China to Build Cities and Economic Zones in Michigan and Idaho

China's meteoric rise has caused much concern in the United States due to its dominating presence in Asia. China has territorial claims in the South China Sea and the South Asian region, and is establishing substantial economic and infrastructural inroads with countries such as Myanmar that have long been neglected by the West.  

Now Chinese companies and businessmen are planning to make their home in the United States.  The mainland Chinese company Sino-Michigan Properties LLC has paid $1.9 million for 200 acres of undeveloped land in Milan, Michigan.  

Currently a city of 6,000 residents, Milan could be the site of a "415-unit housing complex complete with artificial lakes and up to 6,000 square-foot homes, as well as a cultural center" for mainland Chinese. The location is about a 40-minute commute to the industrial centers of Toledo and Detroit, and less than half an hour from the University of Michigan in Ann Arbor (a hub for international Chinese students).    

This "Chinese city" has undoubtedly contributed to local concerns over the uncertainty of allowing such a high concentration of Chinese immigrants who may not integrate with the community and possibly bring a slice of Communist rule onto American soil.  

Mayor Mike Bell of Toledo, Ohio, does not seem fazed by this potential political encroachment.  Instead, he has embraced Chinese investors from the Dashing Pacific Group, who have already purchased the Docks restaurant complex and offered $3.8 million to purchase 69 acres of the Marina District for residential and commercial development.  

Mayor Bell had been on a nine-day trip in China discussing these deals when he made the announcement. As if anticipating concerns back home, Bell reassured that “[t]hese are not folks who are coming to Toledo to do a business deal, generate profits, and bring the money back to China. They are interested in investing in our community and being a part of the community beyond just investing in property.”

And generating profits is certainly at the heart of these developments. Instead of U.S. companies solely going to China to develop, Chinese companies are now eager to build in the United States. This trend reversal is seen in the ambition of companies such as China National Machinery Industry Corp (also known as Sinomach), China's third largest contractor with projects in over 130 countries. 

Sinomach is one of the many companies that have expressed an interest in developing a 10,000 to 30,000-acre technology zone for "reinvigoration of the American industrial base." The company proposes to establish a special economic zone like Shenzhen where there would be preferential policies conducive to Chinese businesses such as tax incentives and easing of trade regulations. The Michigan and Idaho projects are still in their preliminary stages and have yet to be approved. 

In a more successful maneuver, the state-owned China National Offshore Oil Corporation's (CNOOC) $2.2 billion investment in U.S.-owned Chesapeake Energy is the largest purchase of an interest in U.S. energy assets. 

This is not the first time that CNOOC tried to make its foray into the U.S. market. In 2005, political opposition over CNOOC's bid of California-based Unocal led the company to withdraw its $18.4 billion offer.  

Now, a faltering U.S. economic climate has resulted in less resistance to the influx of Chinese capital. And the possibility of creating 20,000 local jobs in South Texas doesn't hurt, either.  Instead of taking these local jobs, the Chinese energy giant is interested in "gaining technical insight" so they can use the technology to extract "gas and oil locked in [China's] plentiful shale formations." 

The United States has displayed increasing caution as China increases its economic power and military strength. A study co-authored by Wang Jisi and Kenneth Lieberthal observes that mutual distrust between both governments is deeper than previously imagined.  

Wang Jisi, whose unique position as an advisor to the Chinese Communist Party has generated a rare insider's look into the Chinese position that cuts through the usual official talk, observes a change in the Chinese character.  

He writes that Chinese leadership "believes that China's turn in the world has arrived" and that "keeping a low profile" is over. "It is now a question of how many years, rather than how many decades, before China replaces the United States as the largest economy in the world." 

Lieberthal of Brookings writes that findings from American intelligence indicate that top Chinese officials have assumed a zero-sum approach when discussing issues related to the two countries' relations, in which China or the U.S. would emerge as the victor with little possibility of co-existence in the top spot. This language suggests that China's growing sense of distrust towards the U.S. risks breaking into open conflict if these antagonistic feelings are not reconciled.

However, these political problems have not hindered Chinese business interests in the U.S. The allure of America's business and industrial climate has drawn Chinese investors and developers who are, among other reasons, avoiding exorbitant real-estate prices in China's metropolitan areas.  Exactly why Milan and the other places are being chosen has been largely left to local speculation.  

Whether the Chinese government or businessmen have other agenda besides economic development remains to be seen, but for the time being, there are American states and towns willing to embrace an influx of capital, regardless of where it's from. Because as Idaho's Lieutenant Governor Brad Little says, “Asia’s where the money is.”