Firm's US arm fits mainland strategy
Haier's operation in the US sits well with the mainland's strategy of expanding investment in the US, says Tarun Khanna of the Harvard Business School. 'It is a company with a proven track record in China. Also, it has been tested against the world's best multinationals and has done fine.
'It's a company with some real strength so it's a good one to spearhead Chinese expansion. And it avoids politically more volatile situations that have run into trouble, like buying oil or energy assets.'
The professor believes Haier 'will force western companies to take Chinese capabilities more seriously, much as happened after Japanese and Korean activity in the US, and in software, with Indian companies.'
David Parks, president of Haier's refrigerator arm in Camden, South Carolina, said Haier had shown that a mainland company can establish a successful business in the US, and that 'you can have Americans interact in the business under Chinese leadership', something which could encourage other mainland companies to be more open to exploring opportunities there.
'It is very concerning to someone to open an operation 5,000 miles [8,000km] away in a different culture, so there has to be some degree of trust and understanding of the capabilities,' Mr Parks said.
He hoped there would be more direct foreign investment from the mainland in the US.
But not many mainland companies have followed Haier since it set up operations in the US eight years ago.
Nicholas Lardy, an economist at the Peter G. Peterson Institute for International Economics in Washington, said: 'It's hard to find other significant Chinese manufacturing operations in the United States. I think eventually there will be more Chinese companies, but up to the moment I think Haier is in a league of its own.'
Analysts say that the reasons for the slow mainland investment in the US are the fairly low manufacturing costs in China, the preference among mainland companies to compete in the home market first, and perhaps the 'dampening effect' of China National Offshore Oil Corp's ill-fated attempt to buy American energy firm Unocal.
Dr Lardy says the central government is increasing its outbound investment, but most is going into natural resources in places like Africa and Latin America.
Even though it is possible that more Chinese investment will come to the US, Dr Lardy said the tension over the huge trade imbalance between the two countries is not likely to change much.
But Martin Roth, executive director of the international MBA programme at the University of South Carolina, said the more such investment and job creation occurs, the sooner the growth in the trade imbalance can slow.
