Georgia's Stake in Openness with China . . . and the Global Economy
by John Ray
When I had lunch recently with a young Chinese national, I was eager to learn what he and his peers in China think about President Obama.
My young friend, who received his PhD from Georgia Tech and is currently working in the software industry here, responded cautiously.
"President Obama seems much more open to the outside than President Bush," he said. "That's what my friends see. With President Bush, you knew that he would do exactly what he said, but he didn't seem so open."
I chuckled silently at the wonderful irony in my friend's comments. For many years, we in the United States have judged the Chinese based on their receptivity to Western ideas on the economy and democracy.
Ostensibly, his perceptions appear correct. For her first trip abroad as Secretary of State, Hillary Clinton completed a four-country swing through Asia, including a stop in China. By contrast, the first trip abroad for her predecessor, Condoleezza Rice, was decidedly less forward-looking: Europe and the Middle East.
Domestic rhetoric and policy, however, hardly broadcast openness. The $787 billion stimulus package recently enacted by Congress, for example, has a "Buy American" stipulation.
As with much of what comes from Washington, this provision sports a warm and fuzzy banner, yet contains enough loopholes to sink a container ship. Nonetheless, the signal sent to the rest of the world is that a global leader in the development of world trade is now afraid and poised to turn in a protectionist direction.
What's Georgia's stake in all this? What's wrong with buying American? With unemployment rising and job anxiety at nail-biting levels, who cares about China, or any other country, for that matter? These questions are natural, but the answers don't present an "either/or" proposition.
First, we must recognize that our economic relationship with China is not the cause of the morass we currently find ourselves in. About the only part of this crisis one can attribute to China is that the Chinese used their huge liquidity reserves to purchase millions of dollars of Wall Street-generated securities, which have proved to be toxic. Further, China has helped finance profligate spending in Washington through their purchases of U.S. government securities. Accusing China of being the cause of our financial crisis, therefore, makes as much sense as killing all bartenders in an attempt to cure alcoholism.
It's also imperative that we Georgians understand the increased stake we have not only in China, but in global trade. Since 2002, exports of Georgia products have almost doubled, rising from $14.4 billion to $27.5 billion in 2008. China is by far the largest single contributor to that growth. Since 2002, China's purchases of Georgia products have risen fourfold, surpassing $2 billion in 2008. Only Canada is a bigger international consumer of Georgia products.
Because of our world-class ports in Savannah and Brunswick, Georgia benefits from trade with China beyond the export of products. In recent years, import and export business with China has been the fastest-growing segment at our ports, and such activity produces jobs for Georgians. A 2007 study by the University of Georgia found that the state's ports directly or indirectly supported almost 300,000 jobs and contributed $25 billion to Georgia's gross state product. Even as the global recession slows trade, the Port of Savannah is gaining market share relative to all East Coast ports.
Further, the greater Atlanta metro area is one of the nation's top logistics hubs. It ranks fifth nationally in logistics-related employment. The air, highway and rail corridors that intersect in the greater Atlanta area, coupled with nearby sea-going access through our state's ports, have turned Georgia into a major distributor of traded goods. The state's dynamic logistics network would be moribund without global trade, and most notably, trade with China.
Despite a worrying economic outlook, we must understand that not only is our recent past tied to global trade with countries such as China, but our future is as well. Georgia stands to benefit from China's growth, and we need to encourage and embrace genuine openness not only with China but with the rest of the world.
John Ray is the chairman of the Georgia China Alliance.
John Ray is the chairman of the Georgia China Alliance. [full bio]
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