China's astounding 11%-plus GDP growth rate in the first quarter announced Thursday was one of those periodic reminders about its role as a growth engine of the world economy. So was the government's usual warning about taking steps to reign in growth through tighter monetary policy or greater regulation. No coincidence then that combination of events has been known to trigger selloffs on world stock markets, which was partly the case today.
It is something of a coincidence, however, that on the same day a major conference on China kicked off in New York. Henry Kravis of Kohlberg, Kravias, Roberts, Jerry Yang of Yahoo! and Steve Chen of YouTube are among the heavy hitters attending the Committee of 100's annual Bridge to Change Conference. It's the sixth time the organization of Chinese-American leaders has put on the major gathering.
The conference, which runs through April 21, covers the gamut when its comes to China's economy. Of course, there's the usual front-burner issues such as investing and doing business there, but the event is also covering such subjects as new media, going green and the changing face of the consumer.
Four Views On Trade
Trade policy with China is the kind of subject that draws heated debate and extremes in opinions. Such is the case with Daniel Ikenson, a policy analyst at the Cato Institute's Center for Trade policy Studies and Alan Tonelson, a research fellow at the U.S. Business and Industry Council who thrashed things out on "Morning Call."
Advocates of a tougher policy often cast China as something of an evil empire, while their opponents are wont to characterize as a gifted, growing child.
Tonelson says China's leaders "want to achieve global industry supremacy and they will stop at nothing." Such a goal requires a calculated and managed approach to trade, a "system geared to overproducing and sending the surplus overseas." China, he adds, is "desperate to create jobs."
Tonelson says Beijing's global ambitions are also somewhat militaristic. "China wants more military power and global influence." That requires cash and a gradual yet concerted effort to improve its manufacturing ability such that it progressively produces higher-quality goods.
Ikenson's views reflect the "what's good for China is good for us" philosophy, saying "we've all benefited from China's membership in the World Trade Organization," adding any that any tough action on trade should be taken to and decided by the WTO.
He also says the Bush Administration deserves high marks for its China policy, which has avoided confrontation and punitive measures. Unilateral tariffs, says Ikenson, could "spark a trade war."
In a less contentious exchange, Myron Brilliant, the U.S. Chamber of Commerce's VP for East Asia, and Pat Mears, spokesperson for the National Association of Manufacturers broke down the issues on "Power Lunch."
Mears and Brilliant agree that trade disagreements don't have to create huge friction and can be resolved by the WTO. Brilliant does believe that the U.S. "is prepared to take action" on the issue when necessary as it pursues its "dual strategy", which also includes engagement.
As for the rift over the the value of the Yuan, Mears says the "currency problem is really becoming a problem for them".
Investing In China
As great as the opportunities are, many market strategists warn against direct investing in the Chinese market. There's a small but growing number of Chinese multinational firms that trade on U.S. and other global stock exchanges, but the ticket for most investors is through mutual funds.
Christopher Smart, head of international investing at Pioneer Investments, whose portfolio includes the Pioneer Emerging Market Fund, and Guojia Zhang, portfolio manager of the Delaware Emerging Markets Fund, shared some of their stock picks with Erin Burnett.
Smart's include China Shipping Development and China Communications Construction, while Zhang's include China Unicom and China Merchants Construction.
Communications, construction, infrastructure and logistics are all areas seeing huge investment.
Speaking The Language
One can make an early investment in China by learning one of the language's main dialects. Investors and businessmen may have plenty of reason for speaking the language, as might a whole generation of young Americans. Forget about Spanish. How about Mandarin? And as with any language, it helps to get a head start. Darcy Dunn reports on a growing trend in the nation's schools.