Special Report:
Georgia Welcomes Chinese Trade and Investment

With the U.S. trade deficit with China surpassing $230 billion and China’s foreign currency reserves now more than $1 trillion, a Chinese delegation’s recent visit to the United States promising billions of dollars of investment and purchases was greeted with some skepticism – but not in Georgia.

China hardly yielding on its exchange rates making its exports irresistible and thus guaranteeing a continuing trade deficit.

But Jagdesh Sheth, Charles H. Kellstadt professor at Emory University’s Goizueta Business School, sees a fundamental shift in Chinese economic priorities.

“These announcements are unlike the early days when China would promise and not deliver,” he told GlobalAtlanta.

Dr. Sheth’s views seemed to be echoed at a dinner sponsored by the law firm Womble Carlyle Sandridge & Rice PLLC at the Metro Atlanta Chamber where Ma Xiuhong, vice minister of China’s Ministry of Commerce, was greeted by a flurry of toasts and camera flashes.

In San Francisco, she already had announced that China was on a $4.3 billion buying mission. Wusheng Chen, a Chinese entrepreneur, who announced his company would build a $30 million electrical parts factory in Barnesville, accompanied her to Atlanta.

Last year Georgia’s Coweta County announced that it had landed the first major Chinese manufacturing venture – a food and beverage company that also made packing products.

“China wants to develop its domestic consumption similar to the U.S. after the Civil War,” Dr. Sheth said. “China wants to buy from the rest of the world, just the way that WalMart sources from around the globe.”

In Dr. Sheth’s view, China’s foreign currency stash provides it with a new confidence, enabling it to develop its internal consumption market. Unlike the development of the U.S. consumer market, however, China’s government will play a dominant role, he said.

Besides investing abroad, China now is also spending on research and development and last year surpassed Japan to become the second largest investor in R&D, trailing only behind the U.S.

The Chinese research dollars are going into innovations that can be transferred immediately into commercial products, unlike U.S. discoveries that take longer to commercialize, according to Dr. Sheth.

“China is following what the U.S. did, but it will do it faster, and given 1 billion people, it will have greater lift,” he added.

Meanwhile, Georgia can look forward to more Chinese foreign investment, he said.

But he remains perplexed about why Georgia’s banks, farmers, kaolin and timber interests and educational institutions are so slow to become involved in China’s new consumer market.

This GlobalAtlanta Special Report focuses on the developing relationships between Georgia and China in business, trade and cultural exchanges.