Chinese Investors Targeting Michigan

April 7, 2008
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GRAND RAPIDS — Representatives of six Chinese companies are visiting Michigan this week to check out potential investment opportunities as part of the Michigan Economic Development Corp.’s “reverse investment” mission with China. The sole purpose of the mission is to convince those visiting companies that they should concentrate their investment efforts in Michigan.

The delegation of 15 arrived in Detroit yesterday and will spend the week looking over companies and service providers in Detroit, Battle Creek, Jackson and Saginaw, said Harry Whalen, manager of international business development/new markets for the MEDC. He said one of the Chinese investors is a small OEM, one is a manufacturer of injection molding machinery that’s used by the automotive sector, one is involved in armrest, flocking and steering wheel assembly, another company makes steel wheels, exhaust systems, hot dip aluminum plates and tubing, and the sixth manufactures brake pads.

Whalen said the visiting investors are either looking to establish some type of a strategic business partnership or joint venture or they’re interested in outright acquisitions. This is actually the third delegation of Chinese investors to visit Michigan this month, Whalen noted. Another group is slated to arrive April 20.

The investors here this week will visit 62 Michigan companies and service providers, such as industrial reps, developers, banks, law firms and freight forwarders. Three people from the MEDC’s Shanghai office will be on hand for the event, as will representatives of The Right Place and other regional economic development organizations in Michigan. The group will be in Detroit today, in Jackson and Battle Creek on Tuesday, in the Saginaw area on Wednesday, and back in Detroit on Thursday and Friday. Whalen said some Grand Rapids companies are going to join the group tomorrow in Battle Creek.  

The six companies visiting are what Whalen calls “investment ready.” MEDC representatives have had repeated contact with these companies the last four years on MEDC investment trips to China.

“These are six that have risen to the top,” Whalen said. “They are coming here to explore the market. The Michigan companies have never met these Chinese companies. We’re matchmaking: We’re taking these Chinese companies and introducing them to Michigan companies and contacts with the expectation that some kind of business venture will develop from those introductions.”

The Chinese investors pay their own air travel, accommodations and food on these trips. The fact that they foot the bill to come here shows the seriousness of their intentions, Whalen observed.

The Chinese have the money and the wherewithal to look at markets around the world, and they have a high interest in mergers and acquisition, Whalen said. For foreign companies, acquisitions are an easy entry method into the North American market, because the acquired company has an established management team, sales force, distribution network and so on, he explained. 

“With the number of companies in Michigan that are experiencing difficulty, this is an opportunity for one partner to bring technology and the other to bring capital to the table,” he remarked. “There are opportunities for business exchange and cash flow exchange. The Chinese are looking to come here and grow, and it’s going to create opportunities for Michigan companies.”

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