Sep 11, 2012

This was the week that changed the world, as what we have said in that Communique is not nearly as important as what we will do in the years ahead to build a bridge across 16,000 miles and 22 years of hostilities which have divided us in the past. And what we have said today is that we shall build that bridge.
Richard Nixon, February, 1972, in Shanghai

When the communists, led by Mao Zedong, took over China in 1949, the U.S. severed all ties with the communist country. Those who fled to Taiwan set up a new government, which the U.S. now recognized as the “capital of China.” This led to a not so cold war between the U.S. and China that would last for more than two decades (Remember when Mao Zedong flooded Korea with hundreds of thousands of Chinese trips during the Korean war?)

As the years went by, China realized it needed the technology the U.S. possessed for its nation to grow. When the Nixon administration started making subtle overtures to the Chinese in the early 70s, the time was ripe. Henry Kissinger was sent to Beijing in the summer of 1971 to pave the way, and the stage was set for Nixon’s visit on February 21, 1972.

This was a radical move on Nixon’s part. It would be like president Obama flying to Iran or North Korea and suddenly making nice with them. What would precipitate such a risky move on Nixon’s part? At the time, Communism had swept through Eastern Europe, the U.S.S.R., China, Cuba, North Korea, and was being fought for in Vietnam. The arms race with the U.S.S.R. was on and the cold war was at its peak. Anti-communist paranoia came and went in waves in the U.S. It made sense to reach out to China, who, at the time wasn’t seeing eye to eye with the Soviet Union.

What many didn’t know was that Mao Zedong was barely functioning during Nixon’s visit. He had been sick in the weeks leading up and needed help getting it together. Mao met with Nixon briefly just one time, soon after Nixon’s arrival. Chinese premier Zhou Enlai did the heavy lifting for the rest of Nixon’s visit.  

Both sides eventually put the Shanghai Communique together during that trip, where they agreed to disagree on Taiwan and work towards normalizing relations.  

History turned on Nixon’s visit, and the results are stunning. China’s 7 trillion dollar economy is now the second largest in the world. They’re the world’s manufacturer and its banker, with 3.2 trillion dollars in foreign reserves. Their standard of living has shot up.

Opening the doors to China has also made a difference culturally. Estimates are that there are between 50 – 100 million Christians there. China, a country that was a destination country for missionaries for other countries, is now sending them out to other parts of the world. There’s still work to be done there, of course. During a visit earlier this year one of my Chinese partners told me that “Chinese people have money but no life.” They’re still finding their need for God just as the rest of us are.

From the American point of view, whether opening the doors to China was a good thing can be controversial. There’s the outflow of jobs, problems with product piracy, and the loss of American economic domination in some areas. We’ve gone from the world’s largest creditor to its largest debtor – and the Chinese are our largest banker. Yet, we can’t blame all of our problems on China; if not China it would be another country that we were competing against in the global economy. Our never-say-no-to-a-juicy-pork-and-entitlement-bill politicians who love to tax the big, bad, American manufacturing companies are always quick to blame someone else for our unwillingness to get our own fiscal house in order. 

Wherever you stand on these issues, the fact is that Nixon’s visit to the Middle Kingdom in 1972 was a game changer. I wonder what he’d have thought if he could see where things have gone today.

Sources: 1972 Nixon Visit to China

Free Wood Business Card Box

I visited a manufacturer of wood products earlier this year who does excellent work. They make products of all kinds out of wood, including boxes, office products, items used in hotels, pens, and more. They can also laser engrave letters, logos and pictures. I have some business card boxes made from rosewood and maple I can send you to show the quality they can make. If you’re based in the continental U.S., I’d be happy to send you one at no cost. Email me with your address and I’ll send one out.

Wood boxes make an instant upgrade in quality perception; for some of you it might make sense to look at packaging your product in a wood box.

The Exchange Rate

Yuan to the dollar, as of today: 6.33 to 1
Rate when the Yuan was depegged from the dollar on June 19, 2010:  6.82 to 1
Change: .49 (7.1%)

About Us

Since 1991, Global Trade Specialists, Inc. has helped companies of all sizes get their products made in China from manufacturers of quality products. We are an American company who works with three trading groups in China with immediate access to thousands of manufacturing companies. We source most products made from metal, plastic, wood, stone, glass or textiles; from prototype to production. Many of our customers are first time importers; we walk you through the entire process.

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Previous Newsletters:
August: Who’s the Bad Guy Here?
July: We’re not in Kansas Anymore
June: Impressions from a Visit to China
May: The U.S. Gets What it Wants, But…
April: Of Beads and Streams
March: The New China Blog

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