When Chinese President Xi Jinping and a delegation of government and business leaders visit Washington this week, our star turn won’t be limited to Boeing and Microsoft.
This is a rare opportunity to showcase the state as a good place for foreign direct investment (FDI), including ramping up the number of U.S. subsidiaries of Chinese companies here.
Washington and Seattle connect with China in many ways, including trade, education and tourism. We are the No. 1 state exporter of merchandise goods to China. But FDI offers perhaps the most untapped potential.
According to the Rhodium Group, a global research outfit, China has done 35 deals worth $240 million in Washington from 2000 through the second quarter of this year. Real estate and hospitality, transportation and infrastructure are the biggest sectors to benefit.
Seahawks receiver Doug Baldwin struggles to find balance between football and life
Chinese president’s visit could wreak havoc on region’s traffic
Dog stands guard for week protecting trapped friend
3 couples share 1 lot, building 3 homes close to town perfect for retirement
Most Read Stories
Unlimited Digital Access. $1 for 4 weeks.
It’s not shabby, but it doesn’t match our performance in trade. We were outpaced by California, Texas, New York, Michigan, Illinois and North Carolina.
Since 2000, China FDI in the United States has totaled $54 billion. So there’s plenty passing Washington by.
Perhaps lulled by our strong export position, especially thanks to Boeing, Washington has only lately gotten serious about FDI. This is in stark contrast to many states, even less populous ones such as South Carolina and Alabama.
There’s a catch in dealing with China. Especially in the past, China’s FDI hasn’t been a big job creator. A Brookings Institution study of FDI through 2011 found only 16 jobs in Washington from Chinese-owned companies.
That ranked China No. 38 in FDI-based employment. By contrast, domestic affiliates of Canadian companies employed nearly 19,800 people in 2011. Japanese-owned companies employed 14,500.
According to Brookings, Washington ranked 19th nationally for FDI jobs in 2011, at 97,100. Of those, more than 65,000 were in metro Seattle, which ranked 14th among metropolitan areas.
A chief Chinese objective has been feeding its industry and its people.
In addition to buying heavily into real estate, Chinese money has especially flowed to commodities, energy and food. This was punctuated by the 2013 acquisition of Smithfield Foods by a Chinese company for $7.1 billion.
One prominent Chinese venture here is Northwest Innovation Works, formed by the Chinese Academy of Sciences Holdings, the commercial arm of the research institution. Computer and device-vendor Lenovo is one of hundreds of ventures birthed by the Academy of Sciences.
Northwest Innovation Works is proposing three methanol refineries in Washington and Oregon, including a two-phase, $3.4 billion plant at the Port of Tacoma. The venture says the project would provide 1,000 construction jobs and 200-260 permanent operating positions.
The plants would take natural gas from the United States and Canada, convert it to methanol for shipment to China. There it would become petrochemical feedstocks for making plastics.
The total environmental effects are being debated, but the refineries would have a cleaner footprint than other fossil-fuel exports.
With a big toe dipped in Northwest waters by the Chinese Academy, it’s a natural fit to find partnerships with Chinese companies for Washington’s emerging clean-tech sector.
China is eager to clean up its environment and become less dependent on fossil fuels. For example, last week more than a dozen Chinese cities pledged to reach their peak CO2 emissions by 2020, a decade before the country as a whole has promised the same milestone.
Also, as Brookings notes, “Chinese companies now have an increasingly large presence in places with strong technology clusters.” In San Jose, for example, Chinese investors are interested in information technology.
Xi’s visit is a great time to show off the tech sector here for potential Chinese partners or for Chinese companies to locate their American technology headquarters here.
This is a long march. China is facing slowing growth and a painful transition to a consumer and services economy.
But the relationships forged in the coming week could pay dividends in the decades ahead.
Leave a Reply