Stop Breaking China

Jul 15, 2018 by

The bilateral relationship between the US and China is the most important on the world stage today. Every major world issue – from North Korea to Russia to global warming – will intersect at the corner of Washington, DC, and Beijing. This bilateral relationship, an ongoing dance, has produced mutual benefits for both our countries and indeed, all of humanity.  It is up to our national leaders to navigate this evolving relationship in ways that produce “win-win” opportunities for us all.

With leadership and skill, the China/US relationship does not have to be a zero-sum game.

Mid-West Lesson

While not naive about the challenges between our two nations, I do believe it is in our vested interest, at a subnational level, to seek ways to build economic, educational, and cultural bridges.  I believe Michigan is threading this needle in ways that will pay dividends for decades to come.

Earlier this summer we kicked off “Michigan-China Week” in the thriving Motor City with Mayor Duggan, Gov. Snyder, Chicago Chinese Consul General Hong Lei, 5 provincial  Chinese officials and hundreds of local businesses interested in learning about or expanding their business in China as well as Chinese investors seeking places to invest in Michigan.

The cities of Detroit, Ann Arbor, and Grand Rapids held special celebrations. Government and business delegations from six of Michigan’s partner provinces in China—Guangdong, Sichuan, Hebei, Liaoning, Jilin, and Heilongjiang— traveled to Michigan to attend this bilateral exchange.

The events were organized by the Michigan-China Innovation Center (Michiganchina.org). Founded in 2016 with a grant from the State of Michigan, the Michigan-China Innovation Center (MCIC) is a non-profit organization building business ties and enhancing cooperation between Michigan and China. Its mission is to create jobs, attract investment, and increase competitiveness in Michigan by developing win-win ventures with China.

There are many success stories to counter the old “ship our jobs to China” narrative that often gets exploited, especially during election season.

Just recently, Guangzhou Automobile Group,  a Chinese-based automotive company, announced it will expand its current operations,  investing more than $4.4 million and creating 62 jobs with a new research and development facility in Farmington Hills.

As noted by The Detroit News business columnist, Daniel Howes, a Chinese auto supplier purchased a Michigan company creating jobs and investment – right here at home. The acquisition became a win-win opportunity. https://www.detroitnews.com/story/business/columnists/daniel-howes/2018/05/08/chinese-moves-detroit-gain-speed-scrutiny/34702283/

 

Chinese Investment Pays Dividends To Michigan

The Detroit Free Press business columnist Carol Cain has done an exceptional job covering China’s rise and what it means for Michigan. She reported on another Michigan success story that could be derailed by the Trump China tariff dispute in a recent column: Michigan Jeep supplier backs Trump but fears his tariffs on China 

https://www.freep.com/story/money/business/columnists/carol-cain/2018/05/05/china-tariffs-trump/576588002/

Treasures 

Michigan is blessed with an active Chinese/Asian-American community that adds value, contributes greatly to our state, and makes a huge difference to the framework of our communities. Some of the organizations include: The Detroit Chinese Business Association (dcba.com), the Chinese Association of Greater Detroit (cagd-us.org), The Michigan/US/China Exchange Center (www.ucxcenter.com), The National Association of Asian American Professionals, Detroit (http://dtw.naaap.org/about-naaap/), Association of Chinese Americans (acadetroit.org), and the Council of Asian-Pacific Americans, (CAPA-mi.org).

Jerry Xu, President of The Michigan/US/China Exchange Center and former President of the Detroit Chinese Business Association, has watched the connection between China and Michigan accelerate the past 8 years and sees tremendous opportunity for further growth going forward. “Capital goes where it is welcome and stays where it is nourished, with leadership, Michigan can continue to tap the rich cultural, educational and economic vein in China that will create jobs and wealth on both sides of the Pacific.”

Milan Stevanovich, Vice President of Global Strategy for the Detroit China Business Association, believes “we only have just begun” in building the connections with China. He credits the Snyder Administration for understanding the vital importance of relationship building as a prerequisite for doing business in China. “Governor Snyder has done more to cement the bonds with government and business leaders in China than all his predecessors combined” added Milan.

Two Way Bridge: From the Great Lakes to the Great Wall

Michigan has much of what the Chinese want and need. From our automotive know how, autonomous vehicle technology, pristine environment, agriculture products, golf, gambling, tourism, healthcare, investment opportunities and exceptional schools, community colleges and universities — we have it all. We need to continue to market our state on the world stage.

Michigan has done well tapping the automotive and agriculture and university/student pipeline to and from China. There remains great elasticity in these sectors for continued growth. Tourism, healthcare and education expansion at the university level,  tapping the rich vein of technical, community college and especially, K-12 student exchanges are areas that are ripe for expansion going forward.

Currently, Michigan is home to more than 300 Chinese firms, more than four billion dollars in investment, supporting more than 6,000 jobs. China is now Michigan’s third largest export market and is the has the third largest number of Chinese investments among all states, according to Rhodium Group, an economic research firm focusing on U.S./China investment.

A recent New York Times article highlights how Michigan’s and China’s economic futures are as entwined as a bowl of dan-dan noodles: Trump’s Trade War With China Pierces the Heart of Michigan https://www.nytimes.com/2018/07/12/us/politics/trade-war-china-michigan.html

It is not just the auto industry that is being hurt by Trumps trade war tariffs. David Williams, a  67-year-old,  fifth-generation farmer and president of the Michigan Soybean Association laments, “Nobody wins in a trade war.” He continues, “We’re not going to win. China’s not going to win. In the meantime, soybean farmers are just hurting.”

https://www.detroitnews.com/story/business/2018/07/12/michigan-farmers-caught-trade-war-crossfire/760321002/

 

ALL Politics Are Local

Facilitating trust, not only with presidents, ambassadors, and ministers but also at the subnational level, is critical to obtaining a sustainable relationship between the USA and China. Such trust cannot be nurtured through roots of commerce, military tit-for-tat or threatened trade wars.

International issues between our respective leaders dominate the headlines, yet every day subnational leaders quietly lay the foundation of a strong and lasting relationship. What we are collectively building will outlive any world leader momentarily on today’s stage.

I serve on the board of the National Tai Initiative  (TaiInitiative.org) which was created to help build on the opportunity for subnational leaders of both countries to play an active role in shaping a positive outcome for the sake of our two nations, worlds apart but inextricably linked together with the world community.

Michigan’s Governor Snyder has done more to build this strategic and economically beneficial relationship with China than all his predecessors combined. Yet, he is term-limited and leaves office at the end of this year.

 It is important that regardless of who occupies the governor’s office, this important relationship survives and thrives. To allow it to backslide would be a tremendous disservice to both countries. We need to focus on adding and multiplying jobs and investment in Michigan and America – not keep playing the game of division and subtraction currently being played on the national rhetorical stage.

At the national level President Trump’s chest-thumping,  touting “trade wars”, tariffs and anti-immigrant sentiments, outside of the established WTO rules which benefit to both countries since China’s opening  40 years ago, is troubling. While it has some short-term political benefit to his political base of disenfranchised voters, it is unlikely to have any significant long-term economic benefit to working-class people in Michigan/America. Nor does it address the real issue of free and fair trade imbalances. In fact, there is clear evidence it is hurting the auto industry and Michigan farmers.

Furthermore, history shows when you “slap” tariffs on another country, they slap back which leads to a trade war – neither side can emerge unscathed.

My hope is that cooler heads will prevail on both sides of the ocean and we can seek a mutually beneficial, “win-win” solution that will benefit not only the US and Chinese people but all of humanity.

While nationally, there is the talk of building walls at our southern border, up north Michigan is continuing to build bridges that are paying dividends for Americans. We need to keep the momentum going in Michigan as we elect a new governor.

Great bridges can – and will – trump Great Walls.

Tom Watkins has had a lifelong interest in China sparked by a great fourth-grade teacher. He has worked for nearly four decades to build economic, educational and cultural ties between the US and China. He serves on the Michigan-China Innovation Center Advisory Board and is an adviser to the Detroit Chinese Business Association and the Michigan/US/China Exchange Center. He served on the national board of the Tai Initiative.  Tom Watkins is a former Michigan state superintendent of schools and is a regular contributor to the prestigious ChinaUSfocus.com 

website. Follow him on Twitter or contact him via wechat @tdwatkins88. 

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1 Comment

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    Taoqu Chen

    Great points and articulation!

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