The Newest Rust Belt Investor…China?
Take a look at this CNN article about a Chinese firm with plans to build a “Chinese-style mega shopping mall” in Milwaukee.
“The cost of doing business there is very low,” Wu Li, president of Toward Group told CNN. “The people are friendly, the environment is peaceful and the pace of living is slow. It is a good place for Chinese enterprises to go abroad.”
The story explains Wu’s company recently purchased a dormant shopping complex in northwestern Milwaukee that was built in the 1970s, for $6 million. It will open the mall, renamed AmAsia, in August, according to CNN, part of a growing trend of Chinese investment in US real estate. That trend has mostly been in cities outside the Rust Belt –until now.
But not so fast- according to the story. Japanese investors did the same thing a few decades ago and it didn’t work out very well.
Why not?
“You go into a place like Milwaukee, and you have a country that has no clue what people in Milwaukee want in a mall and when they buy it the first thing they do is change it to run like a Japanese mall or a Korean mall or a Chinese mall,” according to an international business attorney quoted in the story. “Well nobody wants to go and then they bail.”
While the firm does plan to have a US company run the mall, it the story says it is recruiting retailers from China. “Two potential candidates include Beijing Wu Yu Tai Tea Company Ltd. and Tong Sheng He, a shoe shop. The goal, he says, is to help Chinese brands boost their image in America while enabling American businesses to connect directly with Chinese wholesalers without having to go through a middleman.
‘It is only a matter of time for the U.S. to recognize Chinese products are high quality,’ he told CNN. ‘[The mall] will represent the highest levels of Chinese manufacturing.’” The mall will also have Chinese cultural exhibits like painting or dancing.
Is this a concept that could succeed in your city?
I’m skeptical. The Milwaukee Journal-Sentinel points out that this mall is not near a highway interchange, as most malls are. The city had planned to demolish the site and put homes there, according to the paper.
Furthermore, while I know we as a country buy billions of dollars worth of Chinese-made products, I just can’t imagine people really embracing this concept.
On the other hand, if they want to invest here…why not?
What do you think?
-KG
Tea? Tea? Not in this beer and brat mecca.
Can’t picture it myself. It’s bad enough trying to find things that are not made in China, let alone shopping in a China-owned mall. I am, however, enjoying imagining the culture clash!
I don’t know about any of that, but Chinese investors bought a large share of the Cleveland Cavaliers last year. Pretty cool.
I also have serious doubts of the wisdom of this investment. Foreign investors have a habit of making poor choices awy from home markets. One also has to wonder about China’s economy in general which is still very dependent on selling to saturated and hopelessly overleveraged economies in the west. Stupidly, they have now taken our advice to “stimulate their economies with easy lending fueling a boom in real estate and commodity speculation which probably will end badly. (See Japan)
One very positive thing is that Chinese investors and the Chinese government are playing a big role as the big investor in the developing world; helping to balance the misguided “charity” aid that has so damaged these countries and entrenched some of the world’s worst regimes.
Hopefully, Foreign investors will help to balance out the similar role the federal government has played in the former Rust Belt.
Interesting post. I think Linda’s comment is right on the money.
If I’m thinking of the correct location of this property, Milwaukee really has nothing to lose here. Will it work? Hmmmmm…. Milwaukeans are somewhat adventurous, and have open minds, but a Chinese shopping mall on the northwest side? I’m very skeptical. This will be interesting at the very least.
[...] new Chinatown! Now this is interesting: Chinese business hub possible - JSOnline The Newest Rust Belt Investor…China? | Rust Wire Coming to Milwaukee: A Chinese mega-mall? - [...]
they owe most of our debt. If we could just pay em back by selling them all of our malls i say go for it!
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