Ecosystem Supports Washington State Trade with China

By Doug Barry

Times are tough but Washington companies want trade with China to expand. Hundreds of companies in the state work with and get support from an ecosystem of business associations, government agencies, universities, and others. Each state’s ecosystem is different, but they generally include resources for market intelligence, information sharing, advocacy, business development opportunities, and more. 

One such connector and convener in Washington is the Washington State China Relations Council (WSCRC) and its executive director Norwell Coquillard who has worked in China and other parts of Asia for more than 30 years, including heading Cargill’s China operations and serving as chairman of the Shanghai American Chamber of Commerce. 

“WSCRC member companies all have interests in China, work in China, do business with China, know the value of exports to China,” said Coquillard. “Businesspeople are eager to keep businesses and lines of communications open.” He explained that his members are concerned with what is happening in Hong Kong, Xinjiang, and Taiwan but “they support improving the relationship, particularly the economic relationship, between the two countries.” 

Walking a fine line 

He insists that the commercial relationship needs to be separated from other areas of policy disagreement, drawing on his experiences from the Soviet grain embargoes of the 1970’s which harmed US farmers and established new competitors without creating desired changes in the Soviet system. He noted that trade should be used as a means for the United States to engage China when quick agreement on other difficult issues is unlikely. He and his members believe that competition and cooperation can and must coexist. 

That’s a message that the group takes to Washington’s Congressional delegation, pointing out that, in 2020 and the first half of 2021, US exports to China increased by double digits, supporting more than 800,000 US jobs including many in Washington, whose China exports were up 16 percent over this period, although still well below the peak numbers of the 2015-2017 period. They would have been much higher if China had purchased more airplanes from Boeing. Representative Rick Larsen, head of the US-China Working Group in the US House of Representatives, meets often with WSCRC with whom he shares a belief that it’s important to increase business with China in an effort to improve the overall relationship. 

“During one webinar with Representative Larsen, we talked about the need for congressmen and congresswomen to learn about China so that they understand the issues from historical, cultural, and social perspectives,” he recalled. “It’s challenging to educate because oftentimes the willingness to learn is not there, especially among the hawkish members.” A record number of bills, most with an anti-China patina await action in this Congress. 

“If you let Huawei become the only player in 5G, worldwide competition will be gone, and that’s not a good thing.”

It wasn’t always how it is now. As recently as five years ago, staff were highly encouraged to learn about China, including traveling there as part of official delegations. None of that is any longer in vogue, according to Coquillard. What happened? 

“After the 2009 financial crisis, China has become a lot more assertive and believed that they did not have many more lessons to learn from the US. Xi Jinping’s coming to power also massively changed the dynamic.” In his telling, China’s leaders developed their own theories, including self-reliance, more aggressive policies towards the outside world, and a belief that their model of governance was superior to that of the west, which they perceive is in rapid decline. As China’s leaders became more assertive globally and increasingly favored domestic companies over foreign companies, the US Congress became increasingly wary of China’s intentions, both strategically and economically. 

Computer chips to potato chips 

How to continue to sell Boeing airliners, cherries, apples, wine, computer chips, and other goods and services in the face of these challenges? WSCRC redoubled efforts to put a floor under the relationship and to build back some trust. One way to do that is by working with provincial governments to seek business opportunities, as important spending decisions are made there and not in Beijing. Provincial leaders tend to be pragmatic and are responsible for providing services and generating jobs for their citizens who can number in the tens of millions. But travel restrictions due to the pandemic have made it tough to maintain these relationships. 

“We feel like we are treading water right now to help people think about and connect more with China,” he said, reflecting a kind of nervous stasis apparent in other states’ business groups. Undaunted, WSCRC networks across the nation, sends letters to USTR, and provides a steady flow of information to congressional staff regardless of the suspicious or dismissive reception they get from some of them. “We must make sure that our government leaders have the right information about China and our relationship with it.” 

Coquillard believes the hawks make some important points that need to be addressed. One is that China needs to open its economy wider and reduce its trade surplus with the world. Foreign companies must be treated fairly in the China market. Also, policymakers in the US can’t cede important markets to Chinese firms. “If you let Huawei become the only player in 5G, worldwide competition will be gone, and that’s not a good thing.” 

Meanwhile, WSCRC looks for areas of collaboration and common interests. Earlier in September, the China-US Province-State Green and Low-Carbon Cooperation Seminar and Matchmaking Meeting was held in Xiamen, Fujian Province, on the side of the 2021 China International Fair of Investment and Trade. Washington business communities and government representatives attended the meeting virtually and the Lieutenant Governor of Washington, Denny Heck, delivered video remarks. The focus of the meeting was on climate change — a common interest, though not one without problems, politics, and paradoxes. 

“Good relationships can and must be maintained,” he insists.