New Chinese Paper Mill In Arkansas Could Bring Culture Clashes, Growing Pains

Apr 28, 2016

Sun Paper Headquarters in China

The investment in south Arkansas by one of China's largest private companies, Sun Paper, is considered a win by state economic development officials. However, some have concerns about the implications of the country's manufacturing practices and what it will mean for workers at the new bio-products mill near Arkadelphia. 

Renaud Anjoran of China Manufacturing Consultants in Shenzhen advises manufacturers in China and blogs about Chinese manufacturing efforts. Speaking to KUAR by Skype, he outlined several potential culture clashes and safety concerns, some reflecting lessons learned from a Chinese copper tube factory in Alabama where workers formed a union amidst complaints of low pay and poor working conditions.

What Might Future Employees in Arkansas Expect?

According to Anjoran, based on the experiences of other Chinese-owned factories in the U.S., workers might have the following complaints:

  • Lack of training programs. He says employees turn over very fast in most Chinese factories, and therefore very little investment is made in training and opportunities to grow a career and move up within the company are often not present. 
  • Poor maintenance of equipment. He says Chinese companies tend to neglect preventive measures and this exposes employees to safety risks. He predicts equipment will break down more often than the industry average. 
  • Difficult communication between employees and management. He says China is a “high power distance” culture. Employees have to listen to their managers and must never talk back. 
  • Difficult communication between Chinese and non-Chinese. He says Chinese people tend to trust people in their inner circle and they could have trouble extending their trust to local managers and supervisors.
  • A focus on low wages. He says jobs at the production operator level will not pay well and he expects below market salaries.
  • Discriminatory practices. He says the concept of discrimination is foreign to Chinese business people, while Americans actively stand up to discrimination. 

Chinese Investment in the U.S. on the Rise

According to sources like the Rhodium Group, a policy and economics think tank, Chinese investment in the U.S. is rising and manufacturing makes up a significant portion of that investment at about $3.5 billion by Chinese firms in the U.S. in 2015.  A recent report notes "the deal pipeline is at an all-time high at the beginning of 2016. We count more than $22 billion worth of pending acquisitions... including Shandong Sun Paper’s pulp plant in Arkansas."

Deloitte expects the United States to surpass China as the most competitive manufacturing nation by 2020, according to its 2016 Global Manufacturing Competitiveness Index.

Related Reading:

New Yorker: Why Chinese Factories Fare Poorly in the U.S.

Washington Post: A Grim Bargain