American cities woo Hong Kong for investment money
| Hong Kong
The city councilman from America was flushed with excitement. A wealthy Hong Kong executive's intention to invest in the councilman's city was reinforced by detailed questions like: What kind of electronic security system would best be suited for the investor's new American premises?
The delegations from 60 American state, county, and city governments undoubtedly hope to meet with that kind of success at the ''Invest in America's Cities'' program here, sponsored by the United States Conference of Mayors. Their success could be aided by the so-called ''1997 jitters,'' which refers to the expiration of Britain's lease from China on 90 percent of Hong Kong's land. The Chinese have declared that they will recover sovereignty over Hong Kong.
Although China has stressed it will maintain Hong Kong's prosperity, local businessmen, many of whom fled from the mainland after the communist takeover, remain uneasy about their companies and investments in the colony. The Hong Kong government estimates that last August alone $300 million (US) left the colony, an estimate considered low by some businessmen here.
Organizers of the conference are quick to say that the program is aimed at investors from all over Asia and that they are not trying to undermine confidence in Hong Kong's future. But according to a US lawyer whose firm specializes in international financial packaging, ''The timing is such that Hong Kong investors will naturally look a lot closer at investment opportunities in the US.''
For three days last week (March 15-17), potential investors could take a walk through America in the ballroom of a posh Hong Kong hotel chock-full of booths from such diverse areas as Newark, N.J.; Chicago; Albuquerque, N.M.; and Santa Ana, Calif. Seminars offered included topics such as the US real estate market, labor relations, tax issues, and US immigration laws.
Mayor Kenneth Gibson of Newark estimated that he had received at least 10 positive inquiries by the second day of the conference. Portland, Ore., Mayor Frank Invancie said he expected mostly property investors, but was pleasantly surprised to receive a number of questions about setting up manufacturing concerns.
''Of course, there are no instant miracles,'' Mayor Ivancie said, ''but like any salesman you can't beat the personal contact.'' Conference delegates felt that they were meeting with the decisionmakers, but not so much at the exhibition. ''Knocking on doors is where the real business takes place,'' said Mayor Gibson. Some cities knocked on tonier doors than others. Lexington, Ky., retained the services of Arthur Andersen & Co., a major US accounting firm with offices here, to make appointments with a special eye to promoting Lexington's most famous product - thoroughbred horses. It paid off. The stewards of the royal Hong Kong Jockey Club, who number among Hong Kong's leading tycoons, hosted a reception at the club for the Lexington delegation.
Questions fielded by the various cities included the quality of the labor force, transportation facilities, and tax incentive programs. But the overriding question concerned visa and immigration matters. ''If a Hong Kong businessman says he is looking at a substantial investment and wants to know what he has to do for US citizenship, I make it clear that he can't buy a green card, but can better position himself with a large investment,'' said one city representative who did not wish to be identified. According to Anthony Lee, president of Transcontinental Services Inc., which coordinates investment and immigration for those interested in moving to the US, ''Most (Hong Kong Chinese) don't want to move permanently, but they want the green card for security.''
With Hong Kong's uncertain future in mind, the Philippines will effectively offer permanent residence for substantial investments, and Thailand is considering a similar move. Countries such as Canada and Australia have added special quotas to their immigration laws for entrepreneurs. Recently, the Simpson-Mazzoli bill, which would add a quota for the well-heeled entrepreneur, was reintroduced in the US Senate.
But city officials have had to do more than just sell foreign investors on their areas. They have also had to sell the idea to their constituencies. ''We have had to get across the idea that we are not selling off America, but that we are selling jobs,'' said John Gunther, executive director of the US Conference of Mayors. High unemployment in US cities has also been aggravated by the Reagan administration's federal aid cuts. ''If we don't help ourselves nobody else will ,'' Mr. Gunther said.
The mayor's conference also sponsored an exhibition in Zurich in 1981 which, among other accomplishments, landed a $35 million office complex in Portland, Ore., by a German concern and Italian investment in port facilities in Norfolk, Va. Thomas Cooke Jr., mayor of East Orange, N.J., said, ''Even labor unions realize that if we bring in plants, they'll bring in more jobs.''
US Commerce Department figures show that direct foreign investment in the US increased 31 percent in 1981, to $89.8 billion. About 3 percent of the total was from Asia, primarily Japan.
It was the success of the Zurich conference that got many cities interested in looking for overseas investors again. Wilmington, N.C. (pop. 44,000), came because of the city's independent efforts in inducing a Japanese manufacturing plant - Takeda Chemical Industries - to locate in Wilmington last year. In good Southern conservative fashion, Wilmington Mayor Benjamin Halterman said, ''We don't have giveaway programs. We want industries strong enough that they don't need subsidies.''