40 Years May Well Have Been a Light Year in US China Relations

Download this podcast
Length 11:11
Download audio file (20110602_kissinger.mp3)

I had the pleasure of listening to Former US Secretary of State, Dr. Henry Kissinger speak this week. He reflected on his new book On China and the 40 years of relationship building with China, some refer to this as the ultimate in Guanxi. OK, I buy that, and its a high standard set by a man who has dined with generations of Chinese leaders, influenced policies in both countries and, through his work, enlighten the societies that were so vastly different when he first set foot in China to secretly meet with officials in July 1971,

At Technomic Asia we try to steer clear of politics, but the realities are that opportunities for business are more clearly visible by understanding politics. That was the case 40 years ago as the Chinese and Soviets were at odds, a situation that the US bet provided an opening to plant the seeds of US values. Among those values, the benefits of a capitalist economic model and the opportunities it provides to the society that embraces those values.

In retrospect, the first 30 years of this US China relationship was about understanding these benefits and working them into a unique political and economic system in China. The last 10 years was in some ways the dynamic growth of the seeds planted in the 1970s by the dialogue with the United States across several political administrations. Ive seen companies struggle with the decision to establish a presence in China because their senior leaders ability to envision the future was cloudy. That is less the case tod! ay.

< p>Ive painted the picture for company managers of what could be in China more than a decade ago when the roots of economic growth, joint venture ownership, and consumer spending where just taking hold. Today, as I engage in a dialogue with business leaders, the ability to predict their future may be just a daunting as in the past, but the landscape in which their future will unfold is not. The GDP per capita has increased several fold in China since 1970. The middle class is equal to the entire population of the United Sates. Make no mistake I tell them, the taste of consumption, the attention of the world, and the increasing expectations of Chinas citizens support a landscape of growth.

The question for US business is how they will participate. An American Chamber of Commerce in Shanghai survey of executives of US companies doing business in China in 2010 revealed their success. Among the results, 87 percent of US companies reported revenue growth in 2010 up from 47% in 2009 and 61 percent of US companies said they gained market share in 2010 up from 40$ in 2009. These are snapshots of a larger picture that beckons strategic business leaders to China in a way that even Dr. Kissinger didnt envision forty years ago.