Obama China Apec – The head of Boeing chose his words carefully at Apec as he explained to President Obama the “dilemma” that Corporate America faces in trying to do business in China.
“We see a world where our interests lay in both competing with China … and also engaging with China for access to its market,” Jim McNerney, Boeing Co’s (BA.N) chief executive officer, said on Saturday as he interviewed Obama at the APEC business leaders’ summit.
“How would you assess the U.S.-China relationship when voices now on both the left and the right are calling for a harder line from your administration?”
Obama did not miss a beat, providing a perfectly bland response that there can be “friendly and constructive competition” between the world’s two biggest economies.
But Obama clearly took Corporate America’s concerns into consideration when he met privately with Chinese President Hu Jintao on the sidelines of the Asia-Pacific Economic Cooperation forum on Saturday.
“He made it very clear that the American people and the American business community were growing increasingly impatient and frustrated with the state of change in China’s economic policy and the evolution of the U.S.-China economic relationship,” said Michael Froman, a senior White House adviser on international economic affairs.
A day after his tete-a-tete with Hu, Obama laid on another layer of criticism before a bank of television cameras. He said the relationship was “off kilter” and China was too “grown up” now to flout international rules.
Obama’s aides have said the president reserves his strongest language on China for closed-door meetings, so it was unusual to hear such sharp words made public. Rebuking Beijing publicly can backfire because Chinese officials are loathe to give the impression they are bowing to U.S. pressure.
The tougher U.S. tone is all talk for now. But if American companies conclude the cost of doing business in China outweighs the benefits, it could herald a fracturing in the world’s most important international relationship.
China’s undervalued currency and lax protection of intellectual property top the list of business complaints. Obama regularly raises those issues.
On the other side of the equation are China’s estimated 300 million middle-class consumers, a population almost as large as the entire United States and a potential gold mine for U.S. businesses looking for faster growth.