According to a recent China Daily report, China’s Vice President Xi Jinping will arrive in the U.S. to first meet Feb. 13-16 with President Obama and other government officials, and will then head off to Des Moines for discussions with Iowa Gov. Terry Branstad regarding China’s enduring (since the 80s) agriculture trade relationship with Iowa.
It is widely thought that Xi Jingping will succeed Hu Jintao as China’s next president, as VOA news mentions in this article about Xi’s anticipated trip:
Next week, Vice President Xi travels to Washington, Iowa and California. To add to the significance Washington places on the trip, Xi is the man expected to be named China’s next top leader.
While Xi has stressed a desire for continued cooperation with U.S.-China trade relationships, VOA news quotes:
However, an official says Beijing will increasingly act in its own national interest, even if such moves anger other countries.
And if we consider this 2011 NYTimes profile of Xi Jingping, we see:
There is little in his record to suggest that he intends to steer China in a sharply different direction. But some political observers also say that he may have broader support within the party than Mr. Hu, which could give him more leeway to experiment with new ideas. At the same time, there is uncertainty about how he may wield authority in a system where power has grown increasingly diffuse. Mr. Xi also has deeper military ties than his two predecessors, Mr. Hu and Jiang Zemin, had when they took the helm.
What does all this mean for business? Probably more of the same, but with a renewed resistance from China to revalue the Yuan any faster than they see fit, a more active military presence off China’s coast (especially around oil-rich disputed territories and strategic shipping and military zones/outposts), an amplified and constant feed of jingoistic propaganda to keep ravenous masses at bay, etc. etc.
But, what will be crucial for those doing business in China to know, is how Mr. Xi will transition China’s economy, in the face of dropping and shifting demand (into a consumer based economy vs. an export-dependent one). Whether China will march on with a bias against foreign companies, lack of “real” legal recourse for businesses victimized in a climate characterized by intellectual property theft crimes and corrupt trade practices, and all the while improving China’s human rights outlook, rising inflation, and a simmering class warfare, is the question.
But one thing seems obvious: Foreign companies will no longer define or influence the Chinese economy like they did even five years ago. It’s clear that doing business in China will always come with a large helping of compromise, and foreign businesses must ultimately ask themselves whether the cost is worth the benefit. Risk assessment will be more important than ever when doing business in China. In fact, as Chinese companies expand around the world, entrepreneurs most are likely to maintain their value sets (and assets) if business deals occur in “neutral” territory, further from the all-seeing (and controlling) eye in Beijing.