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Tenn attracts Chinese firms and investment

By Shangguan Zhoudong (Chinadaily.com.cn)
Updated: 2008-08-28 18:17

Tennessee state in the southeastern United States, a large business development center in the country, that is globally known for its automotive, logistics, agricultural, husbandry and healthcare management industries, is becoming an attractive destination for Chinese firms and investment.

The world's leading automaker Volkswagen and auto parts giant Denso recently strengthened its manufacturing presence in Tennessee. General Motors and Nissan have set up assembly facilities in the state in the past. Recently, Japanese automobile tycoon Nissan moved its regional headquarters for the United States, Canada and Mexico to the state of Tennessee.

As for Chinese firms, Tennessee seems to be a relatively unknown place compared to New York, California and Washington, DC.

In recent years, many US states have established their representative offices or business centers in China to attract investment. With many advantageous industries, Tennessee also founded a trade center in China last October, offering information to Chinese companies interested in entering the US market and for Tennessee companies trying to attract new customers in China (www.tn-china.cn).

The new trade center in China is the fourth international office for Tennessee, joining locations in Dusseldorf, Germany; Yokohama, Japan; and Toronto that are managed by the Tennessee Department of Economic Development. Tennessee is the 28th US state to open an office in China.

The trade center in China serves as a bridge between China and Tennessee for business and investment communication. It will also bring more and more cooperation opportunities and offer more information about the state for Chinese companies who want to do business in Tennessee.

China is Tennessee's third largest trading partner, behind Canada and Mexico. In 2006, companies in the state exported $1.8 billion worth of goods and services to China, accounting for 7.4 percent of the state's total export volume. Tennessee's primary exports to China are agricultural crops like cotton and soybeans, industrial machinery, automotive parts, scrap metal and paper.

In addition, FedEx, with its headquarters in the state, has won tremendous success in the Chinese market. Currently, more than 200 of the world's top 500 firms have operations in the state.

Tennessee's borders are within one day's delivery of 76 percent of the major United States markets, making it a convenient location for distribution and regional logistic centers. Currently Tennessee has more than 10,000 distribution centers located throughout the state. Tennessee's biggest city, Memphis, is home to Fedex's world headquarters and the world's busiest cargo airport.

Tennessee, the world center of healthcare management and medical innovation, is attractive to Chinese firms who want to improve their management and product quality. China is expected to cooperate more with the state in this sector.

During state governor Phil Bredesen's visit to China last year, China and Tennessee signed a letter of intent to bring Chinese health officials to learn about Tennessee's health care system.

In 2007, Fushi International Inc, the largest domestic manufacturer and supplier of bimetallic composite products in China, finalized the purchase of American market leader Copperweld Bimetallics LLC, located in Fayetteville, Tennessee.

Favorable Policies

Tennessee has no individual income tax or sales tax on industrial equipment and offers one of the lowest per-capita tax burdens and lowest overall utility in the US.

Tennessee's manufacturers are allowed an investment tax credit of 1 percent to 10 percent on the purchase, installation and repairs of qualified industrial machinery. Tennessee also allows a tax credit of $2,000 or $4,500 (in economically distressed counties) for businesses with a minimum of 25 jobs and $500,000 in capital investment.