Morgantown reaches out to China

Its population may be only 3,000, but officials in Morgantown, Kentucky, are using their "China connections" to woo Chinese investors and their capital to their rural city, May Zhou reports from Morgantown.

On the morning of Jan 18, a mild winter day in Morgantown, Kentucky, a police car with its lights flashing led two other cars to city hall on Main Street. There, dressed in a tie and business suit, Mayor Billy Phelps stood ready to welcome 12 people, the latest effort by the city to attract Chinese investors.

Located in eastern Kentucky, about 100 miles from Louisville, the state's largest city, Morgantown in Butler County has a population of about 3,000 and the county has about 12,000 people. The rural area is known for farming, timber and auto-supply businesses.

The visit by the Chinese delegation began with personal connections, and the key was Dr Richard Wan. Originally from Hong Kong, Wan had been a family doctor in Morgantown for 48 years until he retired about three years ago.

Wan was enlisted by Butler County and Morgantown to help attract Chinese investment to the area. He was even given a special title: Butler County Economic Development Ambassador.

The "Ambassador" began networking with Peter and Myrna Yau in Chicago, friends also from Hong Kong who provide consultation on doing business between the US and China. And that connection led to a meeting in the spring of 2015 with Tian Deyou, China's Minister-Counselor from the Chinese embassy in Washington. Tian and the Yaus have been friends for years.

Joining Wan on that visit was Phelps, Butler County Judge David Fields and Katherine Jennings, a member of the Butler County Economic Development agency. They asked Tian for help in bringing Chinese investment to Morgantown.

First visit

Three months later, Tian and three colleagues from the Chinese embassy visited Morgantown for the first time. He learned more about the town and the desire to attract Chinese business. He promised to bring people to visit Morgantown.

As a result, last year a delegation of about 10 people from Shanghai toured Morgantown. "Some showed interest in timber, and we have provided more information to them," said Jennings.

Now, in the first month of 2017, Tian personally led a group to Morgantown.

"As I said during my last visit," he told Phelps who greeted him at city hall, I can't promise you that I will be able to bring investment here, but I promise you I will bring more people over to know about Morgantown and Butler County. So this time I am here with 12 people from different cities across the US," said Tian.

The delegation consisted of members of the Chinese embassy, Chinese media, a Chinese business executive and representatives from the China Council for the Promotion of International Trade and the China Chamber of International Commerce

Phelps, an ex-US Marine and former police chief, gave the guests a tour of city hall, and then led them to Butler Courthouse across the street where County Judge Fields welcomed the guests. After they had some basic information about the city and county government, they were taken to see the city.

The first stop was the Copper Building, an abandoned city-owned industrial structure of 162,000 square feet on 11 acres.

Until closed in 2012, Kentucky Copper had been run by business people from India, and employed 100 people to make copper wire for transformers. "To be brutally honest, they were bad in management. They were trying to run the business from India. You just can't do that," said Phelps.

Clothing factory

Prior to being a copper factory, the building had been a clothing factory from the 1960s to 1990s. It employed about 250 to 300 people and made brand names like Levi Jeans and high-end fashion.

"My mother used to work here," said Dana Phelps, the mayor's wife.

"Basically it put most of the moms around here to work. However, after NAFTA was signed, the clothing factory went to Mexico," said Gregory Drake, county extension agent for agriculture and natural resources at University of Kentucky in Butler County.

The building with offices, its own power supply and WIFI is in very good condition and has an appraised value of $12 million.

Phelps said the city is willing to sell it for about $1.5 million, and might consider giving it for free to a business that can use the space to create 500 jobs.

"Job creation is what we care about at city hall," said Phelps, adding that the local unemployment rate is about 7 percent, somewhat higher than the national average.

"That's a great deal," said Peter Yau, who took out a calculator and did some math. He said he crunched some numbers and came up with a cost of about $15 million to build a facility that size. "The selling price is lower than rent in other places," Yau said.

The tour showed the visitors Morgantown's industrial park, which is ready for new development. The guests learned that in town there are numerous auto suppliers such as metal printing, plastic printing, aluminum factory recycling auto tire caps, and a technical school to train workers.

"Delta Faucet is headquartered here. They do engineering and design. This shows that we have the talent to do high-end jobs here in town," said Phelps pointing to the company.

Chen Bin and Han Jianbing, representatives from the China Council for the Promotion of International Trade and the China Chamber of International Commerce, recorded everything they saw and heard for a report to their more than 10,000 member companies.

"I am sure someone will show interest and make further inquiry," said Chen.

After touring the city's industrial assets, the guests visited Morgantown Elementary School. They were warmly welcomed by students holding Chinese and American national flags. In a classroom, some students counted from 1 to 10 in Chinese to show their Chinese language ability. Chinese language training is another step Morgantown has taken in its pursuit of Chinese business.

Chinese language classes

Following a discussion with the Chinese embassy, Morgantown decided to start Chinese language classes in the fall of 2016. Due to limited resources, classes are taught by two teachers from the Confucius Institute at West Kentucky University.

Wang Yahong, one of the teachers, said that she and the other teacher have been teaching Chinese at two elementary schools, one middle school and one high school. While an optional course in middle and high school, Chinese is being taken by all of about 1,100 elementary school students, once per week.

"It's just the beginning, and hopefully we can get more teachers later," said Wang.

The guests were shown the school library and gym, and listened to students from the school's leadership team, Lighthouse, recite the seven habits from author Stephen Covey's best-seller, The 7 Habits of Highly Effective People.

Student Maggie Drake, who showed her Chinese language skill with simple phrases such as "Hello" and "Happy Chinese New Year", said she enjoyed learning Chinese. "When I am older, I want to do foreign exchange with China," she said.

Gregory Drake led an afternoon tour with the first stop in Woodbury, a town with a population of 90 about five miles from Morgantown on the banks of the Green River, which was a major transportation route before the development of a nearby highway.

At the next stop, the Rose Farm, Johnny Rose talked to the guests about farming life. His son Philip, a recent college graduate, said that he chose farming with his father over living in New York City. "I didn't like it one bit," he said.

Zhang Qiang, president of China Jiushan Trading Co, was very interested in the farm's soybean production. "The quality of the soybean is very good," said Zhang, who was given a bag of soybeans after the tour.

Zhang's company imports about $2 billion of soybeans every year from the US. However, she is also looking for investing opportunities. "There are many opportunities from production to harvest, storage, transportation and processing. We want to diversify our investment," said Zhang.

It was Zhang's first time in Kentucky, and she said the visit was very helpful in understanding the local farming business and transportation and to assess investment options.

At a dinner concluding the visit, more than 100 people including state legislators, county and city officials, and representatives from the state's congressional offices, and local business people, talked to the visitors.

In a presentation titled China Touches Morgantown, Tian Deyou, after presenting an overview of China, offered suggestions on how Morgantown could attract Chinese business: go to the SelectUSA Investment Summit where many Chinese companies will be present and connections can be made; get help from Chinese students in Kentucky.

"There are more than 300 students at Kentucky University alone. Many of their parents are entrepreneurs. Learn from them what Chinese businesses want, and let them know about your county and city," said Tian.

Tian said he was impressed by the hospitality of local residents and the investment environment. "I think some Chinese companies will show interest in Morgantown and Butler County. We hope this visit will increase Chinese business people's awareness of the area and bring more bilateral cooperation."