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An outsourcing reversal: Chinese firms in US

Places from Richmond, Va., to Barstow, Calif., are already wooing foreign direct investments.

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Another major Chinese company, Haier, which produces everything from flat-screen televisions to refrigerators there, is producing refrigerators in South Carolina. "Their effort is to penetrate by trying to build a brand name in the same way the Japanese did," says Mr. Straszheim. "But I think sometime in the next few years they will abandon this strategy and make a pass at a well-known name like Maytag or Whirlpool."

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Certainly, many Chinese companies could learn something from the US about marketing. For example, Greg Wingfield of the Greater Richmond Partnership has traveled many times to China to seek direct investment. One of the hotels he has stayed in is called the Handsome Boy Monkey Hotel. "I've said to Chinese executives, 'One of the first things you have to do is find a name that is understandable in English and not taken by another company,' " he says.

No matter, many local officials in the US are jockeying for position to win Chinese investments. Massachusetts officials, besides trying to secure investments in the fishing business, think the area is ripe for investments in medical products and pharmaceuticals. "Ultimately as they bring their products over here and need the full licensing and permitting that is required on the high-tech end of things, Massachusetts is the logical landing spot [because of the presence of legal personnel who can take care of it]," says Julian M√ľnnich, treasurer of the Massachusetts International Trade Council.

Last week, Philadelphia officials met with a Chinese delegation in New York for the Chinabrand 2005 expo. They talked about the city's educational facilities and an upcoming extravaganza called the Splendor of China, which will attract 400 Chinese companies to the city. "And we want to remind people that one-third of America is within one day's truck drive," says Curtis Jones Jr. of the Philadelphia Commercial Development Corp.

The concept of how to do business with the Chinese is spreading fast - even to as small a place as Lockhart, Texas, (pop. 13,000). Last week, a delegation of Chinese executives was entertained with mariachi music and left with cowboy hats. "Our intention is to develop a relationship in order to recruit in the future," says Sandra Mauldin, director of economic development.

There is no doubt that some Chinese entrepreneurs are looking for places to invest. Last year, Ron Rector, economic development manager in Barstow, Calif., found a real estate company that tries to hook up Chinese companies with communities. Now, Barstow has a new employer, United Plastics (Ca.) Inc.

"The Chinese see the US as a safe harbor for investment," says Mr. Rector. "Beyond that, they see the US as a place for their children to get educated."

In fact, some areas are emphasizing their relatively long ties to Asian culture. That's the case in Richmond, which boasts of its Chinese school run by Chinese nationals as well as good Chinese restaurants and Asian cultural events.

That made a difference to the Uquality Automotive Parts Corp., which set up a distribution center last year. "The whole Asian community thing and Asian schools made a difference," says Steve Moss, the operations manager.