to come up with a name for its own branded dashboard mounts, called Zuuma. Changzhou's U.S. efforts were featured in a Wall Street Journal article in July. Markman said he's also working with a Chinese garden products-maker called Green-Ship to establish its U.S. headquarters in Chicago.
Chinese companies also have made investments in at least two local furniture companies. Shenley Sofa Corp., in Rolling Meadows, is owned by Hangzhou Wiway Furniture Industries Co., World Business Chicago says. Also, in 2009, Chinese manufacturer Markor International Furniture acquired upholstery importer Schnadig Corp., of Des Plaines, in an $8.9 million deal, according to Furniture Today.
Rhodium Group, a New York-based firm that tracks direct investments and deal-making by Chinese businesses, said one of the biggest recent purchases of an Illinois company by Chinese interests was the acquisition of Goss International Corp., a Bolingbrook-based printing-products company, for $1.5 billion by Shanghai Electric in a two-part deal occurring in 2009 and 2010. --
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