EDITOR'S note:

GLOBAL capital flows both ways. China used to be a net recipient of US investments but it's starting to invest in the United States. Its total investment now stands at US$6 billion, only 0.3 percent of all foreign investments, but there's significant room for growth.

To attract foreign capital to help pull the US out of recession, US President Barack Obama set up a program called SelectUSA to answer overseas investors' questions about logistics and federal and state regulatory processes.

Officials from SelectUSA and a few US mayors visited Nanjing, Jiangsu Province, last Friday to promote the US as an investment destination.

Shanghai Daily reporter Ni Tao interviewed Michael Rawlings, the mayor of Dallas, Texas. about the potential for Chinese companies to do business in Dallas, the ninth largest American city.



Q: How many Chinese firms are operating in Dallas?

A: ... We have probably dozens of companies from China that have invested in our city. In Dallas, one of the biggest Chinese firms is Huawei. And we've got a lot of businesses whose major part of operations is about China.



Q: Are there preferential policies for foreign investors in Dallas?

A: We are very aggressive with taxes and incentives. As businesses move in, we would offer them tax abatements for periods of time if they are able to create jobs. And for individual investors we have a program called Dallas Regional Center where individuals can invest in Dallas and get some benefits from green card status as well.

We also have two free-trade zones, one in the Dallas airport and one in the City of Dallas. Companies put together their merchandise, assemble merchandise and send them out. They don't have to pay duty bringing them into the United States.



Q: Dallas' economy is technology-based. How many Chinese high-tech firms are operating in Dallas?

A: Technology is very important for us. Texas Instruments is based there, and also AT&T and other big companies. What we try to do is to attract Chinese companies to come and be part of that infrastructure.

Technology is the most potential sector for Chinese investors. We are a technology-based society. Our heritage has a lot of technology in telecom minutes. We have universities like the University of Texas at Dallas focused on technology. If I meet with the business people, I'm going to focus on the technological guys the most quickly, because I think they have the biggest chance to be successful in Dallas.



Q: What's Dallas' comparative advantage as an investment destination compared with other US cities?

A: I think there are three things. The first is we are centrally located, so the logistics of a business is much simpler. You are able to manufacture cheaply, and you are able to get your merchandise into the country easily or throughout the United States. Our location is good.

Our cost of doing business is lower. Hiring people is cheaper. Rental of space is cheaper. And you get the combination of a world-class center and at the same time something that has a low cost.

And the third advantage is very important and that is the people. We have a saying that Dallas is a can-do city. So the people that you hire in Dallas are very optimistic and hard-working. Dallas believes that the future is very bright and we don't have a heavy tie to the past, like the old days were better. It's all about the future.

So you have an exciting workforce, also a banking sector, government sector, all the sectors trying to pull those businesses along. It's like being in a bike race, and being able to draft off other bikers in that. The environment is so exciting for businesses that they do well by being part of that.



Q: What is Dallas' position in President Obama's plan of "reindustrializing"? How can Chinese firms benefit from the plan?

A: I think one of the things that Dallas provides is cheap land and an inexpensive way to build a plant for light manufacturing. And if you have a way to pull things together and build a building quickly and cost-effectively, Dallas is the place much more favorable than other places throughout the country.

I think Texas and Dallas in particular have been the economic growth engine for much of the United States through this recession. Our GDP has gone up, our population increase has gone up. We've gotten smarter. So President Obama or politicians at the federal level look at Dallas, and say, "that's a good model that the rest of the country can follow."



Q: A fair portion of Chinese investments in the US is concentrated in the energy and resources sector. What implications will that investment preference have for energy-rich Texas?

A: I think energy is a very tricky thing in the United States to invest in. I think if you know what you are doing, you can find good investments. But you have so much infrastructure already in place in Houston. And the Dallas area is a corporate headquarters. You can easily get misled if you don't know what you are doing.

The sectors that I would probably suggest would be energy-support sectors, sectors that support the energy industry and not direct energy investments themselves. Natural gas has done very well. We've had a boom with the Barnett Shale. And with the whole new way to extrude natural gas, it's been great growth.

The problem is because the price of natural gas is so low, the market is very crowded. So if I were suggesting for the Chinese companies, I would say do you do really well? And I think that the world of technology is much better than energy sector.

A lot of Chinese will do real estate investment, which is good, but it's speculative. Real estate can go up and down. But if you want to build for the long term, I think technology is the right way to do it. And Dallas purposely doesn't want to be too energy-focused, because you can have those boom and bust [cycles].

The other thing that's growing in a major way is healthcare resources. So if someone has technology in the world of healthcare, they can tap into some of our healthcare institutions, universities and succeed I think very well.



Q: What future role do you expect Dallas to play in wooing Chinese investment?

A: What I'm impressed with in China is its willingness to move quickly. Chinese firms don't sit back and wait. Dallas is a place that can move as quickly as China can. So we can put Chinese money to work.

The second is that we are still building our infrastructure. There are opportunities for Chinese investors to invest in our infrastructure, be it train systems or highways, hospitals, and it is safe, secure investments that'll get returns.

So if investors look for low risk, high return, and a reasonable value to get on investment, Dallas has all those elements.



Q: It's your second visit to China to promote Dallas. Do you sense a stronger urge among Chinese entrepreneurs to invest in the US?

A: I do. But I think first of all Chinese entrepreneurs are still learning about Dallas. Dallas is a city they kind of understand a little bit but not in-depth, and that's why I am here to tell the story in a better way.

We can be very targeted toward individuals, and very successful, but still at the state level, people are not clear as to what Dallas has to offer. So there's a lot of work we still have to do to change the awareness of who we are.



Q: How does Dallas' local community perceive Chinese investment? Are they ambivalent?

A: Dallas is a city of opportunities. It's a city people come and move to. I moved to Dallas when I was 21. Most people move to Dallas.

I have a speech and will say "show me your hands everybody who is born and raised in Dallas," so maybe 50 percent of people were born and raised elsewhere and they came.

That's the same attitude we have toward Chinese investment. You are here for the same reason as we came. It's a new frontier of doing business.

The vice mayor of Nanjing told me that the aggressiveness our cities have matches up. So we welcome Chinese money. I don't sense any ambivalence at all. Chinese have money and they are usually good businesspeople.



Q: What's your advice for Chinese investors?

A: I would do what I do as an investor. That is, stay in a sector you know there is a good opportunity. And then go deep on the specific opportunity with due diligence.

Dallas is a very transparent city so if you can get the numbers, and you don't understand them, it's bad investment.

Stay in a sector, come to Dallas, work on a specific deal. We working for the city will help you do that and tailor programs for Chinese investors.