China
Economic Relations between Indiana and China:
New Thinking about Creative Connections
During the 2008 Democratic presidential primaries, both Candidates Obama and Clinton sought to reassure Indiana workers that if he or she were elected, protecting Hoosier jobs from competition with Chinese workers would be a top priority. This led many observers to ask how badly Indiana has been hurt by economic relations with China. The answer is that while some jobs have been lost to Chinese producers, Indiana also produces much that the Chinese buy. At that time, China was Indiana’s fifth largest export target. Indications are that in the current global slowdown, China may have become even more important to Indiana, moving to third in the state’s export targets (Indiana’s exports to China has declined in the past year, but much less than to other countries).
Sagamore Institute’s May 3 “Ideas in Indiana” symposium took place in an appropriate location, the Museum of Master Au Ho-nien at the University of Indianapolis. A small private college in south Indianapolis possessing a collection of work by the greatest living traditional Chinese artist may seem surprising. But it is only one of many surprising connections between Indiana and China. How these connections can be mobilized to create a more prosperous Indiana and a more prosperous China was a theme of the discussion.
Keynoting the symposium was John Watkins (Vice President for Cummins and Chairman of the American Chamber of Commerce in China). His argument:
China's rise is both a threat and an opportunity. It has the potential to bring out the best or the worst in both societies. The risks of China's rise are real---but less threatening than most think and the opportunities are far greater than most can envision. American stakeholders who want improvements in the trade and overall bilateral relationship will be better served by focusing more time, energy and resources on maximizing our opportunities through a solution-oriented, innovative and can-do winning attitude and approach---in the way President Kennedy challenged Americans to think big and go after an audacious goal. To use a sports metaphor, we have to play offense as well as defense.
In his talk, Watkins laid out his idea of “Three One Trillions.”
Within three decades, we can see US $1 trillion each of US annual exports of goods and services to China, US companies’ annual production in China for that market, and cumulative Chinese investment in the US. Successfully accomplishing these objectives will result in outstanding long-term economic growth and job creation in both countries.
The audience for Watkins’s talk included Chinese businesspeople who have invested in Indiana and Indiana businesspeople who’ve invested in China, academics from the state’s leading universities, officials from the Indiana Economic Development Corporation … all with the same question: How will this “Three One Trillions” affect us in Indiana?
Indiana-China probably won’t look like Indiana-Japan. One of those present at the symposium of Sagamore fellow Larry Ingraham, who was part of the very successful efforts to build up economic relations between Indiana and Japan in the 1980s. Things are different today.
Human connections between Indiana and China will count … a lot. If “demography is destiny,” what will be Indiana’s future? Can its population of immigrants from China help build up its other connections with China?
Business links between Indiana and China are growing more robust. Although Indiana could of course develop more businesses, the state is not doing badly.
The number of connections between Indiana and China is not the challenge … making them smarter and thicker is. The state needs more connections to China in order to flourish economically. But we also need to connect the connections.
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