Stanford EventSubmitted by Destination Wealth Management on June 19th, 2019
This past week I was asked to moderate a panel of visiting Chinese officials with US technology investors. The event, sponsored by the government of Nanking in cooperation with CNBC Asia, was well attended and provided a fascinating insight into relationships between China and US economic interests.
The numerous presentations were mostly focused on the willingness of the Nanking government to work directly with US investors seeking to expand operations in Asia. Government officials outlined a series of incentives available to US businesses including subsidized land, assistance with infrastructure development, and a variety of other business friendly initiatives.
It's important to note that this event was to highlight the benefit of one particular city. Government officials of that city made it clear they were not speaking for the national Chinese government. One can imagine why it might be important for city and business leaders from Nanking to be clear about the limitations of their comments on economic policy.
The event was covered by a variety of news agencies and I was asked to comment on the state of US Chinese business relationships. At least seven Chinese news agencies were present varying from city publications to large national publications in China also available in the United States. There seemed to be great interest in learning more about the American perspective on current trade policy.
I came away from this event with three main takeaways.
Despite confrontational headlines, China remains interested in striking a business relationship with United States investors and companies. It is clear that China sees the opportunity to partner with the United States on an economic basis.
While not stated explicitly, and after numerous confidential conversations, Chinese business leaders recognize the importance of protecting intellectual capital rights. This is a major point of contention in current negotiations and the US government has the attention of Chinese business leaders that this is an important issue.
Despite the rhetoric on the national level from the Chinese government, local Chinese and government officials still have great interest in becoming a research and business hub for multinational companies. It's a pragmatic decision as new money into the Chinese economy can only help to stimulate China economic growth.
Based on our interactions with business and government officials, we continue to believe that a deal will happen regarding trade policy and intellectual capital protection measures. The negotiations continue and one should recognize that rhetoric is part of the negotiation process.
These type of events provide DWM the opportunity to learn directly about the state of US Chinese economic relationships. This insight helps us as we adjust portfolio strategies and is an important part of our research process.
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