HUA HIN, Thailand - It is no coincidence
that Chinese President Hu Jintao is to make
Seattle the maiden stop on his first visit to the
United States as president. Every Chinese leader
since Deng Xiaoping has made it a point to spend
some time in that pleasant city of half a million
people in the contiguous United States'
northwestern corner.
Deng toured the
famous Boeing airplane-assembly plant during his
stopover in 1979. Former president Jiang Zemin
added a folksy touch by paying a call on the
family of a "typical" Boeing worker in their home.
Hu, by contrast, was due to dine on
Tuesday at the lakeside mansion of Microsoft
founder and chairman Bill Gates. He was to
be the guest of honor at
a dinner at the Gates mansion, though officially
hosted by Washington state Governor Christine
Gregoire. Local corporations are paying US$20,000
per seat to attend the dinner.
Hu was
scheduled to spend two days in the Seattle region,
touring the Boeing aircraft plant and Microsoft
campus and giving a major speech on US-China
business relations before flying on to Washington,
DC, to meet President George W Bush.
Among
the dignitaries set to greet the Chinese president
was former Washington governor Gary Locke, the
only Chinese-American to become governor of a US
state. He helped organize the visit.
Said
Locke: "Seattle is his first stop, and what he
says here will be watched closely. His speech will
have significance to the entire country, not just
in Washington state."
Locke's will be a
familiar face. He met with the Chinese president
on two previous occasions while he was governor,
the first when Hu visited San Francisco as vice
president in 2002 and later in Beijing.
Why do the Chinese love Seattle so much?
Washington is probably the most
free-trade-friendly and China-friendly state in
America. Hu will hope to build on that sentiment
as he moves east and has to deal with more
contentious issues such as China's enormous trade
surplus with the US.
Hu will probably hear
very little while in Seattle about the usual US
complaints: the undervalued yuan or the burgeoning
trade deficit. Seattle's big beef is Washington's
restrictive visa policy, which sometimes makes it
difficult for Chinese pilots to come to the US to
pick up an aircraft China has just paid $165
million to buy.
Probably the love affair
can best be summed up in two words: Boeing and
Microsoft. Both corporations were founded and
headquartered in Seattle (Boeing's corporate
headquarters moved to Chicago, but Seattle is
still the base for its extensive commercial
airplane industry) and are well known in China.
It is possible Gates is the most famous
American in China, possibly even better known
(certainly better liked) than Bush. Add to the mix
the giant Starbucks coffee chain. Its original
coffee shop is still open on the Seattle
waterfront, although Hu's entourage would not fit
in it.
Said Joe Borich, executive director
of the Washington state China Relations Council,
"On a per capita basis, Washington does more trade
with China than any other state." The official
figure is about $5 billion annually in exports,
mostly aircraft.
One local complaint is
about intellectual-property protection. It has
been estimated that 90% of the computer operating
systems in China are pirated. Nevertheless,
Microsoft has been remarkably tolerant about this,
apparently taking the long view that the China
market would pay off some day.
Last year
Microsoft fought a fierce court battle over breach
of contract to prevent its China head from jumping
ship to run Google's operations there. Hu was
expected to make a major pronouncement on
intellectual-property protection during his visit.
Indeed, Starbucks in January won a
trademark lawsuit against a Chinese company that
had used its name and logo, translated into
Chinese, without the Seattle company's permission.
A court ordered the Shanghai Xing-Bake Coffee shop
to pay Starbucks 500,000 yuan ($62,500) in damages
(see A victory for Starbucks in trademark
war, January 20).
While in
Washington state Hu will tour the mammoth Boeing
aircraft-assembly plant north of Seattle. Boeing's
fortunes were buoyed at the beginning of last year
when Beijing, on behalf of six Chinese airlines,
ordered 60 of the company's latest-model jetliners
at a cost of more than $7 billion.
In
gratitude Boeing said it had officially named the
series the Boeing 787, adding the numeral 8
because of its significance in Asia as a symbol of
prosperity. (However, the 787 was the next number
in the Boeing series, the last aircraft being a
777.) The first Chinese Boeing 787s should be in
service by the 2008 Summer Olympic Games in
Beijing.
The company is hoping the visit
will help it regain its former dominance in the
Chinese aircraft market. At one time Boeing made
eight out of every 10 new jetliners in Chinese
service. In recent years the European Airbus has
been making serious inroads, and Boeing now sells
roughly six of every 10 airplanes in China.
Washington was among the first states to
take advantage of China's historic market opening.
As far back as 1980, one year after Deng's first
moves toward opening the market, Seattle interests
snared COSCO, the Chinese shipping line. The first
Chinese merchant ship to visit the US since the
beginning of communist rule in 1949 stopped at
Seattle that year. Chinese ships continue to
disgorge roughly $20 billion in Chinese exports to
the US through the busy Port of Seattle.
The Washington state China Relations
Council, founded in 1979, is the oldest such
state-run organization in the country. Its
founding director Bob Kapp went on to head the US
China Business Council in Washington, DC, the
premier pro-China lobbying organization.
But for all of this history, there is very
little Chinese investment in Seattle or Washington
state as a whole. For many years China
International Trade and Investment Co (CITIC)
operated out of the towering Columbia Center in
downtown Seattle, mostly buying timber. But it
closed down last year, as the market moved to
lower-cost producers.
The largest Chinese
concern in the region is a firm called Xoceco,
which makes flat-panel television and computer
screens and has its headquarters in the suburb of
Bothell just north of Seattle. But it only employs
about a dozen people here.
According to
Kent Zhang, who handles China trade for the
Washington state Department of Trade and Industry,
China's buying patterns are changing with its
growing wealth. Where it once bought timber and
clams, wealthy Chinese are looking to buy yachts.
Chinese hospitals are shopping for ultrasound
equipment.
The big Boeing 747 freighters
that disgorge mobile telephones at Seattle's
airport by the tens of thousands now go back to
China loaded with Washington state agricultural
delicacies such as cherries, asparagus and cut
flowers.
Todd Crowell is a
correspondent for Asia Times Online based in
Thailand.
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