PINE HILL: Burdened with Alabama’s highest unemployment rate, long abandoned by textile mills and furniture plants, Wilcox County desperately needs jobs. They’re coming, and from a most unlikely place: Henan Province, China, 7,600 miles away.

Henan’s Golden Dragon Precise Copper Tube Group opened a plant here last month. It will employ more than 300 in a county known less for job opportunities than for lakes filled with bass, pine forests rich with wild turkey and boar and muddy roads best negotiated in four-wheel-drive trucks.

“Jobs that pay $15 an hour are few and far between,” says Dottie Gaston, an official in nearby Thomasville.What’s happening in Pine Hill is starting to happen across America. After decades of siphoning jobs from the US, China is creating some.

Chinese companies invested a record $14 billion in the US last year, according to the Rhodium Group research firm. Collectively, they employ more than 70,000 Americans, up from virtually none a decade ago.

Powerful forces — narrowing wage gaps, tumbling US energy prices, the vagaries of currency markets — are pulling Chinese companies across the Pacific. Mayors and economic development officials have lined up to welcome Chinese investors.

Southern states, touting low labour and land costs, have been especially aggressive. In the case of the Pine Hill plant, tax breaks, some Southern hospitality and a tray of home-made banana pudding helped, too. “Get off the plane and the mayor is waiting for you,” says Hong Kong billionaire Ronnie Chan.

In March, Dothan, Alabama, held a two-day US-China manufacturing symposium, drawing dozens of potential Chinese investors. On sale were T-shirts reading: “Ni hao, y’all” — combining the Chinese version of “hello” with a colloquial Southernism. Chinese executives wandered around during a street festival, experiencing Americana by snapping photos of vintage ‘60s muscle cars.

A Chinese company, in a deal negotiated before the symposium, announced it would bring a 3D printing operation to Dothan. Among other Chinese projects in the United States that are creating jobs: in Moraine, Ohio, Chinese glassmaker Fuyao Glass Industry Group Company is taking over a plant that General Motors abandoned in 2008 and creating at least 800 jobs. In Gregory, Texas, Tianjin Pipe is investing over $1 billion in a factory that makes pipes for oil and gas drillers.

The United States and China have long maintained a lop-sided relationship: China makes things. America buys them. The US trade deficit in goods with China last year hit a record $318 billion. And for three decades, numerous US manufacturers have moved operations to China. The flow is at least starting to move the other way.

One reason is that in the past decade, the cost of labour, adjusted for productivity gains, has surged 187 per cent at Chinese factories, compared with just 27 per cent in the United States, according to Boston Consulting Group. In addition, Chinese electricity costs rose 66 per cent, more than twice the United States’ increase.

And the value of China’s currency has risen more than 30 per cent against the US dollar over the past decade. The higher yuan has raised the cost of Chinese goods sold abroad and, conversely, made US goods more affordable in China.

Those rising costs have cut China’s competitive edge. In 2004, manufacturing cost 14 per cent less in China than in the United States; that advantage has narrowed to five per cent. If the trend toward higher wages, energy costs and a higher currency continues, Boston Consulting predicts, US manufacturing will be less expensive than China’s by 2018.

Sometimes, political pressure nudges Chinese firms into investing in America. Tianjin Pipe, for instance, began building its Texas plant after the US imposed sanctions against Chinese-made pipes in 2010, notes Thilo Hanemann, Rhodium’s research director.

Local officials here in southwestern Alabama went out of their way to lure Golden Dragon, which wanted to build a plant to make copper tubing for air conditioners. At first, the company considered Thomasville, just across the border in Clarke County. But Thomasville didn’t have any suitable sites after Golden Dragon decided it needed three times as much space as originally sought. “I was almost in a panic,” recalls Thomasville Mayor Sheldon Day. But Day spotted an industrial park in Wilcox County with plenty of space. Day says he didn’t mind the project going to a neighbouring county. The plant would employ Thomasville residents, too.

Local officials assembled all the public agencies and utilities Golden Dragon will have to deal with — from Alabama Power to the Port of Mobile — in one room on one day so company executives could have their questions answered at once. A banquet was organised with both traditional Southern fare and Chinese dishes from Thomasville’s New China Buffet restaurant.

To prepare for future banquets, Thomasville is buying Chinese-style dining tables with built-in turntables. Still, culture and language can remain a barrier. Local officials hastily replaced a black-and-white banner welcoming Golden Dragon after learning that the colours signified a funeral to the Chinese. “Nobody wants a faux pas,” says John Clyde Riggs, executive director of a regional planning commission.

John Ling, who runs South Carolina’s Shanghai office, has an empty factory he’s pitching to Chinese firms. It’s been shuttered for four years — since the former owners closed it and moved the jobs to China. “We will see more and more Chinese projects coming,” Ling says. “It’s at the very beginning.”—AP

Published in Dawn, June 24th, 2014