Saturday, 22 September 2012

The Alabama connection

Alabama might at first sight seem to be a part of the United States which is not particularly close to China. Big Chinatowns are in San Francisco and New York. Most people in China think the United States consists of New York, Los Angeles and perhaps Texas. So why the current Chinese interest in Alabama?

The reason for the developing economic relationship between China and Alabama (and the rest of the South East US) is the surge in China's outward direct investment. In the 1990s and the early 2000s, manufacturing shifted to China to take advantage of low land and labor costs. In recent years, labor costs have risen dramatically in China and there has been a massive property boom that has pushed up land prices,  while the Chinese yuan has risen over 40% since 2005 after adjusting for inflation, so it is now increasingly profitable to move production to cheaper locations outside China. Land and labor costs are lower in the South East than other parts of the US, attracting Chinese companies more readily than more expensive locations further north.

Although you might not expect rugged individualists in the Deep South to have a similar outlook to the inhabitants of a "communist" country like China, there are similarities in outlook. For example, both communities place a strong value on the family and are noted for their hospitality. Nevertheless, it takes time and effort to develop mutual understanding. The Alabama China Partnership that is fostering the growth of Chinese investment in the state devotes serious attention also to cultural events that can help Chinese and Americans to get to know and understand each other. Both at this week's Economic Summit in Dothan and next week's ACP Fall Symposium in Monroeville, Chinese participants have a chance to taste local culture in the form of a performance of a play based on the novel "To Kill a Mocking Bird" and a loud blues band, Ruffwaters, while Alabamans hear traditional Chinese songs and see sand paintings by a Chinese member of Cirque du Soleil. Sitting next to me as I write this is Hunter Johnson, a composer from California who composes and produces music to accompany the sand painting, working closely with the painter to ensure that the music fits changes in her routine.