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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

November 25, 2014 at 10:26 AM

Key lessons about China

Last week’s Seattle Times LiveWire panel discussion on China and the Northwest had an all-star cast, all with deep experience with the country. As moderator, here are some of the important concepts I heard:

From Gary Locke, former U.S. ambassador to Beijing and Washington governor: striking contrasts. China is the world’s oldest civilization and yet also its most modern developed and developing nation. Also, President Xi Jinping has amassed unprecedented power, including solid control over the People’s Liberation Army. Xi intends for China relationship with the United States to be one of equals.

From Ray Conner, president and CEO of Boeing Commercial Airplanes: eyes wide open. American companies that intend to do business with China should be well aware of its aggressive neo-mercantilist trade policies and the threats to intellectual property. Also, China is expected to generate demand for more than 6,000 airplanes over the next 20 years, making it the world’s largest market for this sector.

From Nelson Dong, co-head of Dorsey & Whitney’s Asia Law Practice Group and a “China hand” with experience dating back to the Carter administration: Don’t take business relationships for granted. If Washington companies want to do business in China, they must develop and tend ties over many years. Also: Be aware of what is being done and said for domestic political reasons, even if it seems like a snub to the United States. And that China has its loud hawks just as America does; they do not necessarily represent the leadership or inevitable future conflict.

From Jimmy Hexter, senior partner of Catterton Partners and former chair of McKinsey’s Beijing office: urbanization. China already has more than 160 cities with a population of 1 million or more. As with other nations, cities will be key to economic growth and innovation.

From Brad Smith, Microsoft general counsel: better cultural understanding. Both the United States and China need to learn more about each others cultures, history, language and ways of doing business. More Chinese travel to the United States than vice versa, and Americans must start traveling and learning.

From Michael Young, president of the University of Washington: China is ambitious and has a deep historical memory. At the top of that history is a century and a half of humiliation by the West. On the other hand, Beijing’s leaders will do what they say on such issues as economic rebalancing and improving the environment, so it benefits the United States to be patient.

One message that came from more than one panelist is the huge damage being done to the United States by our toxic politics (I call it the Cold Civil War). Things such as the threat to shut down the federal government and default on the national debt, unprecedented gridlock and failure to invest in our future could cause Beijing to mistrust our reliability — or make a dangerous miscalculation about our geopolitical interests and resolve.


Today’s Econ Haiku:

GDP is hot

But seven million jobs short

Pay in the deep freeze


 

 

Comments | More in China economy and business | Topics: China

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