A week before attending the first U.S.-China Governors Forum that took place in Salt Lake City, Utah, last weekend, Alabama Governor Robert Bentley told the 21st Century Business Herald in an exclusive interview that the U.S. State of Alabama welcomes and needs investments from China and Chinese businesses.

In an effort to draw those investments, policymakers in Alabama have recently passed a new bill to support foreign enterprises in the state.

According to the new bill, Alabama will provide non-U.S. enterprises investing in the state with subsidies to offset the pressures they face from Federal anti-dumping and anti-subsidy duties. Any non-U.S. business (excluding non-industrial sectors such as finance) with an investment project of more than $100 million and that creates at least 100 local jobs will receive tax reductions or exemptions from the state government.

The bill is the first of its kind in the U.S. and helped to attract a massive investment deal from Chinese copper manufacturer Henan Golden Dragon Precise Copper Tube Group, Inc.

In March, Golden Dragon signed an agreement with the Alabama government to build a $100 million-factory in local town Thomasville.

Governor Bentley said he has strong faith in the economic ties between China and the South (the 14 southern states in the U.S.), and that over the next 20 years, Chinese investment will serve as a new engine propelling Alabama’s economic growth.

21st Century Business Herald: The new bill is said to have been specifically created to attract Golden Dragon’s investment project. Is this normal practice, or do you take it as an exceptional move to boost foreign investment in Alabama?

Governor Bentley: The idea of the bill did start with Golden Dragon’s project, but ultimately it suits other companies facing challenges from anti-dumping or anti-subsidy duties when they decide to undertake investments in the U.S. So by passing the bill, Alabama has been able to help alleviate part of the risks those companies may face in our state.

21CBH: The bill requires local taxpayers’ money to be used to support foreign companies. Do they really accept this?

Bentley: In fact our people like this bill, since it helps to create job opportunities. The truth is, without those foreign investments, we’ll be receiving no new sources of tax nor creating new jobs. But the bill will help us attract foreign investment and therefore new sources of tax.

The thing is the tax reduction or exemption will only be granted to foreign businesses for a certain period of time.

21CBH: Do you have any strategies for the restructuring of Alabama’s industry in the future, and what kind of opportunities will there be for Chinese enterprises in the process?

Bentley: The restructuring of Alabama’s industry dates back to the 1990s, when the state decided to attract businesses from high-quality, high-income sectors, and it has had a lot of investment from foreign automakers. But I think our economy depends too much on sectors such as retail, and we need investment from other sectors to diversify our sources of growth in the restructuring process.

We’re now expecting more investment from aerospace, aviation and biotech businesses, and I particularly hope the development of our biotech sector will one day bring great products to the market. Actually, we also have a biotech industrial park within the state.

21CBH: Which sectors tend to be a better place for Chinese investments in Alabama?

Bentley: Well, I’d say that we’re very glad to have Golden Dragon here, and we will see if we can somehow attract Golden Dragon’s main clients, raw materials providers and the like, to come to our place too.

Alabama needs more jobs, especially well-paid jobs, and we hope to create those with the help of Chinese enterprises. I certainly believe Chinese automakers will also win by investing in Alabama.

I’m also expecting more cooperation between China and Alabama in biotech. As a former doctor myself, I have a strong interest in the biotech sector, and many Chinese enterprises are doing well in this sector.

21CBH: Most foreign investment in Alabama over the past two decades has come from Germany, Japan and South Korea. But what about the next 20 years, what role do you think Chinese investment will play?

Bentley: We welcome investment from China, the second-largest economy in the world. In the days of global economy, we need to do our best to erase trade and investment barriers [to facilitate cooperation] rather than working on our own.

21CBH: How did Alabama transform itself into an economy depending on value-added sectors such as automobile and aerospace from a resource-oriented economy depending mainly on mining, iron and steel? How has foreign investment contributed to this transformation?

Bentley: Like I said, Alabama started restructuring its industry in the 90s, and at the time the state was still heavily dependent on agriculture. We were kind of forced to restructure our economy in the face of the wave of bankruptcies among small farms that were being eliminated by bigger players’ mergers and acquisitions.

 When Mercedes-Benz was planning to build its first overseas plant in the U.S., a group from Alabama was able to persuade the German automaker to come to Alabama by creating a series of favorable policies from cash subsidies to workforce training.

Since then, more foreign automakers have come to Alabama including Japan’s Honda, which employs at least 4,500 workers in the state at present. Hyundai and Toyota also have plants in Alabama, and we also have a number of auto spare parts suppliers.

21CBH: America’s auto industry -- based primarily in Detroit, Michigan -- has been in decline for some years, yet the auto industry is growing in Alabama. Do you attribute this to foreign investment?

Bentley: We’ve a few key advantages in attracting investment from foreign automakers.

First and foremost the South differs from the North in our trade unions. Alabama is one of the 26 states in southern and northwestern U.S. where free employment is adopted, which means we don’t force our employees to join trade unions.

Alabama has also stated in its law that a trade union can only be established by a factory after receiving favorable votes from its employees anonymously. But in Michigan, the force of the trade unions is so huge that foreign investors normally won’t consider that destination. Mercedes-Benz wouldn’t admit it publicly, but I do think they put trade unions at the top of their list of considerations when choosing the site for their plant.

Secondly, we offer first-grade training via the AIDT -- the Alabama Industries Development Training program -- to local workers employed by foreign companies.

Furthermore, the cost of manufacturing in our state is relatively low, and we have low energy and market access costs as well. The state government takes an open-minded approach to foreign investors, and we are willing to pass regulations to assist their investments in the state; for instance, we’ve recently passed an employment bill to showcase our open attitude to global investors.

21CBH: With all these favorable policies, why hasn’t Alabama attracted any automakers from the northern states?

Bentley: Well, certain political factors are involved with regard to this matter; for example, the different attitudes to trade unions between the South and the North.

Here in the South we actually don’t encourage the establishment of any trade unions, and honestly, the influence of trade unions on America’s three auto giants -- General Motors, Ford and Chrysler -- has been rather huge; they don’t really want to build any factories in the South.

Source:Robert Bentley