Chinese companies will eventually start coming to places like Tennessee regardless of whatever economic incentives the state puts on the table.
That was the message delivered Monday to a group of local businessmen and women with interests in investing internationally by former U.S. Sen. and Ambassador to China Jim Sasser.
Sasser, who represented Tennessee in the U.S. Senate for nearly 20 years before serving as President Bill Clinton’s ambassador to China from 1996 to 1999, on Monday spoke before a joint meeting of the Nashville Committee on Foreign Relations and the CFA Society of Nashville — the local branch of the global, not-for-profit association of investment professionals.
After offering his insight about the economic, social, military and governmental status and future of China and Sino-U.S. relations, Sasser was asked to assess Gov. Phil Bredesen’s recent trade mission to China. On a nine-day mission last month, Bredesen, along with business and other industry leaders, traveled to China to develop new markets for Tennessee companies there.
“I don’t have any specific advice for the governor,” said Sasser. “But I think what you’re going to see is that the Chinese are going to start following the Japanese pattern” of building manufacturing plants in the United States to avoid excessively high tariffs imposed by Congress.
Sasser said that after Congress began passing tariff bills aimed at slowing the huge tide of Japanese cars flowing into the U.S. market, Japan responded by opening their own automobile manufacturing plants on U.S. soil., including the Nissan plant in Symrna.
He predicts that as the Chinese economy continues to grow and Chinese companies continue to market products in the United States, those companies may follow Japan’s lead and bring some of the manufacturing plants here to avoid high tariffs.
“The Chinese may face hostile legislation, especially if the U.S. economy turns toward recession,” Sasser said. “The best thing the U.S. can do is to continue to build up our relationship with China.”
Bredesen attempted to do just that on his trip — leading some 80 state officials, businesspeople and lobbyists to China on a trade mission designed to recruit even more Chinese business to Tennessee, and also further the Chinese consumption of Tennessee products.
According to the Tennessee Department of Economic and Community Development, the U.S.-China Business Council lists Tennessee as having the fastest-growing trade relationship with China among U.S. states over the past five years.
During that period Chinese purchases of Tennessee products grew 1,103 percent, with Chinese customers purchasing $1.8 billion dollars worth of Tennessee products in 2006, putting China third on that list behind only Canada and Mexico.
On his trip, Bredesen sent a blog reporting that Tennessee officials had signed a “significant Letter of Intent …at the Ministry of Health providing a framework for working on investment for Chinese businesses in Tennessee and vice-versa.
“There is some real scope here to develop jobs in Tennessee,” wrote the governor. “We are talking with them about a different approach in Tennessee, of finding a ‘constellation’ of opportunities in areas like the automotive parts industry where the investments are smaller and don’t engage with major national issues. There are real opportunities here, and it is something we are going to work on in the months ahead.”