Haier and the Appreciation of the Yuan

Several weeks ago, Fortune ran an article about several Chinese manufacturers setting up shop here in the US. Writer Sheridan Prasso explained that reliable power, affordable land, skilled labor, transportation cost savings, and generous tax incentives had lured Chinese manufacturers to places such as Camden and Spartanburg, South Carolina. For instance, Haier has begun to produce appliances in Camden, SC. Perhaps most interestingly, Haier even ships some of the high-end refrigerators produced at that factory to China,India, Australia, Mexico, and Canada.

What does the appreciation of the yuan mean for Haier and other Chinese manufacturers setting up factories in the US? It certainly confirms the logic of that strategic move and sets up the opportunity for further expansion. Moreover, it may offer the opportunity for further exports of goods produced at these American factories. If the yuan does continue to appreciate relative to the dollar, one might expect other Chinese multinationals to follow Haier's lead into the US, most probably in states with competitive tax rates and affordable land and labor costs.