Building “guanxi” or relationships has paid off in jobs and investment for both China and for Michigan and the Midwest.
During each of his 7 years in office, Michigan Governor Rick Snyder has carved out days and weeks in his busy schedule to travel to China. Not for a quick, photo op, but to build and cement both personal and business relationships with Chinese government and business leaders. This practice is now paying dividends for job creation and investment in Michigan – a historic, "fly over" state in the eyes of Chinese looking for global investment.
On his recently completed 9-day trip, Snyder met with executives from 83 Chinese companies, 30 of which have the active potential for investment in Michigan with projects that could bring thousands of jobs to Michigan.
One meeting stood out.
Those with little or no knowledge of China may have missed a particularly powerful meeting between Governor Snyder and Premier Li Keqiang, the second highest-ranking official behind China’s President Xi Jinping.
To the uneducated, this may seem to be just another photo op with still another Chinese businessperson or low- rung government official. To those in the know, however, this was a signal of how highly Chinese leaders value their relationship with Governor Snyder and the State of Michigan.
It is typical for a national Chinese leader of Premier Li Keqiang’s stature to grant an audience with a government official from another country, even one not of equal standing, and to have it captured and covered by media for China and the world to see. However, their meeting sends a powerful and clear message of the esteem and value with which Governor Snyder is held in China. Rest assured this signal was not missed by Chinese investors.
Governor Snyder has a concise message that he shares on all his stops in China: "With 70 percent of global automotive research and development happening in Michigan, and our strong manufacturing base, talent and business-friendly environment, there is no better place in North America for Chinese companies to expand than in Michigan." He continues, "We are in China making a strong case with every executive and government official we meet to build the foundations for long-term investment in our state, showcasing our companies’ high-quality goods and services for export, and how Michigan and China can continue to work together to explore cooperation in areas of mutual interest.”
The Governor highlights Michigan’s skilled workforce, research and development assets, and manufacturing capabilities, as well as the state’s strong interest in expanding ties with China.
Michigan has much of what the Chinese need and want – from the autonomous vehicle and mobility sector to agricultural products, tourism, a pristine landscape, quality education, healthcare, and a friendly business environment that is fueled by a desire for expanding trade and investment. Considering the desirable aspects for both parties, a China-Michigan partnership is rooted in logic.
Go West: Early
Governor Snyder also celebrated the 35th anniversary of the Michigan-Sichuan Sister State/Provencal agreement during the fourth full day of his recent China investment mission, further strengthening the friendly cooperation and economic activity between the people of Michigan and Sichuan. Snyder was joined by Sichuan Governor Yin Li and other leaders in government, business, and education at the anniversary celebration held in Chengdu.
This agreement was originally signed by Gov. William Milliken in 1982, renewed by Gov. James Blanchard in 1984, and renewed again by Snyder in 2012.
I take great pride in encouraging Governor Snyder to rekindle this relationship and I personally carried a letter to the Governor of Sichuan in 2011 on behalf of Gov. Snyder to jumpstart this important and early connection.
In 1982, Sichuan was an economic backwater in a nation just beginning to shake off the shackles of the Cultural Revolution and open itself up to the world. Today, Sichuan, Chengdu, and China as a whole are no longer backwaters to anyone but have morphed into vibrant incubators of manufacturing vitality and innovation.
Michigan can be proud of this longstanding relationship and looks forward to 35 more years of friendship and collaboration. The Governor stated with pride, "Our agreement represents a mutual commitment to continue our positive relationship and further promote the economic and cultural development of our two regions.”
Dividends for Michigan Citizens
How is this longstanding relationship paying off for the Great Lake State? In 2016, Michigan ranked number two in the nation for a number of investment projects from China. Michigan also ranked number three in the nation for the number of jobs created by Chinese investment and number four for total capital investment. Between January 2010 and July 2017, Michigan received $1.1 billion in new business investment from China that created 5,475 jobs for Michigan residents – an ROI (return on investment) that has created numerous benefits for the people of the Great Lakes State.
The Trump Effect
The contrast between Governor Snyder's business friendly approach and that of the new Trump team couldn’t be more startling.
As a recent Forbes magazine article illustrates, President Trump seems to delight in keeping others off balance. When it comes to trade issues, his administration has certainly been doing that with China. Whether this induced befuddlement will serve Washington well remains to be seen.
It appears that China is perplexed as to why the President has decimated the U.S. State Department and cannot derive logic from his tweeted policies. But Trump’s exploits have produced little real action, hence undermining his administration’s power and prestige.
Essentially: Governor Snyder at the subnational level offering friendship, engagement and partnership, while the chief administration of the U.S. offers "befuddlement."
I have argued for decades that our national leaders need to focus on issues like trade imbalances, currency manipulation, cyber spying, and human rights violations while state government leaders should concentrate on relationships that build economic, cultural, educational and people-to-people exchanges with the People's Republic of China. Governor Snyder has done more to build a solid relationship with China than all his predecessors combined.
For the sake of China and the U.S., in fact, for all of the humanity, America needs a clear and strategic national China policy – sooner than later.
I caught up with Governor Snyder about his whirlwind connections with old friends in China as he developed new ones. He believes we have just begun to scratch the surface on the multitude of mutual trade and investment opportunities with China. His newly created Michigan-China Innovation Center is a catalyst that will propel this relationship forward after his term-limited governor’s job ends in 2018.
Governor Snyder emphasized, “It was an honor to meet with Premier Li and affirm Michigan’s commitment to positive relations with China. Our meeting gave us an opportunity to learn from each other and discuss areas like advanced manufacturing and innovation that can have mutually beneficial results for both China and Michigan.”
Governor Snyder understands that building bridges is a far smarter strategy than erecting walls. You can catch more Chinese investment over a ‘Maotai toast’ than a Trump- laced Twitter post.