Corning Watch: Corning Inc. grows relationship with China

What Fortune 500 company has eight factories and 3,000 employees in China and has invested $3 billion there in the last 25 years?

If you guessed Corning Inc., you guessed correctly.

That explains why the company's chairman and chief executive officer, Wendell P. Weeks, visited Beijing recently to discuss economic cooperation with high-level Chinese officials.

For Corning Inc., the stakes in China are high. With a population of 1.3 billion and a growing middle class, China will inevitably become the largest economy on the planet.

Companies that don't have a strong foothold there before that happens will be left struggling to function in secondary markets -- a scenario that Corning Inc. wants to avoid at all costs.

Weeks met Nov. 5 with Chinese Vice Premier Wang Qishan, who told the Corning CEO that China welcomes Corning Inc.'s growing investment in the Peoples Republic.

The Chinese official also called for the United States and China to avoid politicizing economic issues, an apparent reference to charges that China manipulates its currency to gain trade advantages.

So far this year, Corning has announced two new ventures in China.

The first, a $125 million investment, will expand manufacturing capacity at Corning Shanghai Company Limited, which makes ceramic pollution-control devices for cars and light trucks.

The second, expected to cost $40 million, will finance a new manufacturing and distribution facility for Corning Life Sciences in Wujiang Economic Development Zone. That will make Corning Inc. the first U.S. manufacturer of locally produced labware products in China. Chinese spending on health care is expected to total $250 billion this year.

Wujiang, in southern Jiangsu Province, is home to 1,300 foreign companies that have invested more than $11 billion.

All four of Corning's major businesses -- display products, life sciences, environmental products and telecommunications -- now have operations in China.

Already, more than half of Corning Inc.'s revenue comes from Asia. With continued heavy investment in China, Asian sales are likely to account for a larger share of the company's income in the future.

How important is it for Corning Inc. to establish a strong position in China?

Here's how Peter Volanakis, Corning's president and chief operating officer, put it last July:

"China's emerging economy and the strength of the Asian market are critical to Corning's long-term growth strategy ... and China has become the largest market for all our core products."