Chinese billionaire businessman Cao Dewang recently revealed why he is moving a portion of his company’s glass manufacturing operations to the United States, saying he is investing a total of $1 billion in the project in an effort to cut costs.
In an interview with The Beijing News, the Fuyao Glass chairman stated that the US will be a lot less expensive for manufacturing, citing rising tax costs in China being much of a burden for his firm, South China Morning Post reported. Cao’s business initiative includes the take over an old General Motors plant in Ohio which was converted into a modern auto glass factory. The move is expected to create at least 3,000 jobs.
In the last couple of decades, it has become a common practice for many American companies to head to China for significantly cheaper labor costs and less stringent regulations. The 70-year-old stated, however, that businesses in China actually paid 35% more taxes than their counterparts in the US, and explained how the value-added tax is becoming their biggest problem.
Cao, also known by his Cantonese name Cho Tak Wong, noted how cheap land, lower energy costs and other incentives in the US would allow for increased revenue for his company in the long run, which currently supplies glass for some of the world’s top car manufacturers.
Cao explained that China may eventually lose its traditional manufacturing advantage which has transformed the country into an economic powerhouse that it is today.
“I just told the truth and spoke out about the problems,” Cao was quoted as saying. “I just want to remind the government and businessmen and let everybody be aware of the risks, telling them to be careful.”