A Chinese auto glass tycoon has caused a stir by shifting part of his empire to the US and setting up a factory in Ohio, citing high taxes and soaring labor costs at home.
Cao Dewang’s (曹德旺) US$600 million investment comes after US president-elect Donald Trump threatened to declare Beijing a currency manipulator and slap 45 percent punitive tariffs on Chinese imports to protect jobs in the US.
The 70-year-old tycoon’s decision to open a glass factory in the eastern US state of Ohio in October — a rare case of jobs being exported from China to the US — triggered an outpouring of criticism on social media.
The phrase “Cao Dewang has escaped” became a hot topic, generating nearly 10 million views on a popular Chinese microblogging site and many commentators urged China to “not let Cao Dewang run away.”
Cao’s Fuyao Glass Industry Group Co Ltd (福耀玻璃) — a supplier to big names including Volkswagen AG and General Motors Co — claims to be the biggest exporter of auto glass in the world, reporting 2.6 billion yuan (US$374.3 million) in profit last year.
Cao defended himself in an interview with the Beijing News on Wednesday, saying that he “did not run and will not run. The center of my business is in China because I’m Chinese.”
“I’m a businessman and I’m doing business in the US,” he said. “I’m merely reminding the government” that taxes and labor costs are too high.
In an interview with the state-owned China Business News last week, Cao said the country was home to the “world’s highest taxes” and that the manufacturing industry suffered under taxes 35 percent higher than those imposed by the US.
HIGH-SCHOOL DROPOUT
Cao is a high-school dropout who began building his fortune working as a salesman for a local glassmaker.
The Fuyao group owns production lines in nearly a dozen Chinese cities including Beijing and Shanghai.
The group also has a factory in Russia, according to its Web site.
‘CONFIDENCE’
Defending Cao’s remarks, the Chinese Communist Party mouthpiece the People’s Daily on Thursday said that “entrepreneurs dare to raise problems means [they] still hold confidence in China’s economy.”
Cao’s comments reflect “strong personal feelings,” but they touch on “some of the deep conflicts and problems in China’s economy,” it said.
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