China is eyeing Midwest for plant investments

Dependence on U.S. economy is a key to capital spending plans

By Tom Stundza -- Purchasing, 1/9/2008 10:27:00 AM

It's only a matter of time before the Chinese begin investing in Midwest manufacturing plants, much the way the Japanese began locating auto plants in the U.S. two decades ago. That’s the view of Paul Allaer, partner in the Cincinnati law firm of Thompson Hine and an expert in international mergers and acquisitions. He tells the Cincinnati Enquirer that Chinese officials told him repeatedly during a recent business trio there that there are planning to make U.S. investments.

"We need to be ready for (such investments),” he says, adding that “the Chinese are dependent on the U.S. economy; if there's a U.S. recession, there will be hundreds of thousands of jobs lost in China." Meanwhile, Biff Roberts, director of international sales and marketing for Senco Products, a Cincinnati manufacturer, tells the newspaper that China no longer has the raw materials cost advantage it once had. That's causing some companies, such as Senco, to move production back to North American and other lower-cost locations.