Eight unique ways to attract foreign investment in the United States: what is the most successful way to attract foreign investment in the world?

[text of internal reference for investment promotion]
The reason why the United States can attract a large number of foreign investment is generally believed to be due to its good infrastructure, advanced transportation and communication, advanced science and technology, and high degree of market opening. It is believed that the U.S. economy is highly market-oriented and liberalized, so the role of the government in attracting investment is negligible.
But according to our investigation, this is not the case. To some extent, the government plays an extremely important role in attracting investment.
1. Acceleration of economic integration
Since the Second World War, especially after the 1970s, the pace of economic internationalization and integration has been greatly accelerated. In the era of President Reagan, the United States implemented the "new federalism" policy, transferring the responsibility of economic development from the national level to the States and even cities. In the Reagan era, the role of the federal government in all domestic policies declined dramatically. Many of the federal economic development plans formulated in the 1960s and 1970s have been largely cancelled or cut down. The governments of various states have to undertake more economic development policies, and each state and city has to seek its own way to support itself and protect itself.
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In this environment and background, the U.S. state governments strive to find various ways to develop local economy, attracting foreign direct investment has become an important part of the state economic development strategy. In order to attract more foreign direct investment. Since the 1980s, there has been fierce competition between States and cities in the United States. This kind of competition is even called "crazy competition".
2. Crazy competition for foreign direct investment
States and cities in the United States show great enthusiasm for foreign direct investment. Once a foreign company is willing to choose the place of investment in the United States, and the relevant cities find that it has the hope of winning, they will introduce a set of plans to encourage investment to attract foreign companies.
Why are States and cities so eager to attract foreign direct investment and attract foreign companies to set up factories in their own states and cities? There are two main advantages: increasing employment and increasing taxes.
Since the outbreak of large-scale economic crisis in western countries in the 1930s, Keynesianism has gradually become the leading ideology of the west, especially the US economy. There are two tenets in Keynesianism, which have become the principles of the US economy: one is full employment; the other is strong government, which needs strong financial support.
After the 1970s and 1980s, the US economy suffered from the impact and challenge of Japan's economic rise, the oil crisis in the Middle East and the rapid economic development of other developed countries and developing countries in the world. The domestic unemployment rate rose, the traditional industries sunset, and the products were squeezed in the international market. In order to develop the local economy, solve the urgent employment pressure and increase the government revenue, the States and cities must attract more foreign direct investment to promote international trade, expand the tax base of the government and expand the tax source of the government. For this reason, there is a fierce competition among them. It can be said that from the beginning of the 1980s to the beginning of the 21st century, the competition for foreign direct investment among States and cities in the United States has never stopped, and it has become increasingly fierce.
In the mid-1980s, Honda was the first company to set up a wholly-owned factory in the United States. Later, Toyota also came to Japan to invest (although Toyota entered the U.S. market because of its own needs), but the States and cities regarded this as an excellent opportunity for economic development. In order to compete for the Japanese giant, 30 states put forward various incentive plans, which greatly surprised Toyota. Kentucky paid a price of 125 million US dollars and won the prize Got a $800 million factory.

3. Sending foreign investment offices
In order to obtain more investment opportunities, the States and cities of the United States have also sent investment offices to relevant countries in the world. In Japan alone, 35 states in the United States have established permanent offices, and almost all of them have offices in Europe. Although this kind of office costs a lot (a 2-4-person office in Tokyo costs US $1 million a year), state and city officials say that the cost is worth it. It not only improves their visibility, but also makes them more quickly access to all kinds of information and business opportunities. The German Office of North Carolina, a low-profile state in the United States, attracts almost 50% of the foreign investment in the state.
4. Improve the service quality and efficiency of the government
In order to attract more FDI, it is necessary to improve the quality and efficiency of government services. This has become the consensus of government officials at all levels in the United States, and is also one of the competing conditions for attracting foreign direct investment among States and cities.
Local governments at all levels in the United States have institutions and departments that help enterprises start businesses and carry out business. These institutions and departments are generally small. For example, the economic departments of small and medium-sized cities generally have no more than 10 people, but they have a wide range of functions, provide a wide range of services, high efficiency and good quality. Starting from the analysis of industry and market, how to run a company, how to solve the problems encountered in the process of running a company, how to raise funds, how to hire and train employees, how to run social security for employees, and how to deal with enterprise operations All problems in the industry are within the scope of their services. And this kind of service has two characteristics: one is free of charge; the other is that enterprises don't manage it when they don't need it. If the officials of these departments can't answer and solve the enterprise's requests and problems well, the governor (mayor) will ask a letter from the enterprise to the governor (mayor).
In order to assist foreign investors in site selection, many cities in the United States have set up "integrated service centers" to help them identify a site and complete the procedures within a specified period of time. They have also cooperated with real estate developers to speed up the process of site selection and plant construction, and to solve a series of (sometimes extremely troublesome) government rules and requirements in the process of site selection, so as to make the city where the new plant is located more convenient Become a favorite new home for investors.
Chicago established the "corporate Express Department" in 1994 to provide investors with almost all inclusive services. They are fully authorized by the mayor and have high authority. This department can deal with all the problems encountered by investors in Entrepreneurship and operation. If it involves any department, you can directly find the leader of the Department, and ask the relevant department to solve it within a limited time. The "performance" assessment of government service enterprises is based on the records of the service efficiency of government departments and the satisfaction of enterprises involved in the Department's handling of enterprise requirements.
In order to better attract foreign investors, all States and cities in the United States provide them with positive and open information. The information is available in pamphlets, videos, DVDs and online, and in many languages. This kind of information, from business environment, living conditions, customs, to special information, such as labor law, environmental protection law, comparable wage rate, fuel cost, transportation capacity, market conditions, preferential policies, procedures, service institutions, telephone and electronic network of government officials in charge of economic work, is almost everything.
5. Cluster economy
States and cities in the United States attract FDI with great enthusiasm, even "crazy competition". However, it is not that foreign capital is completely involved. It is not that foreign capital is willing to invest in any project or place. Instead, it is through preferential policies, industrial policies, efficient services and urban planning, as well as huge investment to establish good infrastructure to attract the projects and enterprises needed to settle in "development zones" and vigorously promote "cluster economy" .
American cities generally have "development zones" to provide a platform for the development of foreign investors. "Development zone" generally has two forms: one is Industrial Development Zone, the other is scientific research development zone. Development zones in the United States are generally small in scale. They were established in the 1980s and 1990s, and most of them are planned along expressways passing through cities. There is no special "management committee" type management organization in the Development Zone, or it is managed by the Economic Department of the local government, or by the local economic development company, or even by the chamber of Commerce. Scientific research and development zones are all set up by or around universities. The state government has invested a large amount of money in the area to build a Research Park incubator with advanced facilities and perfect functions, making it a paradise for entrepreneurs. The research and development zone established for the University of Illinois is characterized by factories and machinery industry. It was founded in 2000 and was rated as one of the top ten research parks in the United States in 2002.
Industry investment promotion is an efficient way for the United States to attract foreign direct investment. In the United States, many cities are "one industry in one city" or "several industries in one city", rather than pursuing complete or diversified industries. Generally, a large enterprise is headquartered in a city, and other enterprises process and produce around it, forming a "cluster economy". The success of an enterprise depends not only on the preferential policies available to the enterprise and the good service provided by the government, but also on the industrial environment, which is the comprehensive situation of the local industry to be invested by the enterprise, including the integrity of the industrial chain, the proximity of external supporting facilities, the information brought by the symbiosis of the enterprise, and the availability and commonality of the required talents. The higher the industrial concentration of a place is, the stronger the attraction of new investment in the industry will be. New enterprises can improve their competitiveness and reduce business costs through the brand value of this industrial highland. This is the charm of "cluster economy".
The governments of various states and cities in the United States generally put forward a clear development strategy of "cluster economy" based on their own characteristic industries, and created many successful examples: through the work of the St. Louis state government, DuPont protein Co., Ltd. and another famous company jointly built a food and health products production enterprise, which announced that the company's headquarters, administrative departments and R & D machine will be established The company moved to St. Louis as a whole, with an estimated annual revenue of $800 million.
Pfizer, the world's largest pharmaceutical company, announced that it would establish a major R & D base in St. Louis, making St. Louis's dream of becoming an American Center for plant and life sciences come true. St. Louis recently passed a bill to raise 684 million US dollars to expand the research capacity of life sciences and support the transformation of scientific research achievements.
6. "Incentive package"
In order to attract foreign direct investment, American States and cities often implement "package incentive plan". This package of incentives varies from state to state and from city to city. However, in a state or a city, the incentive plan is standardized and open to everyone, big or small. However, in the actual negotiation process, it is "big customers bully the owners, big customers bully the customers". Big companies get more preferential treatment than small companies by exerting pressure. Because the economic and social benefits of some huge investments are greater than those of small companies, they can get more benefits and more favorable conditions than domestic investments.
The "package of incentives" for American States and cities to attract foreign direct investment covers a wide range, including tax exemption, subsidies, low interest bond loans, loan guarantee, employee training, improvement of local investment environment, land subsidies and special lease term provisions. Even, in order to attract foreign investors (such as Japan), Japanese schools are set up locally to help Japanese workers and their families learn Japanese and adapt to American life in various ways, or to help Japanese children maintain their traditional social values. To this end, the U.S. state government even spent a huge amount of money, such as Kentucky spent $5 million to build Japanese schools for Japanese employees of Toyota.

7. Lower tax rates
The tax incentive policy is one of the main contents in the "package incentive plan" of American States and cities. Reducing tax rates means reducing business costs. Reducing tax rate has become the main means for governments in the United States to attract foreign direct investment.
In Illinois, tax incentive policies are implemented for all companies, and policies are issued from six aspects to reduce the income tax of enterprises. There are two main items: one is that the tax statistics only calculate the part of the sales income in the state; the other is to provide a certain proportion of tax credit according to the total investment of enterprises, creation of jobs, R & D investment and staff training investment. The credit can be used for a certain proportion of tax credit and income tax offset. As for sales tax, there are more exemptions. For example, the state sales tax rate is 6.25%, and for food and medicine, it is reduced to 1%; the sales tax on purchased manufacturing machinery and equipment and related accessories, agricultural institutions, environmental protection equipment, etc. are all exempted. For utility taxes, natural gas purchased from outside the state is tax-free, and water and sewage are not collected. Property taxes are big, but many states are exempt from property taxes, only local taxes. Sales of "personal property" such as machinery and equipment, goods in stock and intangible assets are not levied.
At the same time, states and cities in the United States have also introduced a series of tax-free plans. The main forms are: tax reduction or extension, tax exemption or tax credit. Sometimes this kind of tax transaction is used for land leasing, sometimes for new investment or the purchase of machinery and equipment. Tax exemption is usually applied to vocational training, training a worker, local tax exemption on a part of the tax. Michigan won a lot of tax cuts for Mazda to build a factory in felitrok, and chattanouda city also attracted Komatsu bulldozer factory to settle down because of the tax delay.
Providing various subsidies, loans at lower than market interest rates, loan guarantees and low interest financing bonds will help attract foreign investment to build factories or improve the technological level of enterprises. This kind of financing method is often used in various parts of the United States to help medium-sized enterprises that have a bright future in new development investment. State and local funding for large projects is very generous. Michigan loaned $21 million to help bring the Mazda factory in trock into production; Ohio gave Honda a grant of $2.5 million as a subsidy for the company to set up a factory in marisville; Pennsylvania offered a low interest loan of $48 million to persuade Volkswagen to set up its first American factory in the state.
8. Provision of land
Preferential treatment for foreign investors in land use is another important part of the "incentive package". For example, Kentucky bought 1600 acres of land for Toyota company with 35 million dollars, and leveled the land to Toyota company. The company does not have to pay real estate tax on its factory site. In order to attract Japan's Mitsubishi to settle down in Illinois, the land was sold at a price of US $1 per acre. Mitsubishi invested in a complete vehicle assembly plant here, with an annual output of 200000 cars and more than 5000 employees. A commercial high-rise building is built in the center of the city of champaign. The area of the building is given to the developer free of charge by the government. In addition, many states and cities in the United States also control the price of water, electricity, natural gas and other large consuming enterprises, or provide subsidies to reduce the operating costs of enterprises. These policies have become an important magic weapon to win the investment. Some cities also implement tax incentives for investors to buy or build their own houses locally.
More than 80% of the states in the United States give a lot of subsidies to foreign investors to employ local employees. Kentucky has provided $65 million for Toyota's local plant training; among the $66 million in Tennessee's incentive plan to win over Nissan's plant, more than $7 million is used for employment training; in Georgia's "quick start" plan, there are special programs for training employees to meet the company's special needs for employees requirement. A Japanese computer company has set up a company in the state. Georgia has trained 150 employees for the company. A person in charge of the company said that the key to whether the factory can settle in the state is that the state has provided us with trained employees. Volkswagen of Germany wants to enter the United States to set up factories, which has attracted competition from 47 states in the United States. When VW was about to make a decision, there were only Pennsylvania and Ohio left. In the end, Pennsylvania offered the best conditions - an average of $34000 per employee to win.