The presumed next president of China, Xi Jinping, is in the United States this week meeting with President Barack Obama.
But besides meetings in Washington, Xi is also traveling to Los Angeles and Muscatine, Iowa.
You may be wondering why China’s soon-to-be most powerful man is visiting small-town Iowa? The short answer is, he likes Iowa. Xi visited Iowa in 1985 when he was a low-level Chinese bureaucrat. He met with current Iowa governor Terry Brandstad, who also served as governor during Xi’s 1985 visit.
“He stayed with a family down in Muscatine who had two sons in college and a 13-year-old daughter. And he was very impressed with the friendliness, the hospitality and the way he was treated in Iowa,” Branstad said.
Xi toured farms and went to a baseball game. On Wednesday, the Chinese vice president will reconnect with the family that hosted him in Iowa. But he’s not just stopping by to say hello to old friends. He’ll be there to shore up business ties too.
In Chinese culture, a cup of tea before business still matters. And Xi has already done that with Iowa’s leaders.
“Obviously in that culture, we think that could be extremely important,” Branstad said. “We’re already selling a substantial amount of soybeans, corn and pork in China. John Deere is building a plant there. And we think the opportunity is there for reverse investment as well.”
Reverse investment means getting Chinese companies to build factories and offices here in the U.S. That would be an ironic twist. According to a recent study from the Economic Policy Institute in Washington, the trade deficit with China cost the US 2.8 million jobs between 2001 and 2010. Iowa lost 22,000 of them.
And while China is relatively popular in Iowa, it's proven to be a popular political punching bag in elections across the country. Check out this commercial recently run in a race for one of Michigan's U.S. Senate seats. It was run by Republican Pete Hoekstra attacking Democratic incumbent Senator Debbie Stabenow.
After considerable controversy, The Hoekstra campaign removed the commercial from its Web site.
In Iowa, though, ask people about China, Chinese competition and the state wooing Chinese officials and there's a much less angry reaction. Bed and breakfast owner Annie Gerkin succinctly succinctly summarized the feelings of most of her neighbors: “Why not?”
Gerkin and her husband John – who own the August Bergman Inn in Newton, Iowa – both said they don’t hold any grudge against China.
“Money is supposed to work that way, isn’t it? You spend it, it goes to China, try and bring it back in,” John Gerkin said. “I know four or three nice-sized buildings right out here on the outside of town that the city of Newton would love to have (Chinese companies) occupy.”
Newton is a town that badly needs jobs. The city lost thousands when Maytag closed its doors in 2007.
Frank Liebl and Jenny Michael, who together run the Newton Development Corporation, say state and local officials had better try and bring the Chinese here, because they are coming to the US.
“The costs of making these products in China and shipping them across to the United States is getting to be more than they can handle,” said Liebel. “So I think for the alternative, it’s, ‘Hey let’s take a look at North America.’ As a matter of fact, Jenny’s husband works for a company that is based out of China.”
Michael's husband works for Haier Appliances. He travels to China frequently. It’s a long trip, when you do have to go, she said, but he has a good relationship with those in China.
State leaders stressed the importance of the relationship between China and Iowa. Debi Durham, director of the state’s Economic Development Authority, said manufacturing and business will always gravitate to the cheapest place for low-skill labor. But Durham said even though Iowa has lost jobs to China, the state still benefits from the relationship.
“Even though our manufacturers are opening up space there (in China), for instance John Deere being one, John Deere continues to grow in Iowa and reinvest in Iowa,” Durham said.
In other words, if John Deere can build cheaper tractors in China, that helps keep engineers and marketing folks at work in Iowa.
That might be cold comfort for someone who lost a tractor-building job in Iowa. And American politicians running for office know that blaming incumbents for letting jobs go to China makes a good sound byte.
But Iowa’s leaders say it’s time to move past this type of talk. And they’re welcoming the next president of China with open arms.