Two years ago, the metro Atlanta region basked in China’s foreign investment largesse. An electrical parts company announced a Barnesville factory. A construction machinery maker chose Peachtree City.
And, most impressive of all, a Beijing-based business incubator — proposing $700 million in investments and thousands of spinoff jobs — decided Atlanta was just the spot for its U.S. headquarters, showroom and distribution center.
With direct Delta Air Lines flights to Shanghai on the radar and prospects for a coveted Chinese consulate, Atlanta was set to become the Southeastern beachhead for one of the world’s most dynamic economies.
It didn’t happen.
The factories haven’t opened. The direct flights were grounded. And the consulate remains a dream. Gone, due in part to the global recession, is talk of huge financial investments and thousands of jobs.
On Dec. 14, though, Chinamex, the incubator and marketing firm, will open offices in Atlantic Station. Three dozen small- to medium-size companies hawking everything from diamond cutters to silk quilts will set up shop on the first floor at 201 17th St.
“Their coming to Atlanta is significant because, before, the Southeast was generally ignored in China because they didn’t know us,” said Lani Wong, who heads the Atlanta chapter of the National Association of Chinese Americans. She also facilitated the Chinamex deal. “So this is important to introduce Atlanta and Georgia to the Chinese people.”
Chinamex isn’t mainland China’s first Georgia rodeo. The Georgia Department of Economic Development lists 17 Chinese companies or offices statewide. Hisense USA Corporation, a division of China’s largest flat-panel screen manufacturer, is in Suwanee. Lilburn is U.S. headquarters for the Hailun Co., piano makers.
But Georgia’s four major, ballyhooed Chinese investment projects announced since 2006 have produced very little or nothing. Kingwasong LLC vowed in 2006 to hire 200 people to make soy sauce in Newnan. A company official in New Jersey, who wouldn’t give his name, said last week that “there is no production right now.”
A year later, Sany Heavy Industry Co., a major construction equipment manufacturer, spoke of a $30 million investment and upwards of 600 jobs in Peachtree City. Construction, though, has stalled.
Matt Forshee, president of the Fayette County Development Authority, said Sany could begin building early next year.
General Protecht, an electrical component maker, announced in May 2007 a planned $30 million factory in Barnesville to employ up to 350 people. But company president Wusheng Chen got entangled in legal troubles including an FBI investigation involving Home Depot and proprietary pricing information. The 211-acre Lamar County site remains idle.
Jorge Fernandez, the Atlanta Chamber’s vice president for global commerce, said “Chen has been acquitted of everything” and the company has opened an office and warehouse in Cobb County. He said the Barnesville factory “isn’t completely dead.”
Atlanta’s burgeoning China connections seemed sealed in March 2008 when Delta inaugurated nonstop Atlanta-to-Shanghai flights. Eighteen months later, Delta canceled the direct flights. And the years-long quest to land a Chinese consulate in Atlanta — which would facilitate business, tourism and educational exchanges — remains as elusive as ever.
Fernandez remains unfazed by the myriad setbacks to Atlanta-Chinese relations. The Communist government’s emphasis on stimulating its own economy, as President Barack Obama is doing in the United States, takes precedence over overseas expansion, he said.
Penelope Prime, an economics professor and China expert at Mercer University’s Stetson School of Business & Economics, said, “Like with any new company going abroad, it’s not easy. There are totally different challenges and huge learning curves. But they’ll keep trying. This market is just too good for them not to.”
Chinamex gets an A for effort.
Feng Hao, the company’s chairman, announced in October 2007 that Atlanta would be home to an “incubator” for hundreds of Chinese companies eager to tap North and South American markets. Eventually, factories, distribution centers and headquarters would spring up across Georgia.
Hao said he’d put up $360 million. American partners were expected to raise a similar amount.
“I feel confident that Georgia is an ideal location for our pilot program,” Hao said at the time.
Atlanta business recruiters were starry-eyed over the possibilities. In 2004, Chinamex opened a half-mile-long, dragon-shaped agglomeration of showrooms, offices, research stations and restaurants in Dubai. Three years later, Chinamex joined with ING Real Estate and announced a trade and exhibition center at the airport in Amsterdam.
When the latest Chinamex incarnation opens Dec. 14, three dozen small- and medium-sized companies from Hubei Province, manufacturers of canned food products, herbal medicines, auto parts and precision drills, will be represented on the first floor of an Atlantic Station high-rise.
Chinamex, a private company based in Beijing, will establish its U.S. headquarters on 17th Street. It will also provide entrepreneurial, administrative and marketing support for the companies.
Other provinces may be showcased in ensuing years, said Paul Snyder, a spokesman for Chinamex. Chinamex will also assist American companies keen on doing business in China. Neither Snyder, Fernandez nor others could say how many jobs might be created or Chinamex’s overall economic impact.
“Some of the companies might be interested in importing into the United States,” said Fernandez, who helped broker the deal. “Other companies may be looking to buy U.S. parts and export them. Others may be looking for technology or partnerships. Hopefully they’ll gain roots in this market and go out on their own here in the United States.”
A scaled-back Chinamex, Fernandez and other say, is better than no Chinamex.
“They will need attorneys, PR firms, accounting firms — it all helps to generate revenue,” said Wong, with the Chinese-American alliance. “And, eventually, it could be very large revenue. That’s good news, especially with such a gloomy economy.”
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