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2014 China Trade Mission Reveals Mounting Interest in Detroit Region Among Auto Suppliers

2014 China Trade Mission Reveals Mounting Interest in Detroit Region Among Auto Suppliers

With Detroit’s emergence from bankruptcy and the comeback of the U.S. auto industry, the Detroit Regional Chamber continues to aggressively target the Asian business community as interest in expanding into the U.S. market among auto suppliers grows. These efforts most recently included a weeklong trade mission in November to China co-led by Gov. Rick Snyder and the Michigan Economic Development Corporation (MEDC).

The trade mission was the fourth of its kind to China in the past four years, and included stops in Beijing, Shenyang, Guangzhou, Shanghai and Hangzhou.

Maureen Krauss, vice president of Economic Development for the Chamber, said cultivating relationships with Chinese prospects is important because positioning the region and state for sustainable economic growth requires attracting investment from outside Michigan. China is the state’s third largest trading partner behind Canada and Mexico, with the largest export being automotive and other transportation equipment, two of the state’s largest industries.

“When we go to China, it’s pretty typical that there’s already an existing relationship in place between the prospect and a U.S. OEM or Tier 1 supplier that has a heavy presence in the country,” she said citing Ford Motor Co. and General Motors Co. as two examples. “Business Attraction’s role comes in when the prospect is pretty comfortable with that established relationship and is at that point where they begin looking to expand in the U.S. market.”

Auto industry’s comeback propels investor interest

During the November trade mission, Krauss helped facilitate numerous meetings between the Governor, the MEDC and several Chinese prospects that the Chamber and its partners developed relationships with over the past year.

She said many of the prospects cite the Detroit region as the global leader in automotive technology and advanced manufacturing as their No. 1 reason to consider expanding operations in Michigan versus other areas of the country.

“Many of the prospects already specialize in advanced manufacturing techniques, but the Chinese culture views coming to the United States and being successful here as a critical component of their long-term strategy,” she said.

Throughout the week, Krauss said discussions centered on questions regarding the automotive market in the Detroit region, access opportunity to the global automotive supply chain and key OEM and Tier 1 automotive decision makers, and the region’s economic stability following Detroit’s bankruptcy.

Framing Detroit’s bankruptcy

In addition to meetings and ceremonial contract signings with state officials, Krauss said the trip also provided a chance to frame Detroit’s bankruptcy to the foreign press.

“The Chinese media has heard about the state, the region and the automotive industry coming back and they are clamoring for the real story,” she said. “They want a firsthand account of what’s actually happening here.”

By providing investors with fact-based data, Krauss said the Chamber and its partners have begun to see skepticism slowly give way to questions about Michigan’s workforce capacity, contract opportunities and market diversification.

In terms of potential Chinese investment in Michigan, Krauss said economic developers believe the country’s capacity to be a top market for the next 10 years or more is a certainty.

“With 1.2 billion people, the Chinese market continues to evolve quickly. It’s a market we learn something new about every trip,” she said.