After decades of stagnation under the economic and political limitations of communism, China has emerged as a global manufacturing giant — and it hasn’t even attained its full potential.
Recognizing the impact of China’s rise as an economic power on the nation and on Northeast Ohio, the sponsors of the 2008 Commercial Real Estate Deal Maker Forum have selected Jeffrey Bader, senior fellow and director of the Brookings Institution'sJohn L. Thornton China Center in Washington, D.C., as the featured speaker at the ninth annual breakfast presentation. The event will take place on Tuesday, Oct. 21, from 7:30 to 9:30 a.m. in the ballroom of the Renaissance Cleveland Hotel.
Bader was chosen to speak because of his expertise on the far-reaching relevance of this topic to businesses today. “There is so much controversy over international trade with China and all of the issues around the economy and Cleveland’s competitiveness (and, of course, the recent attention focused on China because of the Olympics),” says Craig S. Miller, chair of the public law group of Ulmer & Berne LLP.
“People and businesses in Northeast Ohio obviously have an interest in knowing more about China,” adds Bill J. Gagliano, chair of the real estate group at Ulmer & Berne. “There’s really not a better person, in our view, to explain China’s rise and the related political, economic and security issues to our audience.”
China should be “top of mind” for Ohio businesses for a number of reasons: Today, it is the No. 4 export market for the state, after Canada, Mexico and Japan, registering $1.5 billion in exports in 2007, according to figures from the United States-China Business Council. While that number is significantly less than the $19.6 billion in exports to Canada last year, Ohio’s exports to China from 2000 to 2007 have grown 413 percent, compared to the state’s 57 percent growth in exports to the rest of the world during that period.
Bader, who honed his expertise on U.S.-China relations during his 27-year career with the U.S. State Department, the National Security Council and the United States Trade Representative’s office, will discuss how China’s economic explosion during the past 10 to 15 years creates both problems and opportunities for Americans and for American companies.
“Unless the world retreats into protectionism, where economic and political walls go up, China is going to be with us for some time to come in the foreseeable future,” Bader says. “So we’re going to have to learn how to compete and cooperate with them.”
For his presentation to the Deal Maker Forum, Bader plans to address the elements of China’s meteoric ascension as a global power that fall on the positive and negative sides of the ledger for the U.S. market. On the former side, he cites the growth of U.S. exports to China by more than 200 percent since China joined the World Trade Organization in 2001, which economists estimate has led to the creation of more than 700,000 jobs in the U.S. In addition, China is helping the U.S. finance its nearly $500 billion budget deficit and is helping keep our inflation down through high-volume, low-cost imports.
“Wal-Mart alone relies on roughly $22 billion a year in products imported from China,” Bader says.
There is a downside to China’s growing economy, however. For example, China maintains a $300 billion global trade surplus and, as a result, is taking jobs away from the rest of the world. In addition, China does not aggressively enforce intellectual property rights or product safety regulations, both of which have a negative impact on U.S. businesses and consumers. “For example, China is the source of nearly 80 percent of the pirated products seized by U.S. Customs,” says Bader.
Internally, with an economy that continues to grow at about 10 percent annually, China faces tremendous employment, environmental protection and energy supply challenges, especially since 10 million to 13 million people continue to relocate from the countryside to the cities each year.
China presents a complex conundrum for U.S. businesses to consider.
“Some companies will view them primarily as a threat; others will see opportunities to sell into the China market or for partnering with Chinese companies for investment possibilities,” Bader concludes. “So everyone needs to do their homework, and even if you are threatened, you should still look for the opportunities.”
In the past, the forum, which draws audiences of 500 to 600 — primarily from the commercial real estate brokerage, banking, developer and construction industries, along with public officials and other local business professionals — has focused on important civic issues that affect Northeast Ohio. Previous topics have ranged from economic development in the Great Lakes region to the impact of convention centers and legalized gambling.
This year, however, Bader will provide a provocative, engaging look at an international subject.
“The forum has become one of the best and most well-attended networking events in town,” Gagliano says. “This year’s topic is particularly exciting because a lot of companies in Greater Cleveland are doing business with or considering doing business with China.”