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| Marty Wolf |
It's clear to me that President Obama wants the United States to reach out to the Far East during his second term, and especially to build more trust with China. This requires expanding his approach to Asia beyond security issues to embrace trade and economic cooperation -- in a sense, expanding democracy through business.
"We will support democracy from Asia to Africa; from the Americas to the Middle East, because our interests and our conscience compel us to act on behalf of those who long for freedom," Obama said in his inaugural address last month.
It is no coincidence that the President has refused to name China as a currency manipulator in the most recent "Report to Congress on International Economic and Exchange Rate Policies," even though this has been a contentious issue between the two countries for some time.
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But, let's not forget that trust occurs on two levels: public and private. And, industries that are prominently positioned in the public eye must be held to higher standards than industries that are not.
For example, front and center in the public eye with China are the quasi-solar trade war and China's alleged tire dumping. Solar manufacturing and tires are both huge, highly visible industries, and therefore, public trust is essential. However, backroom IT services and value-added IT solutions provisions are not an immediate commercial trade hot button, and so the IT industry can enjoy private trust.
Of course, there is the question of access to U.S. data and whether that data can be adequately protected. Chinese telecommunications giants Huawei Technologies and ZTE recently underwent an 18-month congressional investigation that concluded the two companies pose a security threat and should be prohibited from entering into U.S. contracts -- even though the investigation did not find any evidence either company was involved in spying.
As a result, there is literally a Chinese wall between U.S. businesses and Chinese IT companies. However, I see cracks in that wall that will lead to both more opportunities and more competition for IT solution providers for three reasons:
First, when it comes to IT, whoever is less expensive, faster and better wins. Indian IT companies have proven that with the explosive growth of the IT industry during the past decade in India.
Second, we are in a global economy, and market efficiencies will be taken wherever they can be found. If a U.S. company can get IT services from China that are faster and less expensive, it will. For proof of this, look at Microsoft, which is either the biggest customer, a large investor, or technology provider for many Chinese companies offering IT services, including Wicresoft and Beyondsoft. Trust between the two countries will only expedite the process.
And the third, most powerful reason for improved U.S.-China relations: We need China and China needs us. For U.S. companies to grow and improve efficiency, China offers huge untapped potential. For its part, China needs us for it to fulfill its global aspirations.
