Illinois Business Growing in China

The number of Illinois based companies doing business in China has nearly tripled in the last five years.  The head of the Illinois Trade office in Shanghai, Zachary Zhao, told me there are now 300 Illinois companies operating in China.  In 2002, that number was slightly more than 100.  Zhao says it’s more than low labor cost that entices Illinois companies to move to China.  He says the opportunity to market their product to China’s 1.3 billion population is hard to pass up. 

One of those companies operating in China is Littelfuse, based in Des Plaines.  I visited Littelfuse’s biggest and first Chinese facility in Suzhou this week and spoke with the head of Asian Operations.  Dan Onken is a UIUC graduate who grew up in Piper City.  Littelfuse makes a variety of circuit protection products in Suzhou, west of Shanghai.  The fuses go into cars, trucks, consumer electronics, cell phones, and just about everything electronic.  Littelfuse makes one billion fuses a year in Suzhou.  Plant manager Galen Song says there are more than 10,000 western companies with facilities in the Suzhou area alone. 

Peoria-based Caterpillar is another company that’s been in China since the middle 1970s.  CAT has 18 facilities in China and just broke ground on a new one in Wuxi.  CAT’s CEO says China and its other Asian facilities are an important component in the company’s ability to produce profits.  China now accounts for about 2.5% of the company’s total sales.  By 2010, the head of CAT’s Asian operations says China will make up 10% of corporate sales.  CAT’s domestic sales have been sluggish lately.  China’s fast growing economy—at an average 10% GDP per year—and improvements in infrastructure have increased demand for Caterpillar’s earth moving equipment and diesel engines.  CAT is so big on China, it moved its Asian headquarters from Tokyo to Beijing this past fall. 

Caterpillar Building in downtown Shanghai