The Fuyao Glass Industry Group produces glass to be provided for various different automobile companies, including industry giants Volkswagon and General Motors. Chinese millionaire Cao Dewang, who owns the glass company said he will be setting up a new glass factory in Ohio, an undertaken which will cost approximately $600 million.
Dewang said rapidly increasing labor costs and high taxes in China for the reasons for the move. Although the two events cannot directly be tied to each other, this also comes just days after President-elect Trump threatened to name China as a currency manipulator and to add a 45% tax on imports from the economic giant.
But this decision has not come without repercussions in China, the term “Cao Dewang has escaped” has garnered over 10 million views on the social media platform called “Weibo,” a microblog which is oftentimes compared to Twitter. There have been many on this platform and others who have urged the Chinese government to “not let Cao Dewang run away”.
Converted to American dollars, the company profited about $370 million last year. In response to this criticism the millionaire clarified that he, “did not run and will not run. The centre of my business is in China because I’m Chinese,” it is true that it is just one manufacturing plant which will be built in Ohio, rather than in China.
Dewang also stated, “I’m a business man and I’m doing business in the US,” Adding, “I’m merely reminding the government” about the ever increasing taxes and labor costs which are coming with production in China.
The Communist Party of China responded with a statement saying, “entrepreneurs dare to raise problems means (they) still hold confidence in China’s economy”. Even this seemingly minor victory is significant as over the last several years and decades a growing trend has been for significant outsourcing of production overseas, especially to China. With this factory being built this long standing trend may be beginning to reverse course.
What do you think? Is this going to help the American economy by adding this factory in Ohio? Will this become a growing trend for more production domestically? Can this be attributed to the election of Donald Trump? Let HYPELINE know what you think in the comments!
(h/t Yahoo! News)