WSCRC

Washington State China Relations Council

Policy Briefing Series: US-China Trade War: Impact on WA State

On October 24, 2018, the Washington State China Relations Council held a session of the Policy Briefing Series titled “US-China Trade War: Impact on WA State” featuring speaker Lori Otto Punke, President of the Washington Council on International Trade (WCIT). The WSCRC Policy Briefing Series provides a venue to speakers who are experts in their respective China-related fields to interact directly with WSCRC’s membership through timely, focused discussions. The series engages leading subject-matter experts from government, industry, law, and technology communities to provide in-depth insights on current key issues in US-China-WA relations.

Lori leads advocacy efforts to increase Washington’s international competitiveness and oversees the management and growth of WCIT. She is also the founder and principal of LOP Strategies, where she helps clients ranging from Fortune 500 companies to small businesses and associations on public affairs, policy and communication. Speaking about the recent NAFTA renegotiation, Lori detailed the revamped dispute mechanism and its implications for domestic laws, as well as international trade obligations. She initiated a comparative conversation on the renegotiated NAFTA and selected provisions of the Trans-Pacific Partnership (TPP).

Lori elaborated upon the progression of the US-China trade dispute. Citing the rationale of the Trump administration, the speakers described the intention as to punish China for past trade transgressions like stealing intellectual property to encourage Chinese companies and government entities to follow norms established by the WTO and other related organizations. As Lori noted, “the devil is in the details” when it comes to managing tariffs and retaliatory measures.

The lively Q&A session involved the experts in the audience, such as Robert Hamilton, Governor’s Advisor for Trade Policy for the State of Washington, and Glen Bachman, Commission President of the Port of Everett. Following an overview of the impacts of tariffs on Washington State’s agricultural sector, the conversation touched upon how American farmers are bracing for possible trade retaliation from China for Trump’s tariffs on steel and aluminum. China imports more than half of annual US soybean exports, which are shipped through Washington State ports. If China cuts back further on US agricultural products during current trade tensions, Commissioner Bachman noted it would take a considerable amount of time and effort to reverse the damage.

WSCRC extends thanks WSCRC Government Affairs Committee member Spencer Cohen for serving as a discussion moderator.

Summary Author: Mengyao Liu

WSCRC Hosts Shenzhen Delegation

On October 16, 2018, WSCRC board members Jim Young, Gregg Rodgers, and Norwell Coquillard met with a business delegation from the city of Shenzhen in Guangdong Province to introduce the mission of Washington State China Relations Council and to discuss opportunities for international economic collaboration. The delegation included representatives from government and businesses in Shenzhen, one of Seattle’s Sister Cities.

Jim Young, Co-Managing Member and Founder at Century Law Firm, spoke about the opportunities for investment in Washington State, citing multiple examples from the real estate industry and the vibrant startup environment in many cities. He also reflected upon his own experiences as a Chinese-born attorney who came to Washington State for its international reputation and the process of building his business.

Gregg Rodgers, owner in the Seattle office of Garvey Schubert Barer, detailed the longstanding history between Washington State and China. He elaborated upon WSCRC’s leading role in establishing economic and cultural ties through its work in facilitating delegations and making connections between businesses. In addition, he cited his personal involvement in normalizing trade relations between the US and China following reform and opening, led by Deng Xiaoping.

The delegation was impressed by the scope of the Council’s reach in Washington State, as well as with its purpose of fostering international ties between the US and China. After a round of introductions from each member of the delegation, the gathering commenced networking and exchanging information for future partnerships.

Summary Author: Mengyao Liu

Book Talk with Benjamin Shobert, Author of Blaming China: It Might Feel Good But Won’t Fix America’s Economy

On October 11, 2018, the Washington State China Relations Council held the ninth session of the Policy Briefing Series featuring Benjamin Shobert, author of Blaming China: It Might Feel Good But Won’t Fix America’s Economy. In the book, Benjamin described American society as angrier, more fragmented, and more polarized than at any time since the Civil War. He identified deep insecurities about our economic future, our place in the world, our response to terrorism, and our deeply dysfunctional government as contributing to current trade tensions between the US and China. Benjamin is the Managing Director of Rubicon Strategy Group. He is also a Senior Associate for International Health at NBR, where he advises and contributes to NBR research programs on international health in Asia.

Benjamin argued that unless we address an array of domestic issues in the United States, a disastrous chapter in American life is right around the corner. Reflecting on the state of US-China affairs in the present day, Benjamin expressed concern that many Americans may decide that conflict with China is an avenue to secure their economic futures. After framing how the American public thinks about China, Benjamin offered two alternative paths forward. He also proposed steps that businesses, governments, and individuals can take to potentially stop and reverse America’s path to worsening relations with China.

Addressing concerns regarding globalization’s impact on the American economy, Benjamin emphasized that the US-China relationship matters because it has historically benefitted both countries. Citing examples from the twentieth century, Benjamin questioned whether commonly held assumptions such as the inevitability of peace, inter-connectivity breeding mutual reliance, and the folly of war prove applicable in assessing the US-China relationship. He explained how many of the issues raised during President Trump’s 2016 campaign, particularly national anxiety about a rising China, are misplaced. According to the book, China has become an easy target for Americans to project their frustrations with the overall political dysfunction, economic difficulties, and foreign policy blunders since 9/11, much of which in fact has more to do with domestic problems in the United States than with China.

A lively Q&A session followed Benjamin’s book talk. Questions from attendees addressed the possible policy implications following a US-China trade war, as well as the implications of further tariffs issued on imported goods from China. During Q&A, Benjamin cited his own experience traveling to China for the first time early in his career and his own learning process in the field.

WSCRC extends thanks to WSCRC Pearl Member Spencer Cohen for serving as moderator for the event.

Summary author: Mengyao Liu

NCUSCR CHINA Town Hall

On October 9, 2018, the Washington State China Relations Council, in partnership with the National Committee on U.S.-China Relations, held the annual CHINA Town Hall featuring speakers former U.S. Secretary of State Condoleezza Rice as national webcast speaker and local speaker Andrew Batson, China Research Director at Gavekal Dragonomics, an independent economic research firm with offices in Hong Kong and Beijing. CHINA Town Hall is a national conversation about China that provides Americans across the United States and beyond the opportunity to discuss issues in the relationship with leading experts. It took place at 100+ venues across the United States and Greater China.

Condoleezza Rice served as the 66th Secretary of State of the United States, the second woman and first African American woman to hold the post. During the interactive webcast discussion moderated by Stephen A. Orlins, President of the National Committee on U.S.-China Relations, she spoke about her personal experience working in China as the Secretary of State under President George W. Bush. She highlighted the benefits of free and open trade with China, including economic growth, increased innovation, and enhanced exchange under a rules-based system. In answering a question about the current trade tensions between the United States and China, she emphasized in importance in reciprocity. Speaking about her own experience with the National Committee on U.S.-China Relations at the beginning of her career, she noted that NCUSCR was pivotal in shaping her understanding of China.

Andrew Batson’s presentation focused on the future of economic ties between China and the United States. Assessing the aims of President Trump’s administration in issuing tariffs and heightening trade tensions between the two nations, Andrew noted that volatility in the Chinese economy began to occur before the tariffs were announced. According to his research, exports remain a large portion of China’s economy, but their market dominance is declining. He pointed to similarities between the American and Chinese economies in that they are both dependent on domestic demand, as opposed to exports. In his concluding remarks, Andrew stated that if the trade war is a negotiating tactic, it is not likely to succeed. But increasingly, it appears to be an opening move in a long-term strategy to disengage the economics of the United States and China.

A spirited Q&A session followed Andrew’s presentation. Questions from attendees addressed how the trade conflict will affect business in both the United States and China, as well as implications for the Belt and Road Initiative. Andrew drew from his extensive research on the Chinese economy and detailed his projections by industry, discussing tech, agriculture, and consumer goods.

WSCRC extends thanks to WSCRC board member Sean Connell for serving as a moderator for the event and for WSCRC board member Nelson Dong at Dorsey & Whitney LLP for providing the venue.

Summary author: Mengyao Liu

Corporate Executive Briefing Series: Doing Due Diligence in the China

On October 4, 2018, the Washington State China Relations Council held its fifth session of the Corporate Executive Briefing Series, featuring Dane Chamorro, Senior Partner at Control Risks Asia Pacific business. A former US diplomat, Dane was previously Director of Global Risk Analysis for the Asia Pacific region and Managing Director of the company’s North Asia business, encompassing Greater China, Korea and Mongolia. The Corporate Executive Briefing Series is a series of conversations which aims to provide a unique venue in which Washington business owners and executives can substantively increase their knowledge of commercial engagement with and in China.

Control Risks is a specialist global risk consultancy that helps organizations succeed while remaining secure, compliant and resilient. Drawing from his extensive experience working throughout China and Asia for Control Risks, Dane discussed how President Xi Jinping is altering the Chinese economic and political landscape in a manner that emphasizes a Party led, regulatory driven model governing data, capital, social control. This “alternate ecosystem” will require foreign operators to adapt to new rules, and standards. Using the example of increased steel production in provinces outside of Beijing’s vicinity despite regulatory pressure, Dane explained the motives and targets of the Chinese government’s massive reorganization led by President Xi.

In terms of foreign involvement in China through businesses, investment, and other avenues, Dane cautioned that trade conditions will worsen before they improve as the US-China trade dispute unfolds. He cited a few specific ways in which US companies will be impacted, concluding that foreign manufacturers are likely to benefit in the short term and see some business growth. However, multinationals will remain disadvantaged in the longer term as they are unlikely to have equal opportunities as local competitors, given the national and local resources and support that local Chinese companies can access, and the operational and regulatory obstacles that foreign companies are facing.

The Q&A session addressed the changing role of due diligence in the China market during this moment in US-China relations, as well as the experience of US businesses working with Chinese partners. In answering an audience question about precautions companies should take before doing business in China, Dane called attention to the need for a comprehensive appraisal of a businesses and prospective partners, especially to establish assets and potential liabilities.

WSCRC extends thanks to WSCRC board member Sean Connell for serving as a moderator for the event.

Summary author: Mengyao Liu

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