The appearance of billionaire entrepreneur icon Elon Musk in Beijing this week underscores the continued importance of the Chinese market to the United States amid geopolitical and military tensions between the two countries, as well as the key role of businesses in Sino-American relations, Michael Hart, president of the American Council on Business in China, said in an interview.
“In the last three years, when the U.S. and Chinese governments have not been talking to each other,[the business community continues to play a very important role in ensuring that trade and dialogue continue],” he said. He spoke via Zoom after returning to Beijing after “door-knocking” in Washington, D.C., by dozens of council members earlier this month. AmCham China has nearly 1,000 members, including Apple, Merck, KKK, Morgan Stanley, Microsoft and Intel.
Some of the most recurring topics during the trip were national security and how the US-China “relationship” has failed from an American perspective over the past four decades. “One of the things we talked about was the failure to engage with China,” Hart said. “I don’t agree.”
Even with slower-than-expected growth in China this year, many U.S. brands that were once considered luxuries have long since become everyday goods in the world’s No. 2 economy — which is not necessarily a business for U.S. businesses, said Hart, who is set to become Amcham’s China president in 2022. . Tesla, although not necessarily affordable to many, is itself a well-known American brand in China. CEO Musk met with Chinese Foreign Minister Qin Gang on Tuesday and the two discussed business and trade issues, according to a ministry statement.
Although the trip was disrupted this year by VV-Air flight cuts, the opening of educational and other exchanges between the US and China over the past decade has provided more Chinese information than you can get from the Chinese press. If there is anything negative about the United States in the Chinese media, there are millions of Chinese students who have studied in the United States or others who have traveled and come back and say this is not my experience.
In China, he continued, “there are millions of people who work for American companies or have worked with American companies who have said: ‘I had a great job or job.’ I worked for an American company that invested in me.’
“Of course, the US-China trade imbalance continues and China has rejected all US-led measures.” This can be challenging. But I think anyone who thought that China was going to be another America after America was probably naive to begin with,” Hart said.
“We have to accept that China is our main strategic rival, and during the trip, many discussions ended up on national security, or towards national security – if we are talking about technology or data, or others like life sciences (and) biosciences,” he said.
The solution is a broader national focus on U.S. trade with China and greater efforts to protect U.S. technology and intellectual property, said Hart, a native of Kansas City, Missouri, whose career in Asia has spanned more than a quarter of a century. A 1996 graduate of the University of Missouri-Columbia, he moved to mainland China in 2003 and was an executive at JLL in both Shanghai and Tianjin before establishing his own company in Tianjin in 2019 and joining Amcham China last year. Given China’s size and global importance, he said, “we have to keep up the business end of this, and we have to keep trading.”
“One of the things that has brought the Chinese to the table with America is that they understand that trade is critical,” Hart said. Both the U.S. and other countries have “acted as a barometer of what’s going on with the economy,” he said, “and they’ve been constantly telling the Chinese government that the system is squeezing business and squeezing the economy.” Such partnerships with other foreign companies in China are critical to America’s future success, Hart added.
To that end, U.S. companies on a visit to Washington encouraged officials to build mechanisms for U.S.-China relations at the government, ideological or individual level. “You guys need to go back to China, talk to China more and visit China,” Hart told the DC leaders. “Because you haven’t seen it in three years and maybe you can’t sit on the sidelines and comment. We’ve encouraged the human exchange to start again.”
“My greatest fear for US-China relations: Who will be the next generation of US-China scholars? We don’t have many students here and we want American students to come to China,” Hart said. The short-term problem is that flights between the two countries are below pre-pandemic levels and ticket prices are high. “We need more flights,” he said.
Recent Chinese actions against U.S. businesses that have engaged in due diligence are “small but very concerning,” Hart said. “There is not enough transparency as to why these companies are being investigated. It seems to be a coincidence that these companies engage in due diligence and information gathering. (See related post here .) Bain, Mintz and Capvision were reportedly targeted.
“The message we’re sending to everyone in the Chinese government is that if they want foreign investment or if they want companies to continue to be successful, they need to do their due diligence on investment partners or investment projects,” Hart said. . “Economic information and competitive information are critical to business. You can’t say I want foreign investment and block information. Those two things don’t go together.”
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