The Los Angeles Times reports Chinese firms are bargain hunting in U.S.
Liu Keli… is investing $10 million in the Palmetto State, building a printing-plate factory that will open this fall and hire 120 workers. His main aim is to tap the large American market, but when his finance staff penciled out the costs, he was stunned to learn how they compared with those in China.
Liu spent about $500,000 for seven acres in Spartanburg — less than one-fourth what it would cost to buy the same amount of land in Dongguan, a city in southeast China where he runs three plants. U.S. electricity rates are about 75% lower, and in South Carolina, Liu doesn’t have to put up with frequent blackouts.
About the only major thing that’s more expensive in Spartanburg is labor. Liu is looking to offer $12 to $13 an hour there, versus about $2 an hour in Dongguan, not including room and board. But Liu expects to offset some of the higher labor costs with a payroll tax credit of $1,500 per employee from South Carolina.
The jobs are low-paying and the state will not get tax revenue – instead that money will stay in China. In just under two decades, the United States has been successfully transformed into a third world nation – unable to respond to natural disasters, collapsing bridges and deteriorating infrastructure, no health insurance, and corrupt elections and public officials. More environmental laws will be rolled back next. It never used to be like this in the U.S.
For years, investment between the U.S. and China flowed one way, with American firms spending billions in the Asian nation. But the Beijing government’s $5-billion stake in Morgan Stanley and $3-billion investment in the private equity firm Blackstone Group brought China’s overall investments in U.S. firms to $9.8 billion in 2007, up from $36 million the year before, according to Thomson Financial.
By comparison, U.S. investment in China was $2.6 billion last year, down from $3 billion in 2006, said China’s Ministry of Commerce.
China out-invested the U.S. last year by $7.2 billion. Or as Mei Xinyu, an economist at China’s Ministry of Commerce, reasoned of the depressed asset prices in a sluggish American economy: “They don’t want to miss this opportunity to bottom-fish in the U.S..” America – land of the bottom feeders.
Four at Four continues below the fold with DoJ v OSC, Guantánamo Briton, and why do they hate us?