This is the third article in a 5-part series on how the West can change its game to win in the new global economy. It is based on the 5Ps of Global Marketing Framework, first introduced in The China Factor: Leveraging Emerging Business Strategies to Compete, Grow and Win in the New Global Economy.
Today I will address the ‘Partnerships ‘P’ and how important it is in the delicate balance of global trade. The recent stir caused by President-elect Donald Trump’s call with Taiwan and the impact on China relations is a perfect example.
The larger part of my message has been that we, the West, need to learn how to do business differently in order to better succeed in this new global economy. That means learning how our newer challengers from the East (namely China) operate, and in turn, adapting our approach accordingly to ensure future success and strength. It is no longer business as usual – the West, and the US in particular, can no longer dictate how things will go, because the power dynamic has shifted and there is too much at stake. The US and Chinese economies are too intertwined – the interdependencies are too great at this point.
And China gets this. We need to take our cue from them in terms of how they maneuvered Trump’s actions this week with respect to his taking a call from Taiwan, in addition to his bold comments about imposing high import taxes, and US dollar devaluation caused by China.
While the Chinese government was likely, and understandably, aghast at Trump’s moves, they did not come right out and say so. They recognized the importance of protecting and fostering a productive future partnership with the US, and the potential negative implications on China and its people took precedence over emotion. “..the Chinese government does not want to hurt China by hurting Trump”. The Chinese government ‘officially’ stayed quiet (although they purportedly did leak out opinions indirectly through the Chinese media channels). They downplayed the situation and are taking the ‘wait and see’ party-line until he is officially the President of the USA.
In any strong relationship and partnership, there is a dance, a back and forth, a give and take, and a deep understanding of each other’s positions and interests is required. It takes an appreciation of what is truly at stake for your own party as well as the other, in order to gain a mutually successful outcome.
So let’s see if we can put this to practice given the current situation. Trump’s position is more than clear: keep China at bay because he doesn’t like its negative impact on the US economy. But if we look a bit deeper, we understand that his interests lie in protecting the American people – bringing jobs back to working class, growth for the American economy. How does he achieve that?
2 Ways Trump and China Together Will Make America Great Again
- Co-opetition: The US-China divorce would be too costly – not only nationally but also on a global scale – and no one wins in the end. So, instead of shutting out China, what if Mr. Trump evolved or leveraged the China partnership for the betterment of his people? What if he looked at it differently, like through the lens of ‘co-opetition’ to see how he can make America great again? Co-opetition defined is the collaboration between business competitors, in the hope of mutually beneficial results. For example, instead of fighting for the same pool of jobs in manufacturing, what about creating and agreeing on new centers of excellence for each nation, developing a new level of expertise and skill sets of its people? Naturally, this is easier said than done; not only is diplomacy an essential element in the process, but a genuine intention for a positive outcome.
- Playing in Each Other’s Sandboxes: Market access is an essential element in America’s economic growth equation. China’s market potential is much too great to shut out and eliminate. For example, if Boeing was no longer permitted to sell into China, it would cost tens of thousands of American jobs – which is not congruent with Trump’s interests. Yet, a fair and equitable agreement is tough to achieve, particularly when values differ, trust is questioned, and benefits are unbalanced. Constant evaluation and a third-party governing body are helpful in getting closer to a mutually beneficial situation.
Fair global trade and amicable partnerships are not easy endeavors, given the different goals and challenges of each nation and the competitive spirit to succeed ‘first’ or more. However, ignoring the possibilities outlined above and excessive protectionism are only short-term approaches. We need to take it one-step further; we need learn from each other while protecting our interests and do things differently in order to achieve future growth and economic success.
For more on how your company can change its game to win in the new global economy, buy your copy of The China Factor.
Book Karam Consulting for speaking engagements or workshops on how to create your next gen global expansion strategy and how to equip your company with proven competitive tactics. http://www.KaramConsulting.com