China Daze

Jun 28, 2011

In many ways, the Toledo area just south of the border is more like Michigan than Ohio. It features an aging industrial city based on the automotive economy and suffering from its decline.

Beyond that are leafy suburbs, and then smaller towns, farms, and a significant agricultural sector. Yet there is one way in which Toledo is very different from us. The mayor and the chamber of commerce have been actively and aggressively courting China.

And their efforts are paying off. Earlier this year, the Chinese investment firm Dashing Pacific Group Ltd. bought a restaurant complex for more than $2 million dollars. Then this month, they paid the cash-strapped city even more to buy sixty-nine acres of land in what is known as the Marina District, along the Maumee River.

Dashing Pacific plans to build a $200 million dollar residential and commercial development there, and has taken an option to buy a decommissioned power plant and an additional twenty-two acres.

City officials are ecstatic over the jobs that the development is likely to create. Toledo Mayor Mike Bell is now planning his third trip to China, this time adding a stop in Japan.

“We are attempting to be very open for business for international investors, and that we are a city that has the qualities they are looking for and to invest in and may even want to live in,” the mayor told the Toledo Blade newspaper.

What the city is seeking to do is not any huge government projects, the mayor added, but to stimulate the private sector, quote. “because private sector companies support our tax base.

“When they are successful, we are successful.”

Yesterday, I hosted a half-hour discussion with business and government officials about doing business with China. One of the guests was Tom Watkins, Michigan’s former state schools superintendent. These days, he is a business and education consultant trying to build bridges between this country and China.

Why are the Chinese investing heavily in Toledo and not Michigan, I wanted to know. The answer is simple: We haven’t made the effort needed to make a deal.

Doing business in China, as in Japan,  is all about building relationships. Scott Prephan, a real estate developer in the Toledo area, told me he has been to China eighteen times.

“You don’t just call them on the phone and sell them something. That’s not how it works,” Prephan said. “They have to be comfortable with you.” In the case of Michigan, they don’t even know us.

Watkins noted that while former governor Jennifer Granholm was frequently running to Europe to try and court jobs, she never went to China, possibly because Michigan’s unions have been so dead set against the possibility of cheap, non-union labor.

Ignoring the world’s fastest-growing economy is worse than foolish. The Chinese have capital. A study by the Asia Society in New York indicates China could invest as much as two trillion worldwide in the next decade. It would be nice to have a good chunk of that here.

Think of the good a major development in Detroit could do.

I think that it’s about time that Governor Snyder and Detroit Mayor Bing go on a trip together --- perhaps the first of several.

And I’m not talking about golf.