Karen Shen, Washington state's trade development representative in Shanghai since 2000, used to focus on promoting exports of Washington-made goods and produce. Now she's helping the state's companies and officials hook up with Chinese investors. Tech companies in China are keen to buy or launch businesses near Redmond-based Microsoft, she said.
In February a Beijing company, ISoftStone Information Service Corp., went to a Seattle suburb and bought a small technology research and design firm, Akona Consulting. For ISoftStone, a leading outsourcing firm in China, the acquisition was a way to stay ahead of Chinese rivals. For Akona, the tie-up was a way to grow faster.
Chinese manufacturers, particularly those that import parts or raw materials from the U.S., are also looking at setting up assembly operations in Washington. They would save on shipping costs, Shen said. What's more, land, labor and business-operating costs are soaring in China.
Shen said the president of a Shanghai machinery maker told her that opening a plant in eastern Washington might be more economical than expanding in Shanghai's free-trade zone.
"The president told me the assembly line [capability] and quality would be much higher" in the U.S., she said, adding that he hadn't made a final decision.
More than 30 states in the U.S. have staff members or representatives in China, according to the Council of American States in China. With the U.S. economy slumping and unemployment rising, even some tough critics of China and outsourcing are courting Chinese money.
In March, a Missouri delegation included the governor, two U.S. senators, the mayor of St. Louis and two dozen other officials and businesspeople. Their aim: to get Air China and Chinese officials to back Missouri's bid to create an air-freight hub in St. Louis.
California's efforts to attract Chinese investment have been more hodgepodge. Gov. Arnold Schwarzenegger came on a trade mission in 2005, and state legislators and city governments have visited from time to time to promote California products. Sacramento has no permanent trade office in China.
Nevertheless, the state's proximity to China, diverse economy and large ethnic Chinese population are a big draw for many businesses in China. In one of the deals last year, China Minsheng Banking Corp. agreed to spend as much as $317 million to buy 9.9% of United Commercial Bank of San Francisco, which serves the Chinese American community.
