Bush in China: Engage or Enrage
As George Bush prepares to visit China, the US must decide whether it will engage with China as a strategic partner, or view it as a threat and risk enraging the emerging superpower. Jeremy Gordon, of consultancy China Business Services, believes that business has a vital role to play in building strong ties.
(PRWEB) November 19, 2005 -- US lobby groups, with a focus on protectionism, present a real threat to trade, investment, and the bilateral relationship with China. Many of the anti-Chinese messages result from a belief that US job losses – and the growing trade deficit - are a simple result of companies moving production to China to take advantage of cheap labor.
But according to Jeremy Gordon, the situation is more complex. Gordon notes that “China is an easy scapegoat for certain groups, but they ignore the fact that almost 60 percent of exports from China are from foreign-invested companies, and that the US has also been affected by weak domestic demand, productivity growth, and a strong dollar which has hit exports”. Gordon goes on to say that “protectionist US trade policies against China will not save US manufacturing jobs, as these will simply go to other, more competitive markets, and will actually have a negative impact on US consumers”.
George Bush’s China visit, from 19-21 November, is set against a backdrop of the trade deficit (US$162 billion in 2004), the textiles trade dispute, arguments over protection of intellectual property rights, valuation of the Chinese currency, threats by Congress to impose a 27.5 percent tariff on imported Chinese goods, and other issues.
China is already the United States’ third biggest trade partner – with trade reaching US$206 billion in 2004, and the US is the third biggest investor in China, and its biggest trade partner. Despite the overall trade deficit, the US has seen increased surpluses in services and agricultural goods. The US business community is well aware of the opportunities, and can help build vital bridges with China. High-profile US visitors promoting business ties, arriving ahead of Bush, have included Arnold Schwarzenegger, and 218 business people with Tim Pawlenty from Minnesota - on the largest-ever US trade delegation to China.
While there is a risk that there will be conflict with the Chinese, Gordon emphasizes that “there is also a lot of positive news in the US-China relationship. The Chinese market continues to open, and Chinese consumers are creating more demand for US goods and services. At China Business Services we believe that US companies need to focus on their competitive advantages, in areas such as high-tech goods and value-added services, and that constructive economic engagement and free trade will bring significant benefits to both China and the US.”
China Business Services Limited is an independent, research-driven consultancy that uses specialist resources to deliver integrated solutions to companies in China. Jeremy Gordon, the Chief Executive, has advised international companies in China for over 10 years, and has written and spoken widely on China business issues.
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