US Embassy, Political, Economic and Commercial Services

OK, I just got back from my first visit and wanted to get a few thoughts out before heading out to lunch.

We met with Mr. Christopher Beede, Political and Economic Section Chief and Mr. Stephen Jacques, Commercial Officer. This was our first visit so they gave us a short presentation on the broader economic issues and conditions in China today. It was a very interesting to hear what they had to say and it was really interesting because many of the ideas I read in The World is Flat were echoed in their presentation. The main issues that China is facing today are: 1. Unemployment; 2. Growth/Pollution; 3. A potential bubble in property prices and the stock market; 4. Income disparity; and 5. Social Stability. It was also fascinating to learn that the central government only has so much power to implement changes, that the provinces are more independent that I thought.

It's also going to be interesting to see how China moves forward with environmental laws and enforcement. Looking out my window and walking around the smog is unbelievably thick. I'm sitting here writing this now and have a slight taste in my mouth that makes me feel like I've been smoking. It's also interesting to learn that there really two sides in the growth in China - the coastal areas, from Shanghai to Beijing, and the interior of the country. When China opened up it started around Hong Kong and then worked its way up to Beijing. It's pretty much stayed there and that creates a lot of tensions as the central government wants some of that growth to move into the interior of the country but the coastal areas still want that expansion and that is creating strong competition.

The two gentlemen we talked with also discussed that March of last year marked the first time that they could discuss foreign investment in the US. Prior to that, they could only discuss the export of US products. A lot of states now are seeking direct foreign investment. Minnesota sent up a trade delegation recently seeking just that. How ironic would it be that Chinese companies started building manufacturing plants in the US.

Well, I'm off to lunch now. I'll write more later after I digest what I heard and discuss a bit with folks.