ASG Senior Advisor Henry Levine to Participate in a World Affairs Council Town Hall on China's Evolving Economy
Expert scrutinizes Chinese investment in U.S.: World Affairs Council speaker is participating in national 'town hall' meeting.
By Pat Evans of the Grand Rapids Business Journal
In college, Henry Levine’s interest in China had no practical use.
When Levine graduated in 1972 from Bucknell University in Lewisburg, Pennsylvania, President Richard Nixon had just made his momentous visit to China. Since that meeting, Levine’s expertise has become increasingly pertinent — never more so than in the current state of world affairs.
Levine will be the guest speaker in Grand Rapids during the ninth annual China Town Hall: Local Connections, National Reflections, scheduled for 7 p.m., Oct. 5. The event is a live “town hall” meeting with a panel of Chinese experts broadcast to audiences in more than 70 locations across the country.
Locally, the event is sponsored by the World Affairs Council of Western Michigan and will be held at the University Club in the Fifth Third Bank building in downtown Grand Rapids.
Levine will speak at 6 p.m., and the interactive webcast begins at 7 p.m.
Levine is a former deputy assistant secretary of commerce for Asia and currently is a senior advisor at Albright Stonebridge Group in Washington, D.C., the consulting group of former Secretary of State Madeleine Albright.
His interest in China was solidified in college when he saw a timeline of China’s history in contrast to the United States.
“Chinese history was a very long line and right below it was American history, which was exceptionally short,” he said. “I was already interested in Chinese history, but that graphic representation really brought home to me how dramatically different it was.
“But to most of us at the time, it was just an interest.”
He said since the Nixon meeting, the development of the opportunities in China has skyrocketed, despite some “tragic missteps of mistaken policies” such as the Great Leap Forward and Cultural Revolution.
“In the early 1980s, Chinese leaders had decided to adopt what we think of as a more western economic way of thinking that emphasizes economic development over ideology,” Levine said.
“They began to use the market mechanism to drive development, rather than planning and government edict — and that’s really what transformed the country and gave the opportunity for the hard work and entrepreneurial spirit of the Chinese people to blossom and drive what is really an unprecedented amount of economic growth.”
Levine said everyone should be paying attention to what’s happening in China, as it’s been established as one of two major economic drivers of the world economy, along with the U.S.
Following several decades of double-digit GDP growth in China, this year that growth will slow to approximately 7 percent. Depending on the economist, Levine said, some experts believe that growth rate will be closer to 5 percent by the end of the decade.
“It will have a broad impact on a global economy,” Levine said. “As China slows, there is a direct economic impact on U.S. companies.”
Because of the slowing growth rate, Levine said Chinese officials are aware a restructuring of the economy is needed. In the past, the economy has grown largely because of government investment in infrastructure and state-owned companies building large steel mills and cement plants, he said.
“That era is coming to an end. Increasingly, that type of investment is not providing decent returns,” he said. “They want to shift from a greater reliance to services from manufacturing.”
Another factor in the slowdown is an increase in wages, which has sent some manufacturing work to other Asian countries such as Vietnam, Bangladesh and Thailand. That factor is also in conjunction with many foreign companies having invested significantly in Chinese operations.
“A lot of companies have made investments already, and part of it is, as the Chinese economy is slowing, companies don’t see the opportunities they’ve seen before,” Levine said.
With the decrease in foreign investment, Levine said the Chinese government is encouraging Chinese companies to invest abroad as they face the same pressures as foreign companies in China.
He said although statistics are “touch and go,” the flow of Chinese investment into the U.S. is going to surpass the flow of investment going the other way. Still, he said, there is quite a bit of catching up to do in terms of overall investment.
Chinese investment in the U.S. will be the main subject of this year’s town hall meeting, Levine said. Chinese investment in the U.S. is generally seen as a positive.
“They’re creating new companies, building new factories and creating new jobs, and in some cases, they’re acquiring companies they can rescue and save jobs,” he said. “Politically, it’s a positive as members of Congress and the American people can see the jobs created and saved by Chinese-owned companies.”
That is significant, Levine said, as Chinese-U.S. relations currently are stressed.
“It’s fair to say we’re going through a difficult time — arguably, the highest level of friction in bilateral relations since Richard Nixon went to China,” he said.
“So far, there has not been a direct impact on the trade and investment relationship, except for the high-tech trade area.”
There is a lot of mistrust on both sides of the Pacific in the high-tech sector, he said, with national security issues popping up in both governments.
The Oct. 5 town hall meeting comes at a time of high interest, Levine said. Chinese President Xi Jinping kicked off a weeklong U.S. visit last Tuesday in Seattle, where he gave his only public speech and met with dozens of U.S. businesspeople such as Warren Buffett, Apple’s Tim Cook and Amazon.com’s Jeff Bezos.
He then moved on to an official state visit at the White House with President Barack Obama, and then made his way to the United Nations. Cyber spying is said to be a major topic of discussion between Obama and Xi.
The U.S. likely also will urge Xi to avoid quick fixes to the economy.
“The big question will be to what extent this visit will contribute to resolving some of the issues in this relationship,” Levine said. “We’ll have to see how it plays out.”
Link to full article here.