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Unlock Secrets to Attracting Chinese Investment in Michigan

Inaugural Investor Briefing Unlocks Secrets to Attracting Chinese Investment in Michigan

Detroit and Michigan are ripe for investment from Chinese businesses. As China continues to wrestle with instability in its own market, currency devaluation, economic slowdown and market saturation present a different opportunity. That was the key message a panel of economic development partners led by the Detroit Regional Chamber’s Business Attraction team, stressed at the Chamber’s inaugural Investor Briefing in August.

Held quarterly, the Investor Briefing is meant to inform and engage Chamber Foundation investors about efforts to grow the regional economy. The inaugural forum focused on market trends and business development opportunities in China based from partner outreach in the market and information obtained during the Chamber’s recent outreach at the Shanghai Auto Show, as well as trade mission trips to Ningbo and Ninghai.

The panel included representatives from Clayton & McKervey P.C., Comerica Bank, Dickinson Wright PLLC and Oakland County.

Don’t Ignore the Little Guy

Investor Exclusive #1In addressing a question about investment trends in China, Alan Weber, senior business development representative for Oakland County Economic Development & Community Affairs, said after meeting with numerous plastic injection molding companies in Ningbo and Ninghai, he is noticing more small and medium-sized businesses are willing to take risks and seek out expansion in the U.S. market.

“What we traditionally see in the international market is companies that already have contracts here in Michigan and wish to open up operations because of that. What we found in Ningbo and Ninghai was that a lot of companies didn’t have pre-existing contracts and wanted to explore the market by opening up sales and marketing offices initially,” he said.

Clayton McKervey’s Tim Hilligoss (pictured), international accounting practice leader for Asia, agreed, stating that Chinese companies with $5 to $10 million in sales are a new economic development player.

“The fact that they are looking outside of their home country for acquisitions of similar size or intellectual property that may give them an edge in the technology race is something I haven’t seen before,” he said. “It’s a big step for a small entrepreneur to consider coming to another country, but they see the value in having a presence in Detroit.”

Justin Robinson, director of business attraction for the Chamber, said as a result of the numerous one-on-one meetings at the Shanghai Auto Show and in Ningbo, the Chamber’s Business Attraction team has been contacted by five prospects specifically interested in the Detroit market. Since April, three of those prospects have already visited Southeast Michigan.

“We’re really looking for those that are very serious about taking that next step in the short-term, as well as identifying that long-term pipeline of businesses that we will continue to cultivate and build relationships along with our network of partners,” he said.

Technology, Product Diversification Key to Success

Investor Exclusive #2Mark Heusel, director of Dickinson Wright’s Chinese Practice Group, visited Ninghai for the first time and said he was amazed at the level of automotive supplier partnerships supported by the government, which is reflected in the country’s high-quality tool and die and molding facilities.

Additionally, Heusel said Chinese companies also understood that technology is going to drive their success.

“They are looking at diversifying their future product offerings. No longer is it simply just an automotive plant. It is, ‘Can I sell medical supplies?’” he said, adding that Michigan companies should embrace this mindset.

“We need to pay attention to this. As the Chinese market contracts, a lot of these private investors are going to be looking elsewhere to expand their operations and places like Ningbo that are supporting these higher quality products are places we should be hitting on all cylinders in terms of business attraction.”

Mark your calendar for Nov. 13, for the next Investor Briefing: Positioning Michigan and your Clients for Future Success with Site Selectors. To view a full list of investors and past Investor Exclusive content, visit our Investor Resources page.

Click here to read the quarterly Investor Update.