Governor Rick Snyder of Michigan recently returned from a week long business investment trip to China. In an effort to promote international trade, Snyder continued his mission of increasing trade between Michigan and Asian countries. Snyder first embarked on this mission in 2011 and has made trips every year since. He has visited China, Japan and South Korea with a concentration on the automotive industry. He wishes to build a long term relationship to increase business investments.
Since Snyder’s first trip, these countries have invested $1 billion in the state of Michigan alone. These investments include direct investments into Michigan companies, trade agreements, and setting up satellite offices in the state. Chinese investments are particularly important because after Canada and Mexico, China is Michigan’s third largest exporting market. Exports to China have seen an 89% increase over the years as a result of Snyder’s efforts. A large number of Chinese companies conduct business in Michigan and have even set up their United States headquarters in Michigan.
Governor Snyder’s investment mission also plays another important role in addressing the US trade deficit. Automaker General Motors sells more cars in China than in the United States, thus a foreign country is disproportionately accounting for consumption growth in a domestic company. By enticing Chinese investors to spend within the US, Snyder is helping recapture lost value. His effort also leads to further exports to Asian countries, which will help balance the trade deficit.
With the United States economy improving and Detroit’s bankruptcy nearing its end, the pitch to Asian investors becomes even more appealing. This is especially true since Asia is experiencing decelerating growth, while Japan is now officially in a recession.
As a result of the trip, Chinese companies plan to invest around $140 million within the state and pledge to create hundreds of jobs. Nine Michigan companies accompanying Snyder also saw success striking deals, which will allow them to export their products to China.