American CEOs & Government Leaders On Doing Future Business In China

Without a doubt, after Covid-19 there’s a divergence between American business and foreign policy interests on doing future business in China

This story was put together in the aftermath of a recent meeting between CEOs and some US government leaders in California. Though, I am outlining the entire story, using a variety of the best sources to complete the full picture.

Before carrying on with this story I feel the need to share a little about myself. Because I lived in China for some years and went to Shanghai for the first time in 2013 — and I’m proud to have hit my 10-year anniversary this year!

I know a little about China’s economy, history, language and culture, since I did a Master’s Degree in Shanghai on China Studies.

I also was one of the spokespeople about the Industry 4.0 push into China, also known as the Fourth Industrial Revolution (4IR), particularly from a European-Chinese business partnership standpoint in 2018.

Now that I got that out of the way (and I hope you didn’t mind) let’s brush out the details of this story about American CEOs and government leaders on doing future business in China.

In response to the murder of CashAPP Founder Bob Lee, Elon Musk said:

“Violent crime in [San Francisco] is horrific and even if attackers are caught, they are often released immediately.”

From his statement we can draw the conclusion that he is framing the issue around standards of crime and punishment. But how about the evolution between politics and technology and how their impact on society is fueling hatred between people and leaders?

Perhaps this is what the CEOs visiting with United States’ government officials in California should have been discussing with one another in the high-level meetings held earlier this. But that was not the case.

For instance, Representative Ro Khanna (D-California) told reporters about the upcoming meeting with CEOs and how it will focus on the agenda set forth by the Select Committee on the Chinese Communist Party (CCP).

In response to questions about the agenda, she said:

“I would like to see more of our electronic production come here to the United States. For display screens, for micro-electronics, for semiconductors, for the component parts of our smartphones, and that is a conversation we’re going to have. How do we do it today? What do they need from the United States government to be able to do it.”

Rep. Khanna is framing the discussion around the electronics industry of the future. In other words — Who will control and profit the most from surging imports to the United States?

Chairman Mike Gallagher (R-Wisconsin) took it a step further, by indicating how China’s rise is a growing threat to United State’s national security interests, “We want to make sure that the power of the Chinese economy is not seducing certain companies into betraying American values.”

Mike Gallagher is chairman of the House Select Committee on China, wherein he is becoming one of the leading voices on Chinese censorship in American-produced films and entertainment. According to an interview with LA Times, American studios in Hollywood are coming under pressure from government leaders to rethink the way they produce films for the Chinese market.

He took a serious tone when discussing the ideological competition between United States and China:

“It can promote anti-American messages. What we don’t want, but what the CCP ultimately wants, is for the CCP-approved version of the movie to become the only version and that’s a bright red line that we should work to enforce.”

On the subject of American CEOs and government leaders doing future business in China, I will outline some of the key messages conveyed by the latest public hearing on the national security implications of the US-China relationship.

US Secretary Janet Yellen gave a speech about the United State’s current foreign policy objectives, with the main focus on its relationship with China. The speech was held at the John Hopkins School of Advanced International Studies (SAIS) on 13 April 2023. Read the full transcript here.

As you can imagine, reporters, journalists and analysts of all kinds were madly writing on the subject before and after the speech. After reading through much of the content, it seems that most of them have agreed on three takeaways from the speech:

1. prioritizing national security and defending human rights,
2. promoting a healthy and fair economic relationship with China
3. and cooperating with China to address global issues.

However, on the opinion side of things it gets a lot more complicated.

Like when Yellen said: “China’s economic growth need not be incompatible with U.S. economic leadership … We do not seek to ‘decouple’ our economy from China’s. We believe that the world is big enough for both of us.” This caused Robert Kuttner to believe that, since Yellen had denied targeting China’s economy, that the Biden administrations was seemingly playing what he called a “nice cop/bad cop strategy.”

For instance, by taking down China’s capabilites in advanced semiconductors, the Biden administration made a red line, that it would not tradeoff US national security concerns for the chip supply chain. Because of this, Kuttner concluded that the Biden administration still needs an effective China policy — e.g., “better coherence and coordination among U.S. allies — and inside its own house.” The American Prospect

CGTN is a Chinese media source. They wrote up their piece after the speech called “U.S. no decoupling from China’s economy”. Reporting for CGTN, Nathan King illustrated some of the Chinese media’s ambiguity on US foreign policy interests by discussing Yellen’s speech in tandem with the national security hearings with TikTok’s CEO.

Like what Yellen said:

“Even as our targeted actions may have economic impacts, they’re motivated solely by our concerns about our security and values. Our goal is not to use these tools to gain competitive economic advantage.”

CGTN’s Nathan King responded with comments about the TikTok hearings:

“Some of those national security concerns are ill-defined and easily disputed…Actions speak louder than words and what Beijing will want to see concrete action…trade tariffs and some movement on all the embargos from chips to copper and beyond.”

But I must say that the opinion that got my attention the most was from Andrew Stuttaford.

The journalist starts by giving the latest figures from the American and Chinese trade of exported goods. According to the figures, the US imported $536 billion from China, while exporting $154 billion to China. He notes that this trade margin is much higher than the one for Canada, Mexico and the European Union. For this reason, he asserts that decoupling is not happening in de-facto trade relations between the US and China.

Adopting a phrase of “conscious uncoupling” Stuttaford argues that the US should and must decouple from the Chinese economy in order to avoid future dilemmas posed by supply chain disruptions in the global economy. But he also carefully draws out the concept of “friendshoring” and what it should mean in the context of future US-China trade relations — e.g., “friendshored” could mean that China continues to manufacture plastic toys for the American market. National Review

While I was delighted to read this op-ed from National Review, my concept of this nascent “friendshoring” in making trade relations would not have anything to do with who gets to make plastic toys.

As the world is immersed in the digital era, I don’t think plastic toys are going to be high on the minds of most American CEOs and government leaders on doing future business with China. I would question whether, in the near-future, if American children will even continue playing with toys at all. I have lived in both Asia and Africa and every time I have been struck with how insignificant toys play a role in these societies. Yet, every kid who has a phone watches videos and downloads apps like crazy!

Doing future business in China revolves around a new era of Industry 4.0 leadership. This will determine how the future generations of leaders will behave from a variety of aspects.