Chinese incubator coveted; Georgia is a contender: U.S. investment of $360 million could bring 4,000 jobs at startups

The dignitaries --- politicians, business and government officials from Georgia and China --- gathered at the Canton House restaurant on Buford Highway to honor Feng Hao, a Beijing businessman with a tantalizing proposal.

ChinaMex, Hao's company, wants to open a business "incubator" for hundreds of Chinese companies keen to tap the burgeoning Americas-wide market. Talk of 4,000 jobs and dozens of factories circling Atlanta interrupted mouthfuls of stir-fried lobster and soft crab claws.

Hao could invest $360 million. He seeks a similar amount from U.S. partners.

The Sept. 19 dinner let out of the bag one of Atlanta's worst-kept recruitment secrets. Unlike announcements earlier this year of significant Chinese investments, ChinaMex's upside boggles the imagination.

"This is a big deal," said Eric Tanenblatt, senior managing director for McKenna, Long & Aldridge, the Atlanta law firm representing ChinaMex Americas LLC. "Georgia's business community has been working steadfastly over the past several years to raise our global profile. The ChinaMex decision to locate in Georgia [could] serve as a barometer of success."

Nothing, though, is etched in concrete. Competition is fierce from Asia-friendly San Francisco. The $360 million needed from this side of the Pacific Ocean isn't in the bag. And Hao cautions that an incubator --- where startup companies rent space in exchange for development, marketing and sales expertise --- won't necessarily transform Atlanta into Shanghai on the Chattahoochee.

"I feel confident that Georgia is an ideal location for our pilot program, which will facilitate Chinese companies who seek to develop, expand and create joint ventures in North and South America," Hao said in a statement released Friday.

California officials did not return phone calls Friday or said they were unaware of ChinaMex.

Georgia is on a China roll with the recruitment of two major manufacturers to the south Atlanta area since May. General Protecht will cobble together electrical components at a factory in Barnesville. Sany Heavy Industry will assemble construction equipment in Peachtree City. More is expected.

The Communist government, flush with $1 trillion in foreign exchange reserves and pilloried for this year's $103 billion trade surplus with the United States, looks increasingly overseas for investments.

"It's a good time to invest because the dollar is weaker," said Lani Wong, who leads the Atlanta chapter of the National Association of Chinese-Americans, which organized the dinner. "ChinaMex should be able to have a good return on their investment."

Atlanta recruiters look enviously at ChinaMex's explosive overseas growth the past few years. In 2004, ChinaMex Mart --- a half-mile-long, dragon-shaped agglomeration of showrooms, offices, research stations, restaurants and more for traders and entrepreneurs --- opened in Dubai. Chinese textile, food, electrical and home-furnishing companies target the Middle Eastern market.

In May, ChinaMex said it would transform an old British textile mill into a manufacturing/research and development hub.

Last month, the company joined with ING Real Estate and the airport in Amsterdam, Netherlands, to build a trade and exhibition center. More than 1,000 Chinese companies could rent space from ChinaMex in the Netherlands with hopes of tackling European markets.

"What they're doing in Dubai and Europe is really to serve as an entry point --- almost like a specialized port," said Charles Whatley, director of commerce and entrepreneurship for the Atlanta Development Authority. "ChinaMex gives a Chinese company of whatever size the opportunity to plug into a network, cut initial overhead costs and really explore a market with very little risk."

ChinaMex is searching for office space in Atlanta for its beachhead into the Americas. Between 30 and 50 Chinese companies, each with maybe a few employees, could set up shop by March, Hao said.

By next year's end, 100 companies could locate here. The incubator will provide logistical, marketing, administrative and other support. Unlike Dubai and Amsterdam, though, no permanent exhibition space is planned for the pilot project.

"The immediate task before us is to determine whether Georgia presents the greatest opportunity for the companies to succeed," Mitch Sepaniak, CEO of ChinaMex Americas LLC, said in a statement released Friday.

Maybe 1,500 Chinese companies could one day call Atlanta home. ChinaMex plans to eventually build an office, residential, cultural, retail and hospitality complex to further help its companies grow, Hao said.

ChinaMex "is good news for building a base of small businesses and new jobs," said Bob Cucchi, economic development point man for Lt. Gov. Casey Cagle. "We know that the big guys are always going to be here, but we don't know that they'll continue to create new jobs."

U.S. Sens. Saxby Chambliss and Johnny Isakson, Gov. Sonny Perdue and Atlanta Mayor Shirley Franklin met Hao in September. The city and state will likely offer tax and other incentives, Whatley and others said, but nothing has been finalized.

ChinaMex has the blessing of the government's Ministry of Commerce --- critical support that will help steer businesses from across China to Atlanta.

"It's absolutely important because it shows that the Chinese government is supportive of this endeavor," said Tanenblatt. "It adds a sense of credibility to the project."