Businesses in China and India, the emerging markets that Gov. Martin O'Malley has been trawling for trade relationships, are beginning to bite.
This month, the governor announced the opening of a Chinese bank in Baltimore and conducted a forum for Indian business leaders, priming them to open U.S. subsidiaries in the state. The events could be a turning point for investment in Maryland from these countries.
"Europe is struggling and global companies want to go to stable environments," said Nancy McLernon, president and CEO of the Organization for International Investment, a Washington-based nonprofit business association for U.S. subsidiaries of foreign companies. "This governor certainly is working to bring in global investment."
O'Malley went to India in December, visiting three cities with representatives from more than 40 companies. In June, the governor went with nearly 70 business leaders on a trade mission to China, South Korea and Vietnam.
His office has said the East Asia trip netted $85 million in deals for Maryland businesses. The India trip spurred $60 million in business deals. The opening of a Chinese investment bank in Baltimore's World Trade Center and the Maryland-India business forum were extensions of discussions that began on those trips.
On April 13, the Export-Import Bank of China and the Maryland Department of Business and Economic Development signed a cooperative agreement saying that the bank would open an office at the Inner Harbor, its first U.S. outpost.
The China Exim Bank, as it is called, is wholly owned by the Chinese government and headquartered in Beijing. A mission of the bank is to provide construction loans; to date, it has done so primarily in developing nations.
O'Malley's administration hopes the institution will help bankroll infrastructure and development projects in Maryland.
"Money for capital projects is somewhat constrained," said Robert L. Walker, the assistant secretary of business and enterprise development for the state's development department. Money from Chinese firms that could be used for private-public partnerships is "needed and welcomed," he said.
"The governor has been looking for investors for State Center and the Red Line" and other projects, Walker said. The State Center is a $1.5 billion, midtown redevelopment project that is being challenged in court. The Red Line is the proposed east-west light rail route in Baltimore.
In addition to O'Malley's expectation that the Export-Import Bank will be able to front cash for state projects, the bank is also intended to foster business relationships and act as an anchor for Chinese companies that want to invest in the United States.
On Tuesday, O'Malley addressed about 60 business leaders from India and Maryland. The Indian delegation was organized by the Federation of Indian Chambers of Commerce and Industry, which was traveling through several U.S. cities this month. Bank of America, CareFirst, Wells Fargo and Merrill Lynch were among the U.S. firms represented at the forum.
"I think what they were looking for … was a partner that they could trust," said Shobhana Sharma, president and CEO of Montgomery County-based Environmental Management Services, which sponsored the forum. Sharma went to India with O'Malley's delegation last year. "The openness [of the forum] and the fact that the governor was there … was tremendous.
"I told them it is an easy place to do business" because Maryland has good transportation, friendly people and easy access to Washington and a major port, she said.
It's often not economic incentives such as tax breaks that seal the deal for foreign investors, said McLernon, head of the business group for U.S. subsidiaries of foreign companies. The availability of workers and training centers — such as colleges that will prepare people for jobs in a certain field — is typically the clincher, she said.
Some of the Indian companies that met with O'Malley's trade mission last year are convinced that Maryland is the place to expand. Jasco Nutri Foods, an organic food company, has said it will invest $10 million to open a facility in the state — the location is not yet known — that could create up to 100 jobs. Jubilant Life Sciences, an Indian pharmaceutical company that operates a manufacturing plant in Salisbury plans to invest $20 million to triple its warehouse space on the Eastern Shore.
Maryland and the rest of the country will benefit by allowing companies based in China and India to open plants and offices in the United States — and play by U.S. rules, McLernon said.
"That's where the money is right now" and O'Malley's doing the right thing by not having a "knee-jerk" reaction to emerging markets' political systems, such as China's Communist regime, she said. "Even though there might be areas of concern about China and India, we need to push through."