Georgia helps Shandong climb up the value chain

China's Shandong province, a wealthy coastal region with nearly 100 million people, contributes an outsized proportion to the nation's economy, but there's still room to move up the value chain with the help of US investors, Gov. Guo Shuqing said at an investment forum in Atlanta.

While Shandong accounts for 10 percent of Chinese output and is a leader in manufacturing, energy and food, its economy could use a healthier contribution from sectors like tourism, information technology and financial services, Guo said.

"We need to speed up the service industry," said Guo, who brought a delegation of leaders from 20-plus Shandong companies and organizations to meet with Georgia firms and officials this week.

The Oxford-educated leader, one of few Chinese provincial officials in recent years to address Georgians in English, called for a steady move toward clean-energy sources and welcomed American firms offering innovative technologies.

He also noted that the province would invest further in advanced equipment manufacturing, medicine and other sectors, while paying more attention to educational exchanges.

National economic reforms unveiled after the third plenum of the Central Committee of the Communist Party of China last year show the country's continued openness to foreign investment, building on the successful reform and opening up of 35 years ago, Guo said.

"This year is the year of reform," he said."We are going to open wider to the world."

And not in just one direction. Outbound investment from Shandong, which is home to the coastal city of Qingdao, climbed to about $4 billion last year, outpacing US investment in the province by about $100 million, the governor said.

The state of Georgia has already benefited from its ties with Shandong. Qingdao-based television and appliance manufacturerHisense Grouphas its US headquarters and a research center in Suwanee, an Atlanta suburb.

For Hisense, becoming "rooted" in communities where it operates has been integral to revenue growth. Sales in the US doubled from a year earlier as Hisense made strides with products breaking into major US retail outlets like Walmart, according to Lin Lan, vice-president for Hisense, who spoke at the seminar.

Shandong and Georgia have longstanding ties as part of the Regional Leaders Summit, a group of seven international states and provinces that meet every two years to share best practices.

Georgia's governor, Nathan Deal, traveled to Qingdao last August to open the state's new investment office in the Hisense Tower.Shandong Energy Group Chairman Bu Changsen's visit to the state revealed an array of charms.

Not only is it home to former US President Jimmy Carter, who presided over the normalization of relations with China, it's also the setting for Gone With the Wind, one of the most famous American novels, Bu told China Daily.

His company, a major coal producer with 200,000 employees worldwide, is looking to diversify its portfolio into shale gas and conventional oil, renewable energies, financial investments and coal-processing machinery.Georgia companies were effusive about the business environment they've found in Shandong over the last few years.AGCO Corp, a tractor and farm equipment manufacturer based in the Atlanta suburb of Duluth, purchased an 80 percent stake in Dafeng Machinery in 2011, taking over its combine manufacturing facility in the city of Yanzhou.

The Yanzhou factory is one of six opened or acquired by AGCO in China over the past three years to boost productivity in a country where a growing middle class is boosting food consumption, said Eric Raby, vice-president of global seeding and tillage at AGCO."Certainly the need for mechanization continues to grow, and that's where AGCO can really play a role in the Chinese market," Raby said.

"We introduce new technology to the market, but we also learn some very valuable lessons in the market that we can then apply in other markets around the world, so it is truly a two-way street. It's a symbiotic relationship," Raby said.

China's new Consul General in Houston, Li Qiangmin, said he hopes more companies will follow the lead of Shandong and Georgia."I'm confident that with the sustainable and pragmatic efforts of the state of Georgia and Shandong province we will achieve more fruitful results," he said.

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