Governor Bredesen has received both praise and criticism for his recent trade mission to China. China is certainly not without its problems, including its human rights record, questionable trade practices and one-party government. But as governor, Bredesen must do what is best for Tennessee and not set American foreign policy – that is the President’s job. The success of the Governor’s trade mission is best assessed by addressing this question: does trade with China benefit Tennesseans?
China is the world’s fastest growing economy with an unprecedented growth rate of almost 10% GDP growth annually for the past 20 years. China’s leadership is optimistic it can sustain this staggering economic growth rate for another two decades.
Much of China’s growth is due to its aggressive export strategy, which has resulted in trade imbalances with several nations including the U.S. There are reasons to believe that some aspects of the U.S.-China trade relationship are improving. For example, the weakening U.S. dollar is creating pressure for China to import more U.S. goods. And with a population of over 1.3 billion, it’s virtually impossible for China to sustain the needs of its people through domestic production alone. It needs many of the products Americans and Tennesseans produce.
What does China need? First, it needs agricultural products. Even though China appears to be a large country geographically, it actually doesn’t have that much arable land. Imagine quadrupling the population of the U.S. and moving everyone to a landmass slightly smaller than Alaska. That’s roughly what the population density relative to agricultural land is like in China. As a result, China imports a lot of its agricultural needs. Tennessee can find potential markets in agriculture, such as cotton for Chinese textile manufacturing and soybeans.
Second, China’s health care industry lags far behind Tennessee, which creates a market niche that Tennessee health care experts can fill. I recently visited a leading Beijing hospital with several physicians and health care experts with ties to Vanderbilt. They were startled by the inefficiencies and immediately recognized potential areas of improvement. China needs high-tech medical equipment, skilled health care providers, better infrastructure and training and more efficient organization.
Third, the U.S. provides the finest higher education in the world and many of those schools are located here in Tennessee. Tuition-paying Chinese students are eager to gain access to our higher education. We can benefit by facilitating student exchanges and helping Tennessee students understand opportunities available to them in China. Already, many elementary and high schools in Tennessee are offering classes in Mandarin Chinese, which is spoken by more people than any other language in the world.
Other opportunities include two-sided investment as well as trade in Tennessee’s automobile, paper and printing, and other industries.
Using Tennessee’s comparative advantages to fill demand in Chinese markets brings work to Tennesseans, helps balance trade, and brings money into the U.S. If jobs and more money to families are good for Tennesseans, then trade with China is good for Tennessee.
Brett V. Benson is an assistant professor of political science at Vanderbilt University.