With huge potential profits at stake, corporate America is worrying about the fallout from the diplomatic crisis. Blue-chip U.S. companies like General Motors and Motorola have made a big bet on China, investing more than $25 billion there over the last 20 years. With a market of more than 1.2 billion people, China has long been viewed as capitalism’s next frontier by American companies. Now, just as China is poised to lower trade barriers to enter the World Trade Organization, American business sees its carefully laid plans threatened by congressional hard-liners’ talk of sanctions. “We hope cool heads will prevail and that we get this unfortunate incident behind us quickly,” said Michael Eskew, vice chairman of United Parcel Service, which last week initiated the first direct U.S. cargo flights into China since World War II. UPS says it received some criticism for flying into China while 24 Americans were being held there, but the company pressed on. The first UPS plane to arrive in Beijing Monday was greeted by Chinese schoolchildren singing “It’s a Small World After All.” UPS rolled out a big ad campaign with the slogan “China’s 1.26 billion people can’t wait to get your products.” “We’ve done a lot of work to get this flight up and we want to let folks know,” says Eskew, who expects UPS will do $100 million in sales to China this year. “You don’t get another chance.”
With so much at stake, business lobbyists are working their connections to promote harmony between Washington and Beijing. “No one wants to see this spill over into other areas of U.S.-China relations, like commerce,” says Myron Brilliant, Asian specialist for the U.S. Chamber of Commerce, who met and discussed the standoff with Chinese Ambassador Yang Jiechi last week. The ambassador is scheduled to return to the chamber this week to meet with American business executives, who are eager to maintain good relations.
Some critics see U.S. corporations taking China’s side and weakening Bush’s hand. “The Chinese are very aware they have an ally in the American business community,” says foreign-policy analyst Robert Kagan of the Carnegie Endowment for International Peace. But U.S. businessmen argue that friendly relations with China serve America’s interests. “It’s important that there is calm on both sides and a positive attitude to resolving this,” says Jacques Nasser, CEO of Ford Motor Co., which builds vans in China. “As sad as it is, you do need to look beyond individual incidents.” And American business can’t wait to put this incident in the rearview mirror.
