From the Washington Post:
Gov. Terry McAuliffe scored an economic coup and expanded Virginia’s already substantial business ties with China on Wednesday as he unveiled plans for a major manufacturing facility in the Richmond suburbs.
The announcement caps a string of recent economic development deals involving China and Virginia, highlighting the country’s growing importance in the commonwealth’s economy as both a trading partner and an investor.
Under a deal that state officials called the largest ever between a Chinese investor and Virginia, Shandong Tranlin Paper Co. will create 2,000 jobs with a $2 billion plant that makes paper from corn stalks and other agricultural field waste.
My reaction to almost every announcement of new foreign investment goes like this: First, I’m excited to hear about the new investment, and pleased when people do not respond with a fit of economic nationalism. But then, inevitably, I read on and get frustrated:
McAuliffe (D) approved a $5 million grant from the Governor’s Opportunity Fund to help lure the company, reflecting the former entrepreneur’s push to expand and diversify the state’s defense-heavy economy.
Sigh. It’s great that foreign investors are building new factories. We should welcome that. But there is no reason to subsidize it. Let investors of all national origins go where they want, but offering them subsidies is just a big waste. It doesn’t create more investment, it just shifts it around based on non-market factors.