Small-town mayor spends nearly 12 years cultivating bountiful relationships with Chinese companies

Columbus, Indiana, may be considered a small American city, but it certainly has big connections to China.

Every year, Indiana Governor Mitch Daniels visits China with other Indiana mayors. But the Columbus Economic Development Board (EDB) says the city has enough connections and experience in China to send its own team there.

Columbus mayor and EDB board member Fred Armstrong has been to China at least 12 times. Looking back, he says China wasn't ready to invest in the United States on his first trip overseas in 2002.

But the southwestern Indiana city now has four joint ventures with Chinese companies, with a fifth in the works - an impressive number compared to other similarly sized US cities of 44,000 people.

Armstrong says it certainly helps that Columbus started building relationships early with China.

"It's good to build relationship and friendship first before doing business in China. Everybody has got to have trust in each other. That's exactly how business in China is conducted. We've got a great relationship with China," says Armstrong, whose fourth mayoral term will end in January.

Recognizing that China is becoming more of a global player, the EDB established a trade office in Shanghai last year with the goal of attracting more foreign direct investment from China.

Chinese investment into the US is expected to become more commonplace. It is more than doubling annually, with more than $5 billion last year alone, according to a special report by Asia Society's Center on US-China Relations. Chinese firms have created more than 10,000 jobs in America. Over the next decade, Chinese businesses are expected to provide almost $2 trillion in foreign direct investment.

Armstrong is confident that Columbus will be part of this "increased flow of investment from China to the US."

Because of a longstanding 50-50 joint partnership between Dongfeng Motors, based in Wuhan, in Hubei province, and Columbus-based Cummins Inc, a sister-city agreement was signed this year. The close tie between the Chinese automaker and the American diesel engine maker encouraged two more Chinese investments in the city.

Columbus-based LHP partnered with Dongfeng Motor and Yinlun Machinery to form a company in 2008 called LHP Yinchang, which helps foster business between Chinese companies who supply engine parts to Cummins.

Columbus has also established a sister-city relationship with Wuxi, in Jiangsu province, home base to three Cummins facilities.

Armstrong says Columbus is now working on developing educational exchanges.

Last November, Ivy Tech Community College in Indiana announced a partnership with Wuxi Professional College of Science and Technology to facilitate a flow of exchange students and faculty. Since 30 percent of the Columbus workforce is in manufacturing, technology will be an important subject.

"When you have a good education system, you will be able to fill those jobs with qualified people," Armstrong says.