A lot is happening with Michigan’s business relationship with China these days.
Shortly after losing out to Wisconsin for a massive new Foxconn facility, Gov. Rick Snyder signed into law a major tax incentive package designed to attract Foxconn and other foreign corporations to the state. Now, the Taiwanese electronics manufacturing giant is rumored to have plans for a smaller facility in Michigan after all.
Last week, Snyder met with Chinese Premier Li Keqiang in China. Premier Li said his country will create a more open environment for subnational cooperation, encouraging states and Chinese provinces to work out two-way trade and investment.
Scott Kennedy is the deputy director of the Freeman Chair in China Studies and the director of the D.C.-based Project on Chinese Business and Political Economy at the Center for Strategic and International Studies based in Washington.
“Over the last few years, companies have become more frustrated with China due to China’s mercantilist policies, so he’s trying to shift the focus and give people more hope,” Kennedy said. “He’s trying to give American companies … a greater confidence that China is going to reduce barriers to trade.”
Kennedy doesn’t believe this boost in subnational trade will shift the overall trade deficit the United States has with China. Trade between the two countries was $650 billion in 2016.
Hong Lei is the consul general for the People’s Republic of China in Chicago. According to Hong, China is Michigan’s third-largest trading partner, and Michigan-Chinese trade is worth $12 billion annually. Chinese businesses have invested $2 billion in the state and created over 9,000 jobs.
“All these activities give a vibrant dynamism to our relationship,” Hong said.
He said Snyder’s business trips to China have been an important part of strengthening that relationship.
“He made a lot of friends there and also expanded the trade and investments on the Chinese side,” Hong said.
The situation could be similar to other issues in the Trump era such as climate change, Kennedy says, where states take issues into their own hands when they don’t agree with Washington’s policies. But actions the White House takes could still present significant roadblocks.
“Despite the realities that there is an uneven relationship between the U.S. and China, the level of trade and investment is huge … and a lot of that occurs at the state level,” said Kennedy.
Though President Trump has been critical of the trade deficit between China and the United States, Hong said China is excited about what he sees as a healthy, positive relationship between the two countries that will continue into the future, and says Michigan is a part of that.
