“China’s development is blessed with a rare period of strategic opportunities. And if we don’t grasp it, it will slip away,” said Wen Jiabao, giving a speech at Harvard in December of 2003. “We are determined to secure a peaceful international environment and a stable domestic environment in which to concentrate on our own development, and with it help promote world peace and development.”
The premier’s visit on December 10 comes as China is again at the center of the world stage. The previous day, Wen met with Bush over matters that included China’s deteriorating relations with Taiwan and the at least $100 billion trade deficit the United States faces with China. In his remarks at HBS, Wen acknowledged the trade imbalance, which has received criticism from U.S. labor and business organizations for costing American jobs, and last month led to the U.S. slapping limits on some Chinese textile imports and duties on some televisions. “We have to recognize the fact that in the trade relationship the United States does run a quite significant deficit with China,” Wen acknowledged. But, he added, U.S. exports to China grew 15 percent last year and 26 percent in 2003.
Chinese purchases increasing
An upcoming Chinese trade mission to the U.S. will result in the purchase of cotton, wheat, and soybeans, part of $10.7 billion in contracts China is signing for U.S. products. Wen recounted that China has just bought planes from Boeing for $1.7 billion and jet engines from General Electric totaling $3 billion.
Wen Jiabao
“To cut back China’s exports to the U.S. market is not a good solution,” he said. “The better solution is for the U.S. to increase its exports to China.” A high-level team will look at the trade conflict, Wen added, whose membership will include China’s Vice-Premier Wu Yi, U.S. Commerce Secretary Donald Evans, and U.S. Trade Representative Robert Zoellick. In prepared remarks titled “Turning Your Eyes to China,” Wen discussed the cultural, geographic, and social developments that have shaped the 5,000-year-old civilization and made it today the largest developing country in the world.
The last twenty-five years in China “a time when China has moved from a centrally planned economy to one more market driven” has produced huge transformations, Wen said. For example, Chinese citizens are now free to travel as they like, pursue the careers of their choice, seek information, and practice freedom of religion. “There’s no question that to develop democracy”the objective of our endeavor – all our efforts will be aimed at building China into a prosperous, democratic, civilized, and modern country,” the premier said. He also discussed the responsibility of being the government leader for a population of 1.3 billion people. “Any small individual problem multiplied by 1.3 billion becomes a big, big problem. And any considerable amount of financial and material resources, divided by 1.3 billion, becomes a very low per capita level. This is a reality the Chinese leaders have to keep firmly in mind at all times.” [1]
Those with long memories (not that long) will remember the government whining as the Japanese ascendended to prominence in US trade. Business was asleep at the wheel at that point, so it was obvious what to do. Business was seeking and got a level of protection, which over time has come unwrapped.
Here, ChainLink does not expect the Chinese to do much; nor the US government, since this is a pro-business migration. Business is calling the shots this time. How effective American labor will be at influencing protectionism on jobs “always a dicey strategy” will not be felt till after the Presidential elections, at the earliest.
And China has its pride, after all. We continue to witness Chinese saber rattling stance on Taiwan, “China will stick to the principles of “One Country, two systems” and “peaceful reunification” on the Taiwan issue, but will never tolerate Taiwan independence,Central Military Commission Chairman Jiang Zemin said Thursday January 15th, in a meeting with our General Myers. Since the War on Terror, the US has sought to play war games with China to protect Asia from terrorism. (Or so the story goes.)
On an issue we can all agree about (except bin Laden), President Pervez Musharraf is leveraging his better global ties to improve the economic and political lot of the majority of Pakistanis, who so desperately need to join the modern world, “The Asian Development Bank (ADB) will lend 800 million dollars to Pakistan this year to improve the country’s infrastructure and social services. The program will cover projects in rural development, resource management, environment, road construction, sub-regional connectivity and restructuring of technical education and vocational training. Of the total loan, about 222 million dollars will be lent under an Asian Development Fund (ADF) window at rates of interest ranging from zero to 1.5 per cent, the ADB stated. [2]
This positive announcement comes after the SAARC Summit at Islamabad, at which Indian Prime Minister Atal Bihari Vajpayee met Pakistan President Musharraf, and the two countries decided to begin dialogue on peace in Kashmir, as well as other issues. They are building their respective diplomatic corps in each other’s countries and intend to meet again in February. If only we could hear such news from the Middle East!
On the India front, the main obstacle to full steam ahead in outsourcing all the worlds call centers appears to be close to being removed. Americans are incensed by the lack of privacy laws in India, but the reality is, there are no US laws restricting shared data. However, the European Union has such laws, presenting the global ascendancy of India’s place in information services. India’s Ministry of Information Technology and the National Association of Software and Service Companies (Nasscom) in New Delhi expect new legislation to be in place early next year. It would provide legal safeguards to ensure data privacy protection in India, according to Nasscom President Kiran Karnik.
So, Asian future continues brightly, as they gain market share on a global basis, in manufacturing, IT and professional services. In the end, it is their people that are their product, and their governments understand this and are responding. They are positioning themselves for a growing future – free of war, highly educated, and open for business!