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Wednesday, December 10, 2003 - Page updated at 12:00 AM

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Guest columnist

U.S.-China trade: There's more than meets the eye

Special to The Times

The recent trade spats between the United States and China are tearing me apart.

We've heard a great deal about the complaints: The Chinese are unfairly keeping their currency low to gain export advantage; the Chinese are stealing jobs from American workers; the Chinese are dumping products onto the American market. The impression seems to be that America is being invaded by goods manufactured in China and that America is the victim.

The impression, of course, is wrong

The complaints don't mention that for each dollar of value in a product China exports to the U.S., the product sells for $4 to $5 at the retail level, according to Morgan Stanley's Asian-Pacific chief economist Andy Xie. The bulk of the profit goes to American brand owners and distributors.

The complaints also don't mention that 60 percent of China's exports are actually generated by joint-venture companies, many of them involving American companies, according to Asia Goldman Sachs' vice chairman Kenneth Courtis.

The full picture is indeed much brighter if one learns the prospering, other side of the story.

Did you know how many Starbucks stores there are in China? One hundred and nineteen. Started only a few years ago, they are now in Beijing, Shanghai and Guangzhou, three megalopolises. Believe it or not, in a traditional tea country, sipping a latte has now become the fad of young urban Chinese! Starbucks' chief global strategist, Howard Schultz, said he expected China to become Starbucks' largest overseas market.

Did you know how many McDonald's Restaurants there are in China? More than 560 as of August. Have any idea where the biggest McDonald's in the world is? You guessed it. In Beijing, not far from Tiananmen Square. Still, the Golden Arches are outnumbered by a compatriot — KFC, which has more than 900 outlets in China.

Want to guess what the most popular soft drink in China is? Coca-Cola, no contest. In a survey conducted in nine major Chinese cities several years ago, 74 percent of the respondents chose Coke, with China-produced Jianlibao and Feichang cola lagging far behind.

American cosmetics are also popular. Avon has announced that it is planning to add another 500 boutiques to its sales network in China over the next few years, a move to further cement its leading position in the market.

American shampoo is popular, as well. Just ask Procter & Gamble. So is American toothpaste. Just ask Colgate-Palmolive.

Wal-Mart opened its biggest store in the world in April 2001. Where? In Dalian, the northeastern coastal city in China. The number of Wal-Mart stores in China reached 29 earlier this year. A Wal-Mart Sam's Club set a single-day sales record for the company two years ago — $1.7 million in Shenzhen during the Chinese New Year holidays.

Think of a business name, and it is there. Boeing, Microsoft, Weyerhaeuser. GM, Ford, Chrysler. Westinghouse, USFilter and Bechtel. The list goes on.

Not only are American products and services widely represented and sold in China, more importantly, American culture has been positively received in China.

Unlike Europeans, who view every Big Mac as a sign of American cultural imperialism, the Chinese have mostly welcomed the U.S. influence, even internalized it, as New York Times reporter Elisabeth Rosenthal recently pointed out.

There are many personal stories. My late father was a veteran revolutionary and a life-long member of the Communist Party who never traveled outside China. Though he didn't embrace all the economic reforms in China, Coca-Cola became his favorite drink during his last years.

My mother, in her 70s and living in China, had a pacemaker installed for her heart last year. Among the pacemakers available in China, she proudly told me that she had chosen the best and the most expensive — an American import.

There is really much more America in China than vice versa, much more that is positive in trade with China than negative, and much more in U.S.-China trade than meets the eye.

All in all, I am thankful that the U.S. and China are only having trade feuds, not a cold war, or worse, a hot war.

Wendy Liu is an independent China business consultant and translator living in Federal Way. She can be reached at lyw8@aol.com

Copyright © 2003 The Seattle Times Company

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