For the residents of Blaine, interacting with internationals is nothing new. An international thoroughfare, the city sees thousands of passersby each week as folks cross the border to buy groceries, gas and do business within the U.S.
But, according to city manager Gary Tomsic, those business transactions can be fraught with missteps if cultural differences are not addressed and understood, particularly when dealing with Chinese investors, who have their own way of doing things.
On May 15, the city invited James Palmer, economic development manager for the Washington Department of Commerce, to give a presentation to help city officials take a closer look at the nuances involved in working with Chinese investors. Tomsic and city planner Michael Jones organized the presentation at the Blaine Boating Center.
“Chinese investors from the lower mainland are a primary source of land development,” Tomsic said at a March city council meeting. “We’re seeing more Chinese investors than anyone else, but there are some unique cultural things that we need to be aware of in order to work well with them. It’s a real opportunity for us to learn and do a better job at creating an environment that makes investors feel comfortable and welcome.”
Palmer has spent years living in the Republic of China in Taiwan, holds an MBA from the Republic of China’s top business school, speaks Chinese fluently and specializes in attracting foreign direct investment (FDI) from China to Washington. He shared insights into Chinese investment trends and cultural differences with local administrators and business owners.
“The local government’s primary role should be to help Chinese investors understand the processes and the steps required for investment in our area,” Palmer said. “Our system is unfamiliar to them, and the local government is always the first place they’ll go for information.”
Part of Palmer’s presentation outlined the recent trends in Chinese FDI. While the central government has largely been focused on gaining mineral assets (coal, oil etc.) in places like Africa, Australia and South America, Palmer said private investors are increasingly eyeing distressed properties in the United States.
“The U.S. is having a garage sale,” Palmer said. “Chinese investors are really focused on picking up foreclosures, bankruptcies and things like that. They’ve seen that things are on sale in America, so now’s the time to pick up these assets.”
One of the cultural differences Palmer pointed out is in the speed of investment. He said Chinese investors typically operate on a longer timetable than American investors are used to.
“The Chinese are patient investors,” he said. “They stay in it for the long play.” That long-term approach was part of the take-away for Jones.
“There is a tremendous opportunity for economic development by looking at foreign investors, but these are long-term investments that need focused energy and long-range planning,” he said.
“Just because something doesn’t happen in a year doesn’t mean it won’t happen further down the road.”
Palmer also handed out USB drives loaded with a program called “Doing business in Washington: A guide to foreign investment.”
The program contained resources for overcoming language and cultural barriers when doing business with Chinese investors.
“It has a tremendous amount of information,” said Jones. “I think it could be very useful in the future, but we haven’t had occasion to use it yet.”