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Saying China is one of the few countries today where manufacturing companies are seeking new locations around the world, Danville city officials on Tuesday outlined the effort to recruit those companies to the area.
The presentation on the city’s “China Strategy” was made before of group nearly 100 local business and education leaders at a breakfast held by the Danville Pittsylvania County Chamber of Commerce at the Institute for Advanced Learning and Research.
“Our ambition is nothing less than to transform Danville’s old textile- and tobacco-based economy – where jobs were plentiful but have been lost to globalization – into a new regional economy that is modern, forward-focused, diversified and entrepreneurial,” City Manager Joe King said.
King said the strategy involves a team effort that includes not only city economic development staff, other municipal departments and City Council, but also the Chamber of Commerce, Pittsylvania County, Danville Regional Foundation and the Commonwealth of Virginia.
“It’s a very good thing that we have this strong team because we’re facing a daunting challenge.”
King explained that Danville has suffered the same experience of many old, isolated factory cities scattered across America’s East and Midwest. “We’re all mill towns that have lost our mills and the prosperity they once generated.”
As Danville lost its industrial base, the city lost 10,000 jobs and 20 percent of its population. Its unemployment and poverty rates soared.
“We take seriously our responsibility to rebuild this economy,” King said. “We are, however, facing stiff competition from thousands of other cities, towns and counties. And the game is constantly changing. What worked a few years ago, won’t work now. What works now probably won’t work in the future. We’re following hockey great Wayne Gretzky’s advice to ‘skate to where the puck is going to be, not where it has been.’”
King said manufacturing is once again going strong in America, but it is not because U.S. companies are opening new facilities in new places. “In fact, we are seeing retrenchment from U.S. companies, and from European companies,” King said.
China, he said, “is where the puck is headed,” King said. “We need your awareness, understanding and support in this team effort.”
Although the “China Strategy” is only one piece of the city’s economic development effort to reestablish Danville as a community of economic opportunity, King said Danville should establish itself as the premier East Coast center of Chinese industry.
“Rather than those familiar ‘Made in China’ labels, we’d like to see labels that say, ‘Made by a Chinese company in Danville, Virginia,’” he said.
Other communities, King acknowledges, have the same idea. According to a recent story in The Economist magazine, five years ago an American municipal delegation touched down in China every two months on an industrial recruiting trip. By last year, the average was one delegation every 10 days. By last month, it was once every three days.
“We’ve sent Jeremy Stratton (director of the Danville Office of Economic Development) to China five times, and he and a group from here likely will go again three months from now,” King said. “These trips are time-consuming, expensive and exhausting. They need to be undertaken smartly.”
The potential return, however, is great.
“China is the largest manufacturing economy in the world,” King said. “After decades of U.S. business investment in China, some Chinese companies are now buying American companies, entering into partnerships, investing in businesses, and expanding their operations into existing or new facilities here.”
King said the Danville community should not fear foreign investment. Already, 11 companies headquartered in 10 foreign nations provide jobs in Danville, including GOK International, Danville’s first Chinese company. Danville also recently announced the arrival of a second Chinese company, Zeyuan Flooring.
“Chinese manufacturers are investing in the U.S. for the same reason as any,” King said. “They are trying to improve profits. They want to avoid tariffs, reduce transportation costs and increase productivity.”
King said Danville has seen a steady stream of Chinese business representatives visiting over the last several months.
He said the city markets its strengths, one of which is location. “Danville is less than 200 miles from the Port of Virginia and is within a day’s truck drive to 60 percent of America’s population. That is a real advantage for manufacturers of consumer goods.”
Another strength is the city’s small size.
“With more than 160 cities in China with million-plus populations, we recognize that Danville is small by China’s standards,” King said. “However, in many ways, small is good. We take it personal. We care. A company is not just another prospect. We’re energetic. We’re hungry.”
The city has developed tools to overcome the cultural, legal and operational differences between Chinese and American businesses.
King and Stratton talked about the importance that the Chinese place on personal relationships. Mutual trust and camaraderie play a greater role in reaching business agreements with the Chinese than they do in American interactions, they said.
Once those agreements are in place, the city must identify special needs of Chinese industrial recruits and either provide services directly or procure them from others. Help may be needed to acquire travel and work visas, deal with legal issues, hire and train employees, comply with environmental regulations, and practice good corporate citizenship.
King said attention also must be given to preparing the community to welcome new arrivals from China. “We need to do what we can to be as ‘Chinese friendly’ as possible,” he said.
That effort will require overcoming any mixed emotions regarding the prospect of Chinese-owned companies coming to Danville.
“Just as with any industry, we are only recruiting good Chinese companies,” King said. “We want Chinese businesses that provide good family wage jobs and make significant investments in plant and equipment – companies with good environmental, workforce and corporate citizenship track records.”
King asked for the assistance of business and education leaders in the community to develop and implement programs and events to achieve adequate cultural competency to interact effectively and appropriately with Chinese counterparts.