Author: Yang Ge
Posted on: Caixin Global, December 8th, 2016
American business leaders were upbeat on the naming of a new U.S. ambassador to China, optimistic that Iowa Governor Terry Branstad will be able to use his years of related experience and relationships to improve trade relations between the world’s two largest economies.
As the long-serving governor of the central U.S. state, Branstad has a relationship with China dating back to 1985 when a Chinese delegation — including a then-31-year-old Xi Jinping — made a visit to study the state’s agricultural practices. Since then, Branstad has been a strong supporter of trade in Iowa’s agricultural goods with China, and describes Xi, now China’s president, as an “old friend.”
U.S. business leaders in China welcomed Branstad’s appointment by President-elect Donald Trump as a positive signal, saying his personal relationships and familiarity with both countries and their respective trade issues should benefit both sides. They also applauded his skills as a go-between who could help the two sides bridge their differences.
But they also cautioned that Branstad may have to tone down his Iowa folksiness and subvert his personal relationships to the agenda of the new President Trump, who sees China as a currency manipulator, protectionist trader and stealer of U.S. jobs.
Branstad’s appointment comes as a more-positive signal from Trump, who over the weekend sounded a tougher note when he accepted a congratulatory call from Taiwan leader Tsai Ing-wen on his presidential victory late last week. Beijing considers Taiwan a renegade province, and sees direct contact with its leaders as interference in its internal affairs.
“He has made many trips to China on trade missions promoting both Iowan exports and looking to attract Chinese investment to Iowa, so he understands many of the issues around trade,” said Kenneth Jarrett, president of the American Chamber of Commerce in Shanghai, speaking of Branstad’s appointment.
“We have every reason to believe he will be a strong supporter of American businesses operating in China. Having someone with Governor Branstad’s experience working with China and its leadership should lead to further development of the U.S.-China bilateral relationship and new opportunities for American businesses.”
Branstad is the longest-serving governor in U.S. history, with six terms and 22 years leading the agricultural state whose big exports to China include soybeans and corn. Now 70, he was serving his first term as governor in 1985 when Xi first visited the state. Since then, Xi has made one return visit, in 2012, and has also invited Branstad to China twice.
That relationship with Xi should help him navigate a U.S.-China trade relationship that is complex but also exceptionally important, said James Zimmerman, chairman of the Beijing-based American Chamber of Commerce in China.
“That the incoming ambassador is already familiar with many of the issues in this relationship is a positive sign, and we look forward to working with him,” Zimmerman said.
Branstad’s relationship with Xi could prove particularly useful due to the importance of personal relationships for doing business in China, said Rene Vanguestaine, CEO of Christensen Investor Relations, a U.S.-based financial advisory company.
“I am hopeful that he will be an effective bridge between the new administration and the Chinese government to help both sides understand the respective concerns and help design a compromise that will satisfy both parties for their own good and the good of the global economy,” he said.
Sentiment was even more upbeat from businessmen heralding from Branstad’s home state of Iowa. Colm Rafferty, the China chairman of Iowa-based equipment maker Vermeer Corp., said he was “very positive” about the governor’s selection.
“We have experienced how Governor Branstad has brought people together to solve problems and pursue opportunities,” Rafferty said. “Based on the many years that Governor Branstad has spent promoting a strong and constructive relationship with China as one of the United States’ largest trading partners, we strongly believe that he will represent us effectively as the next United States ambassador to China.”
Iowa native Gary Dvorchak said Branstad’s friendly, collaborative “Iowa style” could help to balance a tougher stance that the Trump administration seems to be taking. Dvorchak also has an unusual bond with China, since Xi stayed at his family’s home in the town of Muscatine during the 1985 visit. But Dvorchak also cautioned that Branstad will probably have to adopt a tougher posture in his new role.
“The business community does need to be careful not to get too enamored about Governor Branstad’s close relationships,” said Dvorchak, Asia director at investor relations advisor BlueShirt Group. “As an official of the federal government, he will not operate with the same discretion he had as governor. So while the relationship with China will remain warm, it will definitely be different, more formal, and absolutely official.”