John Doggett Speaks with CNN, Nebraska Agricultural Conference on U.S.-China Business Relations
John Doggett on U.S.-Chinese Business Relations (no link available)
Feb. 15, 2012
Lincoln Journal Star
Ag conference speaker: China is growing and may be looking to buy Nebraska land
Feb. 16, 2012
John Doggett, senior lecturer in the McCombs Department of Management, recently spoke with CNN about US-Chinese business relations, as Chinese Vice President Xi Jinping visited the U.S. He also spoke at an agricultural conference in Nebraska on many of the same subjects, as well as on Chna's recent worldwide farmland acquisitions.
Video for the CNN interview isn't available, so here's an edited excerpt:
CNN: You’ve been to China, you know so much about this business relationship. Xi Jinping, in line to be the next president of China, is visiting the U.S. But this visit is not for the American audience, is it? This is a visit that’s securing his ascension in China.
Doggett: This visit is an indication that this guy is going to be the next president of China. And more importantly, that he has the strength to be able to deal with the current leaders of the United States. So, if there are two markets that he’s playing to, the Chinese market is obviously much more important, though the U.S. market is also important to him.
CNN: How much can the Obama administration be pushing issues with Xi such as companies angry about losing their intellectual property rights to Chinese companies and technology companies losing their trade secrets to Chinese cyber espionage? Should they be pushing those issues?
Doggett: Well, they have to push hard. The analogy I use is, in football or any sport, you have a new team that’s very strong, that’s playing as hard as they can. We have to do the same thing, so we have to push back. But we really have to understand that China now is the largest importer of American culture and products in the world, and our sales of technology products legally going to China is very significant. So this has to be a dance where both sides realize that we both have something to gain and something to lose.
CNN: We buy so much more from China than we sell. Even though we have record exports to China, we have even bigger record imports. Can that big imbalance continue?
Doggett: Well, no. You can’t have a trade balance that’s unbalanced the way it is right now.. But there's good news too. Apple has had an absolutely blow-out experience in China. They’re able to sell their products in China at 20 percent more than they sell in the United States. And GM’s most profitable subsidiary is Shanghai Buick, which is in China.
CNN: John, you’ve said we need to Apple-ize our economy, meaning we invent it here and build it there. But there’s serious soul-searching going on about the conditions under which some of those products are made.
Doggett: Those are legitimate questions, but they go on the assumption that the Chinese people don’t care about the conditions they’re working in. And that’s just not true. There are a lot of protests by Chinese workers about their working conditions. In the past year wages of some of these factories that make high-tech products have gone up 20, 25 percent, as the Chinese workers say, “if you want us to continue to work, you’re going to have to pay us more.” So, we need to put pressure on them, we need to be concerned about that. But we can’t act like we’re the only people who see these things and that the Chinese workers don’t care.
As keynote speaker at the Governor's Ag Conference in Nebraska, Doggett spoke about trends in Chinese acquisition of foreign land, predicting more Chinese investment in Nebraskan farm land. At the conferene, Doggett disagreed with Nebraska Gov. Dave Heineman about the extent to which China would control purchases of the state’s land assets, As reported by the Lincoln Journal Star, Doggett pointed out the reasons why he expects to see this trend grow:
"This is a country that's moving faster than any country in the history of economic growth," Doggett told the audience. In trying to meet the food demands of a population of more than 1.3 billion, the Chinese already have bought the 16 largest dairy operations in New Zealand. There are more than 1 million Chinese farmers on the ground and producing food in Africa. And the world's most populous country has more than $3 trillion in financial reserves.
Joining the governor to handle media questions, Doggett shook his head at the idea of trying to outlaw Chinese land purchases. It's not a very practical plan, he said, under circumstances in which China has the leverage that goes with holding more U.S. debt -- more than $1 trillion -- than any other country.
"We simply cannot exist without borrowing money from China," he said.