China’s Next President in Iowa

The presumed next president of China, Xi Jinping, is in Washington this week meeting with President Barack Obama. Besides heading to Washington, Xi is also visiting Los Angeles and Muscatine, Iowa.

You may be wondering: Why is China’s soon-to-be most powerful man visiting Iowa? The short answer is, well, he likes it. 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 back 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,” said Branstad.

Xi also 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’s 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,” said Branstad. “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” — that means getting Chinese companies to build factories and offices here in the US. 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 jobs.

Some politicians are making hay of this. Check out this commercial recently run in the Michigan Senate race by Republican Pete Hoekstra attacking Democratic incumbent Senator Debbie Stabenow.

(For those who don’t want to or can’t play this video, you’d see a young Asian woman riding a bicycle through ride paddies then saying in broken English, “Thank you Michigan Senator Debbie-spend-it-now. Debbie spend so much American money, you borrow more and more from us. Your economy get very weak. Ours get very good. We take your jobs. Thank you Debbie-spend-it-now.”)

After considerable controversy, The Hoekstra campaign removed the commercial from its Web site.

In Iowa, I asked a lot of people what they thought of China, and Chinese competition. And what they think about Iowa state leaders wooing Chinese leaders. Bed and breakfast owner Annie Gerkin succinctly said what just about everyone in Iowa told me: “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,” said John Gerkin. “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 them (Chinese companies) occupy.”

Newton is a town that badly needs jobs. The city lost thousands of them 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.”

Jenny Michael added, “My husband works for Haier Appliances. He travels to China quite a bit. It’s a long trip over there, when you do have to go, but it seems to be a pretty good relationship.”

State leaders stress the importance of the relationship between China and Iowa. Debi Durham, director of the state’s Economic Development Authority, says manufacturing and business will always gravitate to the cheapest place for low-skill labor. But Durham says 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.”

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 their tractor-building job in Iowa. And American politicians running for office know that blaming incumbents for letting jobs go to China makes for 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.