Chicago Is a Good Start

PRC Chairman Hu Jintao’s 2011 trip to America began in Washington and bid farewell in Chicago. If it is said that Washington’s political maneuvering is a kind of hard power, the advertisement broadcast by China in New York and Chicago reflects soft power. The propaganda effect of Yao Ming and Lang Ping’s exquisite film in Times Square, being shown thousands of times, remains to be seen. Furthermore, Chairman Hu’s Chicago trip undoubtedly opened the door to culture and trade and allows Americans to come into contact with China’s national core intentions.

January in Chicago is precisely in the middle of winter’s coldest time, but the respectable Chinese visitors went into the wind and snow. Many people were trying to guess where the Chinese would visit. They were perhaps thinking that Chicago has Boeing’s headquarters, and Boeing depends on a visit from the Chinese delegation. Some people believe the Chicago city government and mayor’s office lobbied for this PR visit for many years. Some people also point out that China has many influential people. If Lin Yifu was taught in Chicago, maybe it is a good place to start. Also, many people relish to point out that Chicago is the hometown of President Obama. The Chinese guests came from so far away that how could they not give face?

Of course, these reasons play a role in the decision to come to Chicago, but one must also add one. China is willing to deal with the broader United States. President Hu Jintao has previously visited many U.S. cities, such as New York, San Francisco, Seattle, Pittsburgh and even Honolulu, but he has never been to the central United States or Chicago. In the United Sates, Chicago’s position is similar to Wuhan in China. It is the hub linking the East to the West, both on behalf of the U.S. manufacturing industry and the agricultural trade. China can use influence in Chicago to enter the American market’s “hinterland.”

We must also note that the Chicago mission not only consisted of China, but was also supported by players from Hong Kong and Macao. As one of Chicago’s sister cities, Shanghai also sent a large delegation and held a signing ceremony during a local economic and trade-cooperation forum. There were five Shanghai contracts signed, accounting for one-eighth of the number of contracted projects. The mayor of Chicago also visited Shanghai during the recent Shanghai World Expo.

Hong Kong’s Great Eagle Holdings also announced funding a new hotel, called the Langham Hong Kong Luxury Hotel, to be built in the IBM building in downtown Chicago. Chairman Lo Ka-shui said Hu’s U.S. visit is providing a new impetus for bilateral relations. Chinese enterprises will be able to find new investment opportunities in cities other than New York and Washington. Chinese investors will not face the same criticism that Japanese investors faced many years ago.

The reason lies in the present lack of prospect for an American economic recovery. The Democratic Party suffered a serious loss in the midterm elections. For the next two years, the Obama government has an urgent need to show an improvement in the economy. Therefore, presently, anti-China economic and political circles warn against Chinese investment, but the investment community in general is waiting for China to reach out its hand. Sources confirm that the U.S. is preparing to establish a Sino-U.S. local investment platform to help Chinese enterprises invest in the U.S. For Chinese enterprises, investment in the U.S. is not just a gift bag, but also a cushion for both sides because of overall mutual economic dependence. Chinese investment in the U.S. will move China in the direction of diversification and reduce excess domestic liquidity pressure, reducing the risk of shrinking assets. Although the cost of labor in the United States is high, the land, water, low-cost energy resources, market mechanisms, property protection and low trade barriers are benefits. Meanwhile, the RMB appreciation would reduce investment costs as well.

Of course, any investment has risks, and Chinese enterprises investing in the U.S. must be familiar with the situation on the ground and play by American rules. Fortunately, Chicago is a beginning, and more and more Americans — through the Confucius Institute, Chinese enterprises and other direct contacts — learn Chinese and Chinese culture. This is like the friendship between people developing from strangers into friends. A healthy partnership between China and the U.S. is the common goal.