Since I had stayed up late yesterday night, I was slow to get up. But having showered, gotten dressed in business casual attire, and eaten a cliff bar, I was prepared for today’s excursions! We all boarded the bus and made our way to the American Chamber of Commerce just an hour from our hotel. AmCham Shanghai serves as the largest chamber of commerce in the Asian-Pacific Region with 3,000 constituent members representing roughly 1500 companies. AmCham Shanghai has existed for a total of 104 years broken into two periods. Upon the establishment of the People’s Republic of China and the ascension of the Communist Party of China as the dominant political faction in 1949, the AmCham Shanghai was eradicated. It was then reintroduced to the city several years later.
To my surprise, we exited the bus at the same location of last night’s acrobat show in the Ritz-Carlton. We walked to a different area of the plaza, entered the AmCham office space and were seated in a conference room in front of Dan, a member of the government relations committee for the United States, and Chris, a businessman of PNC bank. Both Dan and Chris are originally from America but moved to Shanghai to further their careers. Their lecture was incredibly insightful and well-executed, as both were incredibly knowledgeable in their area of work. Additionally, Dan and Chris, having lived in both China and the U.S., were able to provide a diversified and broad-based lecture while helping us to understand the differences between the Chinese and American economies. Although their presentation and discussions spanned over 2 hours, I will try to summarize the main topics of our discourse, as I believe they are crucial to apprehending China’s economic environment. Dan and Chris began by recounting the unprecedented growth of the Chinese economy over the past 40 years. This expansion, which is often referred to as China’s economic miracle, is the longest sustained economic development in the world’s history. Impressively, China endured exogenous and internal economic shocks quiet well, such as the East Asia Financial Crisis and the stock market collapse of 2009. China is projected to surpass the U.S. in terms of gdp with a supposed growth rate of 6% (although economists typically calculate a figure of 3-3.5%) in comparison to America’s growth rate of 1-1.5%. I’m interested to see whether the resilience of the Chinese market will persist as a potential economic recession looms in the future and the workforce decreases due to the child policies. Throughout the lecture, several key points of divergence between the American and Chinese markets became obvious. First, the vast majority of the United States’ gdp is due to consumption whereas the Chinese gdp is dominated by exports and government spending. Second, the restrictions of many digital services in China leads to a new ecosystem of applications. Thus, the manner in which marketing is carried out is much different, especially when considering the popularity of e-commerce. Third, government transparency in the U.S. differs greatly from the opaqueness of government proceedings in China which complicates business stratagem and development. At the conclusion of the meeting we thanked our presenters and left for a quick lunch. We were soon back on the road en route for a Horiba R&D and Production facility.
We were warmly welcomed and directed to a classroom for a brief video and presentation. Horiba is a Japanese manufacturing company for precision measurement instruments. The company has diversified into the medical, environmental, semiconductor, scientific, and automotive testing industries. After this introduction, we were given a tour of several departments of the facility, including automobile testing, medical instrumentation, and environmental analysis tools. Reconvening in the lobby area, we took a group picture, thanked our lecturers, and boarded the bus to return to the hotel.