An Innovation for Obama: “Forward Deploy” Barshefsky to Beijing

In his recent State of the Union speech and Monday remarks to the US Chamber of Commerce, President Obama called for government and business to work hand-in-hand to fulfill the “mutual responsibilities we have to secure the future that we all share.” While urging Americans to “out-innovate, out-educate, and out-build the rest of the world,” he promised to “run the government a little bit more like you run your business.”

In the SOTU and Chamber speeches, Obama mentioned “job”or “jobs” 41 times, the “future” 21 times, “innovation” or “innovate” 19 times, “educate” or “education” 19 times and “compete” or “competition” 16 times.

“China” came up 8 times. Japan and Europe each got one passing mention.

It doesn’t take a mathematician to determine what this adds up to: Dealing with the rapid rise of China while reversing the US decline and creating domestic jobs has reached top of mind for American politicians, business people and the general public.

Link to the SOTU address: http://bit.ly/f2YDT2

Link to the Chamber remarks: http://tinyurl.com/4o4aeoo

Last month, shades of this discussion invaded American living rooms with Yale law professor Amy Chua’s WSJ essay “Why Chinese Mothers are Superior” and book “Battle Hymn of the Tiger Mother.” With her “spare the rod, spoil the child” philosophy, Professor Chua stir-fried an East-vs-West debate on how best to raise children to become successful adults. Underlying this Caning-vs-Caring dialectic are alarming international surveys showing American student test scores slipping quickly to the mediocre middle while Chinese students are rocketing to the top.

(If you have been living in a cave and missed this nasty-vs-nurture parenting spat, you can find the WSJ article and the nearly 8,000 comments it has inspired here: http://on.wsj.com/fqvInW

For American business, the discussion has moved far beyond giddiness over  China growth. It has morphed into real worries about their China operations and ambitions threatening the global survival of their companies. In the wake of the financial crisis, China has tightly embraced state-led capitalism and “national champion” state-owned-enterprises that are backed by a groaning buffet of government monopolies, subsidies and loans. These SOE behemoths are under Party orders to “zou chu qu,” go beyond China’s borders and become global leaders through “assimilating and absorbing” foreign technologies for “re-innovation” into Chinese technology. With  a strong-armed arsenal of industrial policies packaged under the banner of “Indigenous Innovation,” the price of China’s pay-to-play domestic market has significantly increased. Today’s door pass all too often requires multinationals to turn over advanced technology for a minority share in a joint-venture with a national-champion SOE that is mandated by the Party to compete against their foreign friends outside of China as soon as they can.

For American politicians, survival is now all about jobs, jobs, jobs. It has been gratifying to hear Obama focus on “innovation,” “education,” the “future,” and “competition.” He is singing the right song. Now he has to get America to play along and compete with China — not defensively quibble about currency and launch scattershot trade remedies.

This brings me to the real topic: appointing a new US ambassador to China. With Jon Huntsman slated to leave soon and join the 2012 Republican presidential nomination fray, America must find a heavyweight to replace him. The talk in Washington surrounds updates to a list of those considered in 2008. The politicians include former senators Chuck Hagel, Tom Daschle and Chris Dodd. The China-hands include outgoing NSC Asia boss Jeff Bader, and government and academia veterans and current denizens of Brookings, Richard Bush and Ken Lieberthal. Some suggest enlisting a business leader such as former Goldman President John Thornton who has retooled himself as a China expert. All capable people. Not one of them the right person for the job at this time.

Obama told the US Chamber that he wants to “run the government a little bit more like you run your business.” Smart businesses look for expertise, experience, management skills and vision when picking key executives. It is also good to be so formidable that you keep competitors awake at night. The latest multinational trend is “forward deployment,” moving leaders out of headquarters to deploy them in the lands of opportunity. Companies such as GE, IBM, Honeywell, Applied Materials and dozens of others are relocating company vice-chairmen, global division leaders and chief technology and strategy officers to Shanghai, Beijing, Hong Kong and Singapore. The idea is to focus on the future and escape headquarters headaches and yesterday’s mindset.

Huntsman’s departure gives Obama the opportunity for “forward deployment” of a trusted and formidable ambassador who has real China chops and a White House mandate to shape and lead China policy. State, Commerce, USTR, the Pentagon, NSA and many other agencies are replete with staff-level China experts. Secretaries Gates, Clinton, Geithner and Locke all have their fingers in slices of the China policy pie. But nobody owns or manages the overall China relationship and policy planning — and there is no overarching China strategy. Instead, the Obama administration reacts to the latest bombast from Beijing — or bluster from Capitol Hill and the Cable TV Crazies.

The Obama administration lacks a senior China statesperson who can wrestle eye-to-eye with Beijing while commanding the respect and expertise to shape smart policy at home. There is no natural perch for such a person in DC. A White House China czar would sit in a windowless office and fight off meaningless initiatives. But the US ambassador to China commands a staff of hundreds who reach into agencies throughout the US government. Forward deployment may be the answer.

The one person who is perfect for this role is former US Trade Representative Charlene Barshefsky. She can keep Chinese policymakers awake at night because she knows too much to be outsmarted and is too savvy to be outmaneuvered. Barshefsky wrestled China into WTO during the Clinton administration, and she knows very clearly where and how China is cleverly skirting compliance and distorting global markets today. She taught the concept of “win-win” to Chinese officials, and has watched with alarm as the current generation of Party bureaucrats have redefined it to mean “China wins twice”. She also knows where the bodies are buried in DC and which policy initiatives should be interred or given breathing room.

Barshefsky knows both Hillary and Geithner well. When she visited Beijing last October, former Premier Zhu Rongji, who never meets with foreign visitors, got together with Barshefsky to exchange views and swap memories. She is not a Panda hugger or a China basher. She is somebody that America would be privileged to have on the front lines of a bilateral relationship that everybody seems to agree is the most important on the planet for decades to come.

I have known Charlene for some 15 years. I have not consulted her about this column nor talked to her about this job. It will be up to Obama to convince her to take the post. And that may be possible. As Huntsman said after accepting the job, “I now know why they built the Oval Office. It’s an impossible room in which to say, ‘No.'”

You can learn more about Barshefsky’s background and qualifications at the links below:

http://bit.ly/i9KJNm

http://bit.ly/eu1KA1

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About James McGregor
James McGregor is an American author, journalist and businessman who has lived in China for more than 25 years. Currently, he is chairman of APCO Worldwide, Greater China. A professional speaker and commentator who specializes in China’s business, politics and society, he regularly appears in the media to discuss China-related topics. McGregor is the author of the books "No Ancient Wisdom, No Followers: The Challenges of Chinese Authoritarian Capitalism" (2012) and "One Billion Customers: Lessons from the Front Lines of Doing Business in China" (2005). He also wrote the 2010 report "China’s Drive for ‘Indigenous Innovation’ – A Web of Industrial Policies." From 1987 to 1990 McGregor served as The Wall Street Journal’s bureau chief in Taiwan, and from 1990 to 1994 as the paper’s bureau chief in Mainland China. From 1994 to 2000, he was chief executive of Dow Jones & Company in China. After leaving Dow Jones, he was China managing partner for GIV Venture Partners, a $140 million venture capital fund specializing in the Chinese Internet and technology outsourcing. In 1996, McGregor was elected as chairman of the American Chamber of Commerce in China. He also served for a decade as a governor of that organization. He is a member of the Atlantic Council, Council on Foreign Relations, National Committee on US-China Relations and International Council of the Asia Society. He serves on a variety of China-related advisory boards.

3 Responses to An Innovation for Obama: “Forward Deploy” Barshefsky to Beijing

  1. Tom McNamara says:

    Jim,

    i think you should apply for the job! Seriously, Obama needs understanding inside China’s complicated system of both government and business….I can’t think of a better canidate!

    My best to you and the Family,

    Mac ( the smaller one)

  2. Jack Murphy says:

    Mr. McGregor,

    I concur. Charlene Barshefsky is a terriffic candidate who also is very skilled in rhetoric. She is one of the most articulate, substantive, and informative speakers that I have ever heard.

    Follow me on Twitter!!

  3. Your post features confirmed beneficial to us.
    It’s really helpful and you’re simply obviously really educated in this region. You have opened my own sight to various opinion of this particular subject together with intriquing, notable and solid written content.

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