Tuesday, December 31, 2013

In Blue-Collar Ohio, a Windfall of Chinese Investments

So Toledo turned to China to make the 360 panels, 1,300 pounds each, needed for an extension to the Toledo Museum of Art. Some here resented the move after China supplanted the United States as the world’s top glass producer. But in the process, city leaders began an improbable and remarkable relationship.

Over the past seven years, the ties between Toledo and China have grown numerous. Chinese companies have paid more than $10 million in cash for two local hotels, a restaurant complex and a 69-acre waterfront property. Mayor Michael P. Bell has taken four trips to China in four years in search of investors. His business cards are double-sided, in English and Chinese.

Huaqiao University, one of the largest higher-education institutions in China, recently signed an agreement to open a branch in Toledo. There have also been preliminary talks between local officials and a Chinese company about an arrangement in which industrial tools would be produced in China, shipped for assembly in Toledo and labeled “made in the U.S.A.,” which would allow them to be sold at a premium.

Toledo has also reached a deal for rarely seen Chinese antiques to be shown at the museum next year, and there are plans for the city to host a Chinese technology trade fair at its convention center. In all, more than 100 Toledo business people have traveled to China in recent years, and hundreds of Chinese investors have been welcomed in return, treated to special performances by members of the Toledo Symphony Orchestra.

“For little old Podunk, Ohio, it’s been pretty phenomenal what we’ve been able to do,” said Dean Monske, president and chief executive of the Regional Growth Partnership, a local economic development group.

Toledo is hardly the only American city to make common cause with China.

Chinese companies made $12.2 billion in direct investments in the United States during the first nine months of 2013. That is up from $7.1 billion in all of 2012, which was itself a record at the time, according to the Rhodium Group, a New York-based consulting company. Chinese investors have been buying commercial and residential real estate in Detroit, inexpensively because of the city’s financial troubles, and have agreed to finance a $1.5 billion waterfront development in Oakland, Calif. Earlier this year, on a trade trip to China, Gov. Jerry Brown of California discussed Chinese investment in the state’s troubled $91 billion bullet train project.

Oklahoma, South Dakota and Tennessee have also increased their push for Chinese investment.

But Toledo, a largely blue-collar city of about 280,000, appears to be punching well above its weight at a time when mayors from Philadelphia to San Francisco are returning from China empty-handed.

“They looked on a map, figured out where we were sitting and saw the benefit,” said Mayor Bell, a gregarious former University of Toledo defensive lineman, referring to Toledo’s location near a number of large cities in the United States and Canada. “They could see that this town needed to be helped a little bit and that it could be on the upswing — that there was potential, that they could do something, that it could be incredible and it would not probably take a whole lot to do.”

After their initial approaches — “Nobody had heard of Toledo,” Mr. Bell said — the city’s government and business leaders began pitching the feng shui of Toledo, where wind meets water. The city is a major transit hub, crossed by railways and highways, and has the busiest general cargo port in the Great Lakes region. Housing is affordable, and the abandoned factories, including those where windows, bottles and windshields were once made and shipped around the world, mean there is plenty of space.

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