Friday, December 4, 2009
A gateway for Chinese business
Chinamex will help Chinese companies get foothold here
Atlanta Business Chronicle - by Douglas Sams Staff Writer
A company that wants to form a jobs and investment pipeline between China and the Americas is putting its North American headquarters in Midtown's Atlantic Station.
Chinamex will lease 14,000 square feet on the ground floor of 201 17th Street , an 18-story tower that helps anchor the office component of the giant mixed-use development.
Chinamex chose the building because it offered a highly visible site along the Downtown Connector, an intown location with access to housing and shopping, and the option to expand, said the company's top U.S. executive, Hanson Zhang.
“We looked in Buckhead and [Central Perimeter],” he said. “We wanted a high-traffic area near the central business district. We needed shopping, residences. We wanted everything together.”
Chinamex swings open doors, relationships
Monday, December 14, 2009, 12:19pm EST
Julie Bryant Fisher
Managing Editor
State economic development executives along with commerce leaders from China 's Hubei province gathered Dec. 14 at Atlantic Station to officially open the doors of international investment and business incubator Chinamex.
The opening signals the start of new business opportunities for Chinese companies looking to do business in the U.S. and the potential for new Chinese companies in Georgia .
Yajie Yuan, deputy commissioner for the Hubei Province Department of Commerce hailed the opening of Chinamex's North American headquarters in Atlanta as a key portal for improving the exchange of ideas between Georgia and China and, ultimately, improving the development of investments from the Hubei province to Georgia and from Georgia to the Hubei province.
The result of five years of relationship building, joint economic development efforts and basic logistics, the opening of Chinamex ushers in the potential for Chinese companies wishing to do business in the U.S. to form a beachhead in Atlanta , noted Georgia Department of Economic Development Commissioner Ken Stewart.
Up to 100 pre-screened companies in China have already qualified to take part in the Chinamex incubator - all of which have a serious and organized interest in doing business in the U.S. , according to Chinamex leaders.
Yuan pointed out several joint industry interests that exist between Georgia and the Hubei province, particularly manufacturing, but also including auto parts, steel and food manufacturing.
Mayor-elect Kasim Reed was on hand at the lively ribbon cutting ceremony, which featured a Chinese Dragon Dance.
"More than a commercial relationship...we offer the hand of friendship," said Reed, who appeared alongside Yuan; Commissioner Stewart; Chinese Consul of Commerce Wenliang Yao; Atlanta City Council President-Elect Ceasar Mitchell; City Councilman for District 2 Kwanza Hall; Senior Vice President for Economic Development for the Metro Atlanta Chamber Hans Gant; Chinamex USA chief representative Hanson Zhang; Managing Director of AIG Global Real Estate John Whitaker; Cushman & Wakefield Senior Director Frank Mann and Chair of the National Association of Chinese-Americans, Lani Wong.
"We hope this will help Atlanta connect with central China and beyond," said Wong.
Noting the Chinamex headquarters opening as an "important step," Metro Atlanta Chamber's Gant said the move echoes across Georgia and the country, in terms of potential. The Chamber and the Georgia Department of Economic Development have officially signed agreements between Chinamex and the Hubei Province confirming efforts to support that potential.
The Chinese delegation will spend the next two days hearing from state and city representatives along with local business leaders, including from United Parcel Service (UPS) Inc. in a series of meetings and a formal dinner.
Chinamex, which opened in Beijing in the late 1990s, has been responsible for placing more than 3,000 Chinese businesses in countries throughout the world. Atlanta represents their fourth headquarters and the first North American headquarters, which will serve all of North America and South America .
Future of Atlanta-China business ties
Monday, December 14, 2009, 12:27pm EST | Modified: Monday, December 14, 2009, 1:14pm Mason Cargill Jones Day
The opening of the Atlanta office and showroom of Chinamex is an important milestone in the development of business relationships between Atlanta and China .
Hopefully, the Chinamex facility represents one of a continuing stream of Chinese companies making investments in the metropolitan Atlanta area. It seems likely that many future in-bound investments from China will be in the wholesale and distribution business. Chinese manufacturers will seek to acquire existing businesses which distribute their products in the United States , especially those with valuable trademarks which have identified the Chinese manufactured goods.
The Chinese companies would be moving beyond their roles as “OEM manufacturers” in order to own their distribution channels within the United States . Other Chinese manufacturers may also form joint ventures with their U.S. distribution companies. Atlanta would also be an attractive place for Chinese companies to acquire or establish distribution companies, due to Atlanta 's prominent role as the logistical and transportation hub of the southeastern United States .
Chinese technology companies may also wish to pursue joint ventures with, or acquisitions of, United States technology companies for the primary purpose of acquiring advanced technology which could be used for manufacturing purposes back in China . In view of Atlanta 's significant community of technology companies, Chinese companies may come here for this purpose.
Except for special situations, it seems unlikely that many Chinese companies will make greenfield manufacturing investments in our area (as Japanese and, more recently, Korean companies have done). The primary motivation of Japanese companies to establish manufacturing facilities in the southeastern United States was to take advantage of lower labor rates than in Japan . No such incentive would ever exist for a Chinese manufacturer. Even if the Chinese yuan is revalued against the dollar, Chinese labor rates would, for the indefinite future, be substantially lower than those in the United States .
Finally, given China 's huge foreign currency reserves, we may see pure financial investments from China in our area. These may include indirect investments through private equity and venture capital funds as well as direct investments by the Chinese sovereign wealth fund.
In spite of the growth of inbound investment into the Atlanta area from China , the bigger story for business connections between Atlanta and China will continue to be outbound investment to China by U.S. companies headquartered in our metro area.
Initially, outbound investment to China was the exclusive province of giant Fortune 100 companies, such as Coca-Cola and UPS. However, in recent years, medium sized businesses from this area have taken the plunge into China . These outbound investments can be generally grouped into three categories. First, U.S. manufacturers have established greenfield manufacturing operations or joint ventures in China to manufacture cheaper products for export back to the United States and to Europe . The second category consists of U.S. manufacturers who have established greenfield manufacturing plants or joint ventures in China in order to supply the huge domestic Chinese market, where price competition is fierce.
U.S. manufacturers, even those with very strong brand names, find it difficult to compete in China with products exported from the United States , due to higher costs here. Finally, U.S. service providers have more recently made entries into the Chinese market. The services offered by these firms include architectural and engineering services, technology and management consulting services, and financial services.
Mason Cargill, a partner in global law firm Jones Day's Atlanta office who represented Chinamex in the establishment of its facility here, has been deeply involved with China for over 20 years. He has represented U.S. corporations in their joint ventures, acquisitions, and greenfield projects in China , including the developer of the Shanghai Centre mixed-use real estate project, the first major foreign real estate investment in China , as well as PRC state enterprises in their transactions with U.S. corporations. From 2003 to 2005, Mason was based in Jones Day's Shanghai Office, where he was responsible for coordinating cross-border investment transactions.
Atlanta Business News 8: 00 a .m. Saturday, December 5, 2009
China 's big entry late but welcome
Previous Chinese plans for region got some fanfare, then no results
By Dan Chapman
The Atlanta Journal-Constitution
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.”
Atlanta Business News 8: 00 a .m. Saturday, December 5, 2009
Chinese business incubator to open in Atlantic Station
By Dan chapman
The Atlanta Journal-Constitution
A Chinese business incubator/marketing center is set to open Dec. 14 in Atlantic Station.
Two years after its ballyhooed announcement, Chinamex will cut the ribbon on a scaled-back U.S. headquarters at 201 17th Street .
Chinamex, a Beijing-based, government-sanctioned, business development company, will help Chinese companies expand in Georgia , the United States and Latin America . It runs similar operations in Dubai and Amsterdam .
Three dozen small and medium-size Chinese companies — diamond cutters, silk producers, precision drill makers, canned food exporters — will have representatives at the Midtown complex.
The China Hubei Enterprises Marketing Center will also set up shop alongside Chinamex.
Chinamex announced its U.S. headquarters in late 2007. At the time, thousands of jobs and hundreds of millions of dollars worth of Chinese direct investment were anticipated one day.
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