China and the U.S.: Irreversibly intertwined
July 22nd, 2008 by AdministratorWith his new documentary for the Discovery Channel, “The People’s Republic of Capitalism,” Ted Koppel shines a light on issues that aren’t much of a revelation for seasoned China watchers. From the producers’ description of the show:
“The American and Chinese economies are irreversibly intertwined. The common complaint that the Chinese are taking jobs away from American workers is in many cases true. China’s cheap and abundant labor attracts manufacturing from all over the world. Still, American economists estimate that the U.S. is as much as $70 billion richer each year because of its relationship with China — something must be going right.”
A number of U.S. companies are enjoying huge success in China. General Motors is the market leader in China and is reaping attractive profits, a stark contrast to its U.S. market position. Profits from their China businesses are having a significant influence on the global financial health of many U.S. companies. In fact, recent research indicates that companies pursuing a dual strategy of participating in China’s local market and exporting from China are achieving substantially higher profits than those firms only doing one form of China business.
The economies of China and the U.S. are, as Koppel reminds us, inextricably intertwined with benefits for both sides. As Koppel’s documentary shows, globalization isn’t the boogeyman some make it out to be. There’s certainly a positive give-and-take between China, the U.S. and, of course, other countries around the world. Those companies proactively exploiting these relationships are going to be the winners going forward.
