Businesses to stay and increase investment despite tariffs

Neil Bush, son of former US president George H.W. Bush, says that bilateral trade has been good for both China and the United States, and that despite the tariff barriers put up by the Trump administration, US companies are not leaving China. In fact, many of them are actually planning to invest more there, he said.

"The reality is that the US-China relationship has led to the greatest economic development that could ever have been imagined," Bush, founder and chairman of George H.W. Bush Foundation for US-China Relations, said from a historical perspective.

"Our bilateral trade relationship, which is part of the whole process of globalization, has led America to become the greatest, strongest nation on the face of the planet. We've been at full employment for many years," he said in a recent interview with China Daily.

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Meanwhile, China has grown to be the second-largest economy after the US, and Bush calls that a win-win for both.

The anti-globalization movement is negatively impacting the US-China relationship, said Bush. "There's an even more fundamental concern that China's rise represents a threat to America, to our standing in the world, to our way of life, to our economy. And I don't buy it."

Bush, a Houston-based businessman, visited China for the first time in 1975 and has made frequent trips to China in the past 40 years. "I don't think China has the intention of subverting our economy. Every time I go to China, which is often, I hear businesspeople and government officials say, 'We want more collaboration with the United States.'"

The narrative of "Making America Great Again" is wrong, he said. "We have been great. We are great. We will be a great nation going forward."

But US greatness is deteriorating, said Bush, not because of China, but "because we're becoming an unreliable friend. Our greatness is being diminished by our waffling and indecisiveness and policy switching every single day, and by the tariffs that are going up and then going out and this and that. It's kind of crazy."

Bush said the impact of tariffs is yet to be felt. "The impact of tariff will be to raise prices for American consumers, and will be to slow economic development globally. It'll slow the economy of China, and it'll hurt our economy," said Bush, adding that US citizens will be threatened with job losses from a slowing economy as a result of the tariffs.

Bush said the justification for tariffs from Donald Trump's perspective is that the US has been ripped off and jobs have been taken away. However, tariffs will not bring manufacturing jobs back to the US but will go to other countries such as Vietnam or India instead.

"We are not a manufacturing economy anymore, so we shouldn't pretend that that's something we should even desire to do."

He said it is a false premise to see trade deficits as a bad thing, to view it as winning by China and losing by the US. "Trade deficit doesn't show anything except for the fact that we're buying more stuff from China than China's buying from us, which to me shows we're the stronger of the two nations."

Bush said China continues to be more efficient in manufacturing. "It's not cheap labor, by the way. It's automation. It's robotics. It's AI."

He is working with a car company in Anhui province to help with its internationalization. He recently toured one of its plants and marveled at the sight of mechanical arms moving the pieces around.

"I've been to factories that make all kinds of different products. I've seen the result of these products, like drones that are flying doing investigations of power plants and the grid and different kinds of things. There's technology that's being developed in China that makes it the No 1 manufacturing country in the world. I'm dying to find ways to bring those kinds of technology breakthroughs to the US," he said.

Still attractive

China remains attractive to US companies, Bush said. His friend Harley Seyedin runs the American Chamber of Commerce in South China. They recently issued the Special Report on the State of Business in South China.

"Interestingly, in the day and age where you would think the Americans are abandoning China, and you read the headlines that Apple's phones that are made in China and shipped to the US are now going to be made in India, not one of the companies in South China is leaving China," Bush said.

"A large percentage are investing even more money in their operations in China. They continue to realize the benefit of having access to the China market and of making their stuff in China that they can export to the rest of the world. So, in spite of this rhetoric that you think Americans aren't going to China, the businesses that are there are staying there and building their businesses there."

According to the report, 62 percent of surveyed companies listed China as their No 1 priority for global investment.

Just coming back from China, Bush said his most recent observation is that Chinese businesspeople and individuals he talked to exhibited a more positive attitude toward the Chinese economy and their position and role in the world.

'Reverse psychology'

"There's this kind of reverse psychology thing, even though these tariffs are going to be punishing to China, it's not going to cripple China," he said. "People are feeling more optimistic now, and I was surprised because at the end of last year, there was a lot of concern about the economy, there was kind of a down feeling. With this most recent trip (in April), there's a much more positive, upbeat attitude toward how China is going to be competing in the world and their role in the world."

Although there are anti-China sentiments in the US, Bush said he is optimistic the US and China will be able to reach some deal to continue this relationship. "I can't imagine a time in the near future where we won't have some level of trade," he said.

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Bush said there is a misunderstanding in the US based on false narratives that have been promoted by politicians "who for their own political gain get traction by bashing China, by belittling China, and by making China out to be an enemy to America".

"Every time I've been to China over the past 50 years, my first trip there was in 1975, I've had nothing but good experience. The people are friendly, the food is good, the Chinese people admire and look up to America and Americans, they want to work collaboratively with America. So I wish more Americans would find a way to become better educated and informed about what's really happening in China and what their intentions and motivations are."

He wishes for more exchanges at every level between the two countries. "I really believe, as my father believed, that by being present with others, by putting yourself in the other guy's shoes, you know, by establishing a deeper understanding through respectful dialogue that you could accomplish so much together. And this world needs collaboration these days on issues that are prominent as it relates to sustaining life on Earth for humans."

For that, US-China bilateral collaboration is critical, he said.

mayzhou@chinadailyusa.com