Chinese foreign direct investments in the US and beyond: a closer look

Written by Aveek Sarker, Student Fellow at the Carl Vinson Institute of Government

As a Fellow this semester at the Carl Vinson Institute of Government's International Center, I have the rare opportunity to pick the brain of my faculty mentor, Rusty Brooks. His intellectual interests, much of which are concerned with the rise of China as this era's preeminent and rising economic superpower, align well with my own, as I have decided to investigate certain implications of Chinese foreign direct investments in the United States and across the world. 

The last decade has seen the rise of a new world power as China's unprecedented economic growth and development has radically altered the global landscape. One of the most significant trends that will largely influence the trajectory of the Sino-American relationship has just recently begun to materialize. 

China has started to take an increasingly proactive role in seeking to invest in ventures abroad through mergers, acquisitions and greenfield investments. If current patterns continue, more than $1 trillion of direct Chinese investment will flow worldwide by the year 2020, a significant share of which will be headed for advanced markets such as the U.S. How the U.S. responds to these flows will  not only serve to determine the future of its own economy, but more importantly will have considerable influence over the diplomatic relationship it seeks to establish with the world's fastest-growing economy. 

Anxieties and fears of strategic maneuvering certainly exist as China begins to move into American markets. It is upon these anxieties that I hope to further build upon my present analyses. As I continue investigating, I will interpret specific investment deals involving Chinese firms to assess the direct implications of their investments on a case-by-case basis. 

The case of the China National Offshore Oil Corporation (CNOOC) is of particular interest. Moving forward, I intend to make a comparative analysis between CNOOC's failed bid for Unocal, a California-based oil company in 2005, that was struck down my U.S. government, and compare it to the company's subsequent and successful acquisition of the Canadian shale oil and gas giant Nexgen just six years later. 

Why was one deal successful and the other wasn't? What changes were made in between? And how do these deals serve as case studies for future Chinese investments in the Americas?

These are just some of the questions that will be further explored in later posts. 

Students interested in state and local government can gain valuable experience and prepare for careers in public service through the Vinson Institute Fellows Program. This semester-long internship with the Carl Vinson Institute of Government introduces undergraduate students to the inner workings of state and local government, both in Georgia and abroad.

New Faculty Tour: The Auto Industry and Economic Development

Written by Mi Geum Chorzepa, assistant professor of civil engineering in UGA's College of Engineering. 

Early Wednesday morning, the New Faculty Tour visited the Kia Motors Manufacturing Georgia (KMMG) plant in West Point. The tour was arranged by Sean McMillan, director of economic development at UGA. As we drove into the site, I almost felt as though I was sitting in the conference room at the Georgia Power Resource Center. On Tuesday, Tommy Wade, senior civil engineer at Georgia Power, presented GIS-based site design and showed a virtual manufacturing building placed on a potential plot on Google Earth. Driving up, the building looked very similar to the 3D building model.

The tour started with a presentation by Kia employees. During the presentation, we learned that KMMG revitalized the West Point community and provided training and jobs to community residents. We also learned that they are growing in size - manufacturing more than 200,000 cars per year. We then started a guided tour of four assembly units. The first unit we visited was the stamping line, where the manufacturing process begins. Three models are mainly manufactured in this plant: the Sorento, Optima and Santa Fe. The welding shop was the next stop. It was, in my opinion, the most impressive stop. Approximately 300 welding robots put the body panels together, providing 2,200 welds per car.

And it wasn't just the technology that impressed the New Faculty. The safety and assurance programs in place were truly impressive. Moreover, the space was used very efficiently, fully utilizing the overhead compartments. The third stop was the paint shop. This shop cleans, conditions, Eco bathes and primes the metal bodies, and provides the final color coat. As we were walking to the last unit, the testing and quality assurance unit, we saw the cafeteria, fitness center, bank, medical center and learned about Kia's employee wellness programs and benefits. In the testing unit, it was amazing to witness the well-coordinated teamwork and safety and quality assurance programs. Kia's Georgia plant is capable of assembling a car in only one hour. It's hard to believe, but now we can testify to the speed!

It was touching to see the busy manufacturing lines and to be part of this vibrant community. As the nation struggles to find more jobs for its citizens, it is truly impressive that KMMG not only manages to stay in business but also successfully operates a manufacturing plant in the United States. Kia cars are not made until they have already been sold. As a part of the new engineering program at UGA, I realize our engineering students may also be able to provide the infrastructure and workforce that can attract more businesses like KMMG and make positive changes to Georgia cities and communities. Moreover, I strongly believe diverse research programs at UGA will bring more new business initiatives to Georgia. I look forward to visiting the plant again with our students.

New Faculty Tour: West Point to Ft. Benning

Written by Todd Carlisle, business consultant, University of Georgia Small Business Development Center

Today, our tour across Georgia took us to West Point and Fort Benning. In West Point, we learned how local government, economic development professionals, higher education, local landowners and one large company can transform a region and the state. This great change was the establishment of KIA in West Point. In touring the plant, it is evident that KIA is vested in its people, the community and growing in the state. The facility is on the cutting edge of automotive production; KIA employees more than 3,000 people and has a manufacturing capacity of 360,000 automobiles.

In Fort Benning, we were hosted by "The Black Hats" of the Airborne School, the expertise that mold and prepare the elite paratroopers of the Army. I will always place the mission first. I will never accept defeat. I will never quit. I will never leave a fallen comrade. This is the Warrior's Creed and a perfect testament to the atmosphere we experienced at Fort Benning. On our tour through the base museum, we saw memoribilia from all wars and conflicts in the past 200-plus years all the way through the second Iraq conflict. We also watched the Black Hats take soldiers through training exercises as they progress and strive to be part of the Airborne Creed.

New Faculty Tour: UGA and Economic Prosperity

Written by Mara Register, public service assistant in governmental training, education and development at the Carl Vinson Institute of Government.

The first full day of the New Faculty Tour was packed with community visits, presentations and collaborations that elevated my pride in my home state of Georgia. The morning began at Jaemor Farms in Alto, GA with an energetic presentation from Agriculture Commissioner Gary Black as he explained the significant contribution agriculture makes to the growing economy of our state. And then, from a vibrant family farm in Northeast Georgia, we traveled to the capital city of the South, Atlanta.

In Atlanta, we had the opportunity to visit the Centergy Center in Midtown for an impressive overview of the facility by key Georgia Power staff. This state-of-the-art economic recruitment center truly serves as the heart of past, present and future business recruitment and retention efforts in Georgia. It was an honor to hear from the new Georgia Department of Community Affairs Commissioner Gretchen Corbin. Numerous times she recognized the important role the Carl Vinson Institute of Government (CVIOG) plays in ensuring our local Georgia communities are prepared for economic recruitment and prosperity through our leadership training of elected officials and staff.

After lunch, CVIOG's Director Laura Meadows greeted us at the Capitol. Needless to say, I was so proud of Laura's incredible overview of CVIOG and the role we play in leadership training, education and technical assistance. She shared how our efforts help make government work better for the people of Georgia. We then heard from Lt. Governor Casey Cagle and Secretary of State Brian Kemp. Our visit to the Capitol ended with a brief tour of this grand symbol of government and democracy for our state.

Following a visit to the King Memorial site and a visit to the Terry College of Business and UGA Alumni Office in Atlanta, we had a wonderful dinner and networking opportunity with members of the Consular Corps, located in Atlanta. It was truly an impressive evening dining with dignitaries from Canada, France, Haiti, India, Great Britain and South Korea. Visiting with this group was like having a window into the world right at your dinner table.

At the end of this action-packed day, I have a much greater appreciation for the role UGA plays in the economic vitality of our state as it is positioned nationally and globally. I also gained a much greater understanding of our work at CVIOG and the significant role we play every day in our training and educational efforts setting the stage for effective leaders today and in the future.