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It is not easy to define in only a few words the complexities of international trade and the synergies of success between untold numbers of Tennesseans and their counterparts in China.
For many years, cotton exports through Memphis firms have maintained Tennessee as one of the largest suppliers of goods to China. While Tennessee cotton exports have recently declined, as many as 20 Memphis-based companies are actively working to expand other business with China.
Two companies here in Memphis have already done so — FedEx and Medtronic. Their stories help “connect the dots” when it comes to understanding the benefits of global trade.
For example, the first thing I saw when landing in Tokyo en route to Beijing was a FedEx jet.
The first thing China’s Vice Minister of Foreign Affairs said when we met and he saw Memphis on my business card was, “Ah, Federal Express.”
The company has become the symbol of global trade around the world, and it employs more than 34,000 people in Tennessee.
Leaving the airport upon my return to Memphis, I pass the local headquarters of Medtronic, which I am told is FedEx’s largest customer in Tennessee.
Medtronic has over 1,700 employees in Tennessee and more than 800 employees in China.
It is the market leader in China for cardiac rhythm management, cardiac surgery, diabetes and neurosurgical technologies. Medtronic has provided lifesaving therapies to more than 500,000 in China.
My first morning in Beijing, I met with Medtronic’s Director of Greater China Healthcare Economics, Camon Sin. According to Sin, the medical device industry in China is at a crossroads.
The Chinese government is undertaking health care reform there, too, and China’s National Development and Reform Commission may be about to impose extremely restrictive price control measures that discriminate against multinational corporations in favor of domestic manufacturers.
Protection of proprietary information and lax domestic regulatory enforcement by the Chinese is a concern for any U.S. Company attempting to compete.
Yet the “momentum of expansion” in China is great, according to Sin. China represents only 2 percent of global sales, and the potential seems unlimited.
Last year, Medtronic announced an agreement to form a joint venture with Weigao to market therapies in the spine and orthopedics sector. Weigao, based in the Shandong Province of the People’s Republic of China, is the leading manufacturer in China of medical devices and single-use consumables.
The joint venture will market Medtronic’s spinal products and Weigao’s orthopedic products which include therapies for the hip, shoulder, spine and trauma.
This is good for Tennessee.
Medtronic’s total expenditure in Tennessee for the 2009 fiscal year was $117 million, which includes all trade vendors. Seventy-nine percent of Medtronic’s direct suppliers in Tennessee are small businesses. Not to mention more than $1.5 million Medtronic has donated to charities in Memphis.
Doing business in China has been good for these companies, who argue that it has also been good for Tennessee. Concerns over increased trade with China are often borne largely of misunderstanding and are often misplaced. The global economy has changed dramatically in the last decade and, as it continues to evolve, so must we adapt and seize the opportunities which lie ahead.
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Shanghai is 667 miles from Beijing. We arrived by air from Beijing around noon on Friday.
The population is a staggering 20 million souls. It is divided by the Huangpu River along the banks of which rise dozens of futuristic skyscapers. Shanghai is also home to the world’s second tallest building (and the tallest in China) – the World Financial Center at 1,614.2 feet. On one side of the Huangpu stretch the 19th-century structures known as “The Bund” – buildings once home to British and “other Imperialist” (as my guide calls them) nations’ financial institutions. Today they house shops and restaurants. On the opposite bank, in what only 10 years ago was literally a rice field, rise dozens more skyscrapers.
Shanghai will be host to the World Expo in 2010, and the city is festooned with reminders of it. A businessman I meet from the United States tells me they call this city “Disneyland.”
I will be meeting with International Paper Asia. The Arkansas leadership will be meeting with Cooper Tire. They are especially concerned about recent U.S. tariffs on tires and China’s interest in reciprocating on chicken.
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On the front page, above the fold, of today’s China News Daily is President Hu Jintao reviewing the troops during yesterday’s 60th Anniversary Parade which I attended. The headline: “Day of Glory – New China shows its pride to the world.”
After several days of meetings with various officials and tour guides during which we heard repeatedly about the “New China,” yesterday’s 60th Anniversary celebration was an attempt to drive home the point that, like the Buick ads of yore, “this is not your father’s China.”
(Although my father served in World War II, my father-in-law served during the Korean War. He is curious to learn what, if anything, has changed inside the land of North Korea’s ally).
I’m not so sure. If this is the New China, why the decidedly Cold War spin in the aftermath of yesterday’s celebration? (For you bloggers, this — like many others in my posts — is what is known as a “rhetorical question”).
In the minds of many of us in Tennessee, this photograph is, indeed, not only the image, but the reality, of Communist China.
I am now onboard our flight to Shanghai, and what is being shown overhead is a replay, not of yesterday’s parade, but the same parade in 1949 when Mao stood in Tien’Anmen Square at the same podium as yesterday’s Hu, to declare this the People’s Republic of China. The military parade, right down to the goose-stepping troops and overflight of military aircraft, was identical.
There were, of course, some notable differences. Like the nuclear ICBMs rolling by and photo footage of mushroom clouds broadcast over giant television screens.
Today’s New York Times reports that China remains “wordless” about the atrocities committed by Mao during one of the sieges that led to his triumphant entry into Tiananmen Square 60 years ago. Starvation was Mao’s weapon of mass destruction. More than 150,000 Chinese civilians were starved to death in one city.
Those who survived this Asian holocaust ask why was there no acknowledgment yesterday of this aspect of China’s past? Why not even a symbolic 60 seconds of silence?
Is it because the past, here, too, is prologue? Or because it is not the past at all but an ongoing reality?
Whichever, we are faced with a challenging dichotomy between the need to embrace new economies on one hand and old realities on the other.
One thing is certain: the New China’s economic might and a new generation within what is now the United States’ largest creditor which prospers as a result of it. If they make no apologies for this aspect of their past, one wonders how much they really know about it. After all, no one in power dwells upon it.
But the photograph in today’s newspaper of China’s President, standing atop his Chinese Red Flag limousine, rolling past thousands of troops and weapons, speaks volumes.
With apologies to Rod Stewart, “every picture tells a story — don’t it?”
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It’s Oct. 1 in China, and final preparations are under way early this morning for the nation’s celebration of its 60th anniversary.
President Hu will address millions attending a parade here in Beijing later this morning. More than 100,000 participants will march in what is billed as a bigger spectacle than the Olympics.
Security is extremely tight. We were required to move to a hotel inside the security zone late last night, and columns of tanks, missile launchers and other mechanized weaponry awakened us around 3 A.M., thundering into position on the parade route.
Yesterday was packed with diplomacy and economic development meetings as well as an obligatory visit to The Great Wall. Today, however, China’s only endeavor is to celebrate and communicate its success as a superpower.
Napolean was right. He said, “There lies a sleeping giant. Let him sleep! For when he wakes he will move the world.”
China sleeps no more.
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Good afternoon from Tokyo. My watch says it is 2:15 Tuesday morning at home, but it is mid-afternoon here in Japan where we have just landed on our way to Beijing, China.
Yesterday, at an altitude of 35,000 feet and at 550 m.p.h., we traveled 4,671 miles from Atlanta before leaving U.S. airspace over Alaska Monday night. After 8 hours following the sun in flight, over the Bering Sea, we still had another 5 hours and 15 minutes to go just to reach Tokyo for refueling. The sun never set. China is still 4 hours away.
While most of Memphis slept, we studied U.S. State Department briefing books about China. The country is immense (3.7 million square miles). The population is about 1.4 billion. The capital city of Beijing alone has 17 million people covering 6,336 square miles. Compare that to Memphis – not 700,000 people and 256 square miles, and you can begin to imagine how it might feel.
In Sunday’s installment, I wrote about early normalization efforts between our nations and “the past as prologue.” The foundation had been set in 1972.
But most of our trade with China is of relatively more recent vintage. Official embassies were not opened until 1979, and Tennessee did not initiate bi-lateral relations with China until 1986 under Governor Lamar Alexander.
Tennessee-China trade did not really hit its stride until as recently as 2000. Tennessee’s exports to China amounted to one of the fastest upward trade trajectories of all U.S. states – from only $184 million in 2001 to more than $1.8 billion in 2006 making Tennessee the United States’ 6th largest exporter.
Last year, however, our exports dropped to pre-2004 levels rendering Tennessee 13th among U.S. exporters.
The decline is cause for concern. Our political and cultural differences are already significant. As the balance of trade tips toward imports from abroad, the economic imbalance causes financial hardship and intolerance at home.
We need to understand how to reverse this trend if we are to recapture the revenue needed to boost our economy. For insight, I will meet in Beijing and Shanghai with companies which either have headquarters or major operations in Memphis and are now doing business in China. I hope to get their perspectives on what must be done to strike the right balance, and I will share what I learn during the days ahead.
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News today of the death of William Safire, speechwriter to President Richard Nixon during his 1972 visit to China, evokes memories of my early impressions of the world I am about to see.
As an undergraduate in the early 1970’s, I was a student of political science and foreign policy. It was the era of Richard Nixon, Henry Kissinger, the end of the Vietnam War and the “normalization of relations” with China.
“Nixon to China” became a metaphor for the incredible. That the ardent anti-Communist would be the first U.S. President to visit China in 1972 revolutionized foreign affairs.
Of China, Napolean said, “There lies a sleeping giant. Let him sleep! For when he wakes he will move the world.” Nixon recognized the giant had awakened and moved toward a rapprochement that, until the tearing down of the Berlin Wall, was likely the most dramatic event of the postwar era.
He wrote about it in his treatise on the end of the Twentieth Century, “1999, Victory without War,” (Simon and Schuster, 1988) and acknowledged the metamorphosis:
“The modern world cannot afford the risk of misunderstandings and misjudgments that can occur when powerful nations fail to communicate in spite of their differences. Our estrangement from China, justified though it may have been on purely ideological grounds, was an ideological luxury neither we nor they could afford any longer.”
“In the long run the Sino-U.S. relationship will endure not because of fear but because of hope….We have nothing to lose from friendship with each other; we have everything to gain.”
It is in that spirit we now go to China.
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I am honored to chair the delegation which departs for China today. The Southern Legislative Conference of the Council of State Governments, comprised of 16 southern states, recruited me as Tennessee Senate Majority Leader, together with the speakers of the Alabama, Arkansas, Louisiana and Missouri houses, the President Pro Tempore of the Virginia Senate and majority leader of the Arkansas house, to represent the Southern states on this trade and cultural mission to China. It is not undertaken at taxpayer expense.
Developing trade with China is important to our financial well being in Tennessee and surrounding states. China is Tennessee’s third largest trading partner, following Canada and Mexico. Last year, Chinese customers purchased more than $1.3 billion dollars in Tennessee goods and services with chemicals and agricultural products leading exports. Among the fifty U.S. states, Tennessee ranks 13th in the value of goods and services exported to China.
Upon arrival in Beijing, we will meet with diplomats at the United States Embassy. Meetings are also scheduled with Chinese Ministers of Foreign Affairs and Commerce. We will tour institutions of urban planning and international studies.
It is an important opportunity to develop and expand the kind of trade with China that creates more jobs in, and exports from, Tennessee and the southern states. Equalizing the balance of trade is one of the goals of the G20 announced in Pittsburgh last week, and we need to find ways as legislators to foster the relationships which further that goal without the kind of protectionist measures recently advocated by some.
I have many constituents whose employers have operations in my West Tennessee district as well as China. Companies like Buckman, Federal Express, International Paper and Medtronic consider expanding markets in China essential to their growth here at home. I will be meeting with several of these companies in Beijing and Shanghai. It is important to appreciate and understand their experience in China and what we, as legislators, can do to strengthen it.
A second delegation organized by the Tennessee Department of Economic and Community Development will also visit China later next month. We will share our knowledge with them in hopes of maximizing the opportunity for everyone’s benefit.
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