April 5, 2018
Much of the press coverage on the current state of U.S.-China commercial relations is focused on competition, and not enough on the market for American goods and services.
China as a competitor has been dominating press headlines for years. Candidates seeking high office in the United States have been informing voters that China plays unfair, doing business there makes little sense and the only solution is tough action. Numerous political columnists use China to score easy points and advance one-sided protectionist remedies.
Years of one-sided opinion is having a negative impact on U.S.-China commercial relations and is fostering a tit-for-tat retaliatory tariff environment.
In the United States, Pew Research reports negative views of China have increased by 26 percentage points between 2006 and 2016. And American negativity towards China has been higher than Chinese negativity toward the United States in every year since 2014.
A January 2017 Pew Research survey of Americans found that 65 percent of respondents said China is either an adversary (22 percent) or a serious problem (43 percent), while only about a third (31 percent) said China is not an issue.
And in a separate Spring 2016 survey by Pew Research, a majority (55 percent) of Americans held an unfavorable opinion of what more and more Americans see as our most significant Asian rival.
This hostile environment is the public affairs reality that American business is facing right now.
Many Americans now see China, one of our most significant and most promising markets, as a loser for US business. Unfortunately, this belief is fertile ground for politicians supporting protectionist policies and trade halting tariffs. Actions that if successfully passed would force Beijing to respond with retaliatory trade tactics including increased limits stifling full access to the growing Chinese consumer marketplace for American goods and services.
It is time for those that care about a productive and engaged US-China commercial relationship to take these polls seriously and engage Americans in Main Street coffee shops and at picnic tables during backyard BBQs.
For far too long American business has relied on a model dependent on high-level government relationships with support from the White House and corresponding federal agencies to manage the U.S.-China relationship.
This model is exhausted and broken.
The Congressional Research Service reports total U.S.-China merchandise trade rose from $2 billion in 1979 (when China’s economic reforms began) to $636 billion in 2017. China is currently the United States’ largest merchandise trading partner and our third-largest export market behind Canada and Mexico, our neighbors and NAFTA partners.
According to the U.S. State Department, American companies exported $135 billion in goods to China in 2017. Exports sourced, developed and packaged from across the nation.
Thirty states experienced at least triple-digit goods export growth to China since 2006, and four states saw an increase of more than 500 percent over the same period: Alabama, Montana, North Dakota, and South Carolina per the U.S.-China Business Council’s State Export Report. USCBS concludes every U.S. state has experienced triple-digit services export growth to China since 2006, with 16 states enjoying the export growth of more than 400 percent.
At a grassroots level, it is critical to remind Americans that U.S. goods and services exported to China come from a wide range of industries. Goods such as transportation equipment, agriculture products, computers and electronics, and chemicals. These exports also sustain logistics jobs in America’s ports and warehouses throughout the country. Also, U.S. services exports come from the travel, education, and transportation sectors as well as professional business and financial services.
Leaders of American business need to play a more decisive role in reversing this trend and ensuring American goods and services reach the ever-expanding Chinese marketplace. Sitting on the sidelines will be too detrimental for America’s economic security.
Marc A. Ross is the founder of Caracal Global and specializes in global communications and thought leader management at the intersection of politics, policy, and profits. Working with boardrooms and C-Suite executives from multinational corporations, trade associations, and disruptive startups, Marc helps business leaders navigate globalization, disruption, and American politics.