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Print Edition> World
UPDATED: May 6, 2011 NO. 19 MAY 12, 2011
All Politics Is Local
Exchanges add to the dynamism of bilateral relations between cities in China and the United States

STRENGTHENING CITY-LEVEL COOPERATION: Shanghai Vice Mayor Tu Guangshao speaks at the meeting of the U.S.-China Initiative on City-Level Economic Cooperation in Seattle of the United States on April 19 (WANG CHENGYUN)

Famous as the site of the Terracotta Warriors, Xi'an is a second-tier city in northwest China whose GDP growth last year stood at 14.5 percent. It has been a sister city for Kansas City, Missouri, since April 1989.

"We have sent delegations back and forth and have learnt about each other," Marc Funkhouser, Mayor of Kansas City, told Beijing Review. He said having a sister city in China means having a friend there and that relationship helps a lot when his city is trying to compete for business in the country.

The building of that relationship is all about match making. When you seek to build a sister-city relationship, "don't look for the population, look for what you have in common," Linda Dawson, Executive Director of Economic & Community Development Department of the City of Anderson, told U.S. mayors and officials at the annual meeting of National League of Cities that took place alongside the bilateral event. The city with a population of around 58,000 in Indiana State is the sister city for Yuhang District of Hangzhou, Zhejiang Province.

"We took about nine months looking at what his city has and what my city has to see if they are compatible," said Paul Natale, Mayor of Commerce City, Colorado. He started to build the sister-city relationship with the Mayor of Nanning, Guangxi Zhuang Autonomous Region in south of China, about two years ago.

"We help south China develop and it helps western United States develop," Natale said. "It's an exciting cooperation."

Growing investment

Satisfaction could be found in the words of Jubao Xie, President of H.D.S. Investments LLC, when he talked to Beijing Review about his business in Redmond City, Washington State. He has been working on a real estate and hotel-related project signed in June last year, which in total will bring $110 million to the city.

"The project has been going very smoothly with $20 million already put in place," he said. Another $30 million will arrive later this year with other portions coming in succession until the project is finished in 2013.

"Only after I learnt the policy environment in the United States, I started to think about making investments here," Xie said. There are neither preferential nor discriminatory policies toward foreign investors in Washington State, which is fair, he said. "I'm glad I come and do business here."

"We're open for business and we invite you to come and see for yourself what Washington State has to offer," Washington State Governor Christine Gregoire said in a video statement addressing the Chinese mayors and business executives convening in Seattle. "Washington State is rich with investment opportunities," said Gregoire who is also the current Chair of the National Governors Association.

She has been a strong advocate for increasing connections between China and the United States. Last September, she led a delegation of more than 100 individuals from 50 different organizations to visit China, the largest trade mission for the state, said Roger Weed, Director of the Washington State Department of Commerce.

The department has been making efforts to recruit foreign direct investment in Washington State. Particular efforts underway geared toward China include Chinese language materials that help potential Chinese investors understand the legal landscape of setting up and conducting business in the state, said James Palmer, the department's Economic Development Manager for the Washington State Department of Commerce.

"On the local level, making good investments depends on having good information," said Joseph Borich, President of the Washington State China Relations Council, a Seattle-based organization founded in 1979 to promote the commercial and cultural relations between Washington State and China. There is a lot about doing business and investing in the United States which is simply not very well understood in China, said Borich.

This is what Palmer said he believes one of the reasons why a limited number of Chinese enterprises are now making direct investment in the United States—"a very complex process," he said, in comparison with companies in other countries such as Japan, Canada and Britain.

Data show currently the value of China's foreign direct investment (FDI) in the United States is moderate. The latest Chinese statistics available indicate China's FDI in the United States was $3.338 billion by 2009, out of the more than $200 billion of China's total outbound investment. By contrast, the United States invested more than $4 billion in China in 2010 alone.

That $2.3 billion figure shows an annual increase of 31 percent compared to China's investment position in the United States in 2003, which stood at $448 million.

Encouraged by China's "going-global" policy, Chinese investors are increasingly exploring opportunities in the United States—the world's largest FDI destination. Rebecca Blank, Under Secretary for Economic Affairs of the U.S. Department of Commerce, said since 2003 Chinese companies have announced plans to make direct investment in 136 U.S. Greenfield projects, which if all completed, will create $4.5 billion of investment in the U.S. economy.

"But there is room for significantly more investment from China in the United States," said Blank. Her department has inaugurated an Invest-in-America program to assist foreign investors seeking information about investing and investment opportunities in the United States.

Shanghai Vice Mayor Tu Guangshao, who led the Chinese delegation to Seattle, said greater number of Chinese companies are planning to "go global," and now there were very good opportunities.

"It's clear the United States welcomes investment from us," said Mayor Xu Liquan of Weifang, a city in east China's Shandong Province known for its annual International Kite Festival. About a dozen companies headquartered in his city have built research and development centers and sales offices in the United States, with a total investment of around $10 million. Not much now, but more will come, Xu said.

Wang Guozhong, Vice Mayor of Wuxi, Jiangsu Province, said he talked to several U.S. officials and business executives during the networking session of the meeting, and he will bring what he has learnt to the businesspeople in Wuxi, so that they can better understand the procedures and policies of doing business in the United States, and make better investments.

(Reporting from Seattle, Washington State)

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