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China. Friend Or Foe? Opportunity Or Challenge? Or, Why Can't We All Just Get Along?

By Dan Harris and Steve Dickinson

I got an email today from a client touting his success at sourcing wind energy components from China. My client's description of this project nicely sets forth why trade with China should not be oversimplified. Speaking of oversimplification, today is also the day before the final episode of this season's Dr. Drew's Sober House. And here's the connection: Rodney King is one of the residents of Sober House and he is also the person who so famously asked the very simple question as to "why can't we all just get along." If one really delves into the many layers involved in that question, it is not so simple after all. I see the US trade relationship with China the same way; the questions arising from it are not susceptible to easy answers. What I like so much about my client's wind energy email is that its very simplicity (especially because all I have to work from is the one email) makes it so easy to take his micro story to a macro level and to make concrete the benefits of free trade. My client has been conducting extensive business with China for at least 15 years and here is his email:

I have been consumed by my recent wind energy project and just completed the first unit in record time from the first quotation to shipping a unit in 4 weeks, two of which was manufacturing. I knew it would a small miracle if it was accomplished but we did it. I am leading up to my idea for the article. A lot of people want to blame China for the US's own sloppy business practices. China has been around for 20+ years, through good times and bad. Imports into China are increasing and exports from China are decreasing at an amazing pace. You can buy most things cheaper in the United States today than you could 10 years ago and this has been good for the everyday consumer. China didn?t cause this problem. My wind power project is a great case study that shows how US companies doing business with China can truly be a win-win situation. The work I did was for a fairly small Midwestern employee owned company that was in trouble earlier this decade but instead of "crying foul," they embraced the idea of turning themselves into a firm that sources from and sells to foreign countries. On this last project, we accomplished something just short of remarkable. We were able to quickly put together a rather complicated piece of equipment at a competitive price. Some of the components come from China and some come from the US. We put this project together and this US company is now taking orders from all over the world. Without China, this would not have been possible and many US jobs no doubt would have been lost. So we can sit here and bemoan how this company had to secure some components from outside the United States, but I prefer to celebrate how procuring those parts enabled them to put together in an demand product quickly and at a price that can sell. The good old days of everything being made in America are long gone and we can either sit around and complain about that or we can do what we can to move forward in producing and marketing in such a way as to both include places like China and to retain and create American jobs. In all this time of doom and gloom there needs to be a good story told. In this case, this US company would never have been able to compete globally in this high margin business without its ability to outsourcing a portion of its project to China. I think it important to get stories like this out there, as so many of the people who I meet up with in my day to day life have no idea about how China trade can actually help. You have a much better flair and vehicle to tell this story so I hope this is a good one to write."

It does frustrate me to read or hear of people who think trade with China is always "either-or." Though there are times when China outsourcing means direct job losses in the United States, there are also times where outsourcing to China means companies in the United States stay open another day. I know my client's story is all rather vague, but it is a good story and I figure bringing in a reality TV show constitutes the expected "flair." So to quote Rodney King (again), why can't we all just get along? What do you think? Is trade with China a cause of the US's economic problems, a potential solution, or both?

Full post as published by China Law Blog on March 08, 2009 (boomark / email).