Many things are happening in the atmosphere of globalization, politically and economically. Whether it is through Twitter or not, there are big decisions being made every day. Of course everybody wishes they could see through the crystal ball and see what will come after the first 100-days of Trump’s presidency. But few have been either able or willing; you can decide which one, to predict what will come out of the first-quarter.
What we do know:
We know how we got here – rapid economic growth and industrialization in China since Deng Xiaoping’s 1978 Economic reform. This rise of China and East Asia has caused a new balance in the global economic spectrum. Additionally, we know that what happens next is going to change things for everybody.
Listening to Mitch Presnick’s speech on ‘Doing Business with China: The New Economy and what it Means for you’ we were able to hear what his experience in China has led him to believe will happen. Mitch has spent his career building businesses in China since 1988. He founded Super 8 Hotel China in 2004 and continued to bring Budweiser to China. The China businessman graduated from Peking University in 1990 and is a permanent resident of Hong Kong. His experience has given him valued insight in doing business with China.
In China 1.0 it was all about bringing brands such as Budweiser and Super 8 Hotels in to China. Now, China 2.0 is all about the industry and opportunity to investors. It’s a source and destination for investment capital, business deals, and partnerships. The industries to focus on are travel & tourism, healthcare, pharmaceutical, technologies, and e-commerce.
What to expect:
Yes, we do actually have the crystal ball right here in Columbus, Ohio! Okay, that isn’t true but how could I resist? Although we may not be willing to go out on a limb and predict the unpredictable, we are willing to share what we do know. China 2.0 is looking at the peak of technology, B2B activity, and especially retail with Alibaba. For the first time in our lifetime China will not only be domestically consumer driven but also predominately urban.
You can expect for the Chinese wages and U.S. interest rates to go up. According to Bloomberg’s Dollar Index the U.S. Dollar is gaining strength and the Chinese Yuan is weakening. Goldman has predicted that the Yuan will be valued at about 7.2 by the end of this four-year term.
Trump? … Talk about a loaded question. Historically, we are dealing with a term for the deal-makers. Trump’s team and China are both good deal-makers. Will there be some friction and questionable actions along the way? sure. You can expect aligned interest to become apparent to the Trump Administration and President Xi. However start-up founders are far more optimistic than the news has been.
In the Meantime
A main point of Mitch’s speech was – the risk of not dealing with China is far greater than the risk of dealing with China. The best thing for an investor or business to do right now is to align operations and assets within the One Belt-One Road infrastructure.