Chinese Companies Leaving A Bigger Footprint In the U.S.

By: CNN (posted by Justin Surrency) Email
By: CNN (posted by Justin Surrency) Email

CNN--Chinese conglomerates, on a mission to expand their global footprint and avoid "anti-dumping" tariffs, are shifting more of their production to America.

In the United States, cash-strapped states desperate for revenue and jobs, are rolling out the welcome mat for foreign companies that can guarantee both.

More Chinese manufacturers have been launching their own U.S. facilities in the last five years, said Thilo Hanemann, research director at Rhodium Group, a New York-based economic advisory group.

The biggest investments are being made by Chinese firms with products that have been slapped with hefty anti-dumping tariffs, he said.

The United States imposes these financial penalties on imported products that it believes are being sold cheaper than the cost it takes to produce them. Dumping creates an unfair advantage in the marketplace, according to the Department of Commerce.

Alabama's sweet manufacturing boom
In recent years, the agency has imposed these fines on solar technology and heavy industrial products from China, including steel pipes, copper tubing and aluminum extrusions.

Xinxiang, China-based Golden Dragon Precise Copper Tube Group, Inc., the world's largest producer of copper tubing used in air conditioning, refrigeration and autos, broke ground last month on a $100 million plant in Thomasville, Ala.

It's the first Chinese owned-and-operated plant to enter the state. The 400,000-square-foot facility is expected to create 300 American jobs when it's up and running in 2014.

Golden Dragon filed for an IPO in China last month and is in a quiet period. It declined to comment for the story.

Raymond Cheng, CEO of Hong Kong-based consulting firm SoZo Group, helped coordinate the deal for Golden Dragon and is working with 30 large Chinese manufacturers that want a presence in the United States.

"For many of these companies, their biggest customers are in the United States," Cheng said. "It's a tactical advantage to be next door to your biggest client."

Opening up a plant in the United States allows Chinese producers to save on transportation and fuel costs. For instance, Golden Dragon's Alabama facility will be right next door to its largest customer Goodman Manufacturing in Houston, said Cheng.


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