The appearance of billionaire businessman icon Elon Musk in Beijing this week underscores the continued importance of China’s market to the United States amid geopolitical and military tensions between the two countries, as well as the key role of businesses in China-US relations, according to the US Chamber of Commerce. China Chief of Commerce Michael Hart said in an interview.
“Over the past three years, (it’s been) very clear when the US and Chinese governments weren’t talking to each other, the business community continued to play a very vital role in making sure that trade and discussions continued.” Hart said, speaking by Zoom after returning to Beijing following a “knock on door” visit by twelve chamber members to Washington, D.C. earlier this month. AmCham China has nearly 1,000 members including Apple, Merck, KKR, Morgan Stanley, Microsoft and Intel.
Some of the more common topics raised during the trip included national security and whether the “engagement” between the United States and China in the past four decades had not worked from the American perspective. “One of the things we’ve talked about is whether doing business with China is a failure,” Hart said. “I do not agree.”
Even amid China’s slower-than-expected GDP growth this year, many American brands that were considered luxury goods not so long ago have now become everyday items in the world’s No. 2 economy — an advantage for American companies that don’t necessarily show up in trade, Hart said. , who will become president of the American Chamber of Commerce in China in 2022. Tesla, while not necessarily affordable to many, is itself a widely recognized American brand in China, in part due to its early global presence in the electric vehicle market And its large manufacturing center is in Shanghai. CEO Musk met with Chinese Foreign Minister Chen Gang on Tuesday, and the two talked about trade and business issues, according to a statement from the ministry.
And while travel remains disrupted by Covid-era flight cuts this year, the decades-long opening up of education and other exchanges between the United States and China has provided far more Chinese information than they may not get from the Chinese press. “If there is something negative in the Chinese media about the US, it is the millions of Chinese students who have studied in the US or others who have traveled, who come back and say it wasn’t my experience.”
He continued, “In China, there are millions of people who work for American companies or have worked with American companies here and they also say, ‘I had a good job or career. I worked for an American company that invested in me. ”
Of course the US-China trade imbalance persists and China has not adopted all US-led norms. Be naive at first,” Hart said.
“We have to admit that China is our main strategic adversary, and during the trip, many conversations about national security have ended, or are heading towards national security – whether we’re talking about technology or data, or other areas such as life sciences (and) biosciences,” he said. Without.
The solution is a broader national interest in the United States in trade with China, and greater efforts to protect American technology and intellectual property, suggested Hart, a native of Kansas City, Missouri, whose career in Asia spanned more than a quarter-century after landing in Taiwan in 1996. The University of Missouri Columbia graduate moved to mainland China in 2003 and was an executive at JLL in both Shanghai and Tianjin before setting up his own company in Tianjin in 2019 and joining AmCham China last year. “We have to keep the trade end of this, we have to keep the trade going,” he said, given China’s size and global importance.
“One of the things that has kept the Chinese at the negotiating table with the United States is that they understand that trade is critical,” Hart said. During Covid, he said, both the United States and other countries acted “as a barometer of what’s going on in the economy, and they’ve been telling the Chinese government constantly that the system is stressing business and stressing the economy.” Hart added that this kind of partnership with other foreign companies in China is crucial to the future success of the United States in the country.
To this end, American companies visiting Washington encouraged officials to rebuild communication mechanisms between the United States and China, whether at the government level, think tank, or individual level. “You guys need to go back to China, you need to talk to China more, you need to go visit China,” Hart told the DC leaders. “You can’t sit aside and comment on something you haven’t seen in three years that may no longer be what you think it is. We also encouraged the re-initiation of interpersonal exchange.”
“My big fear for the US-China relationship is: Who will be the next generation of sinologists in America? We don’t have a lot of students here and we want American students to come to China,” said Hart. The short-term problem is that there are fewer flights between the two countries. And ticket prices are higher than pre-pandemic levels.”We need more flights,” he said.
China’s recent crackdown on US companies involved in due diligence, Hart said, is “small, but deeply troubling.” There is not enough transparency about why these companies are being investigated. It appears anecdotally that these companies engage in due diligence and information gathering for consultations.” (See related post here.) Bain, Mintz and Capvision were reportedly targeted.
“Our message to anyone who will listen to us in the Chinese government is if you want foreign investment, or if you want companies to continue to operate successfully, they should do their due diligence on potential investment partners or investment projects,” Hart said. . “Economic information and competitive information are essential for business. You can’t say you want foreign investment and block information. These two things don’t go together.”
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