In early November, top executives from major U.S. and international companies – from Walt Disney International to Johnson & Johnson and many others – as well as leading government officials and trade experts, gathered at the Long Beach Convention & Entertainment Center for a two-day conference on the topic of thriving in global markets. Panel discussions and roundtables ranged from industry-specific topics such as “innovation in supply chain and logistics” to dialogs about specific countries, including a keynote panel on China featuring the likes of the U.S. deputy assistant secretary of commerce for China and Mongolia.

GetGlobal Panel
Panelists discuss doing business with China at the GetGlobal Conference. Pictured, from left, are: Tom Doctoroff, global senior advisor for Prophet; Debra Lodge, managing director, head of international solutions and China solutions for HSBC Bank; Alan Turley, the U.S. deputy assistant secretary of commerce for China and Mongolia; Craig Allen, president of the U.S.-China Business Council; and panel moderator Bill Edwards of Edwards Global Services. (Image courtesy of GetGlobal)

The event, GetGlobal 2019, was held in Long Beach for the first time on November 6 and 7 thanks in part to wooing by the city’s economic development department. According to John Keisler, the department’s director, it was one of city’s economic development commissioners, Leah Goold-Haws, who suggested bringing the event to the city to help achieve goals related to promoting foreign direct investment. Ultimately, the city, the Port of Long Beach and Keisler’s department all signed on as sponsors for the event.

GetGlobal attracted 1,149 participants from 600 companies representing a combined $590 billion in revenue and 1.9 million employees, Keisler said.

Bringing these individuals to Long Beach – as well as the luminaries who spoke at the event – benefited the city in a number of ways, per Keisler’s estimation. “For us, there are three main reasons that you convene. Number one, it’s to market and promote the city. So by bringing people into the city to experience firsthand the economic development that’s happening here and to experience the energy and the leadership around international trade,” he said. The convention also helped the city network with major players in the business of importing and exporting, and educated local officials about current events around global trade.

One of the event’s “super sessions,” a keynote event closing out the first day of the convention, was a panel on China featuring Alan Turley, the U.S. deputy assistant secretary of commerce for China and Mongolia; Craig Allen, president of the U.S.-China Business Council and former U.S. ambassador to Brunei; Debra Lodge, managing director, head of international solutions and head of China solutions for HSBC Bank; Tom Doctoroff, global senior advisor for Prophet; and moderator Bill Edwards of Edwards Global Services.

The panel discussion focused on an array of topics related to doing business in China – socioeconomic and cultural trends, demographics, the foreign exchange rate, trade policy and more.

Doctoroff largely spoke to cultural and socioeconomic differences between Chinese and American consumers. “By not respecting the cultural imperatives of China, marketers make huge mistakes. The way that the Chinese navigate, for example, their digital ecosystem is fundamentally different,” he said. “The unifying tension in Chinese society, which is timeless, is the tension between, on the one hand, projection of status, which takes place in the public sphere, and on the other hand the feeling of self-protection that is required, which is usually much more in the private sphere.”

Lodge spoke mostly about financial markets and investment opportunities going forward. “There was kind of a gasp in the market when China let the rate go to 7,” Lodge said of the foreign exchange rate – the number of Chinese yuan that equals one American dollar. She noted that the government has “a certain control” over its currency.

Since early 2008, the exchange rate has remained below 7, fluctuating between 6 to 6.9, per the Federal Reserve. When the exchange rate is lower, it is cheaper for Chinese businesses to purchase American goods. When it is higher, it becomes more expensive.

“I am repeating what our economist at HSBC is saying, that this was not anything to do with tariffs,” Lodge said of the exchange rate hike. “This was not retaliation. If you actually looked at geopolitical and economics and everything that goes into the exchange rates, it was at a fair rate.”

Allen discussed the economic impacts of the trade dispute between China and the U.S. “At the end of the day, the trade dispute should be relatively easily resolvable because it’s not well founded by economic principles,” he said. “However, the technology dispute is more difficult to resolve. The issues are complex and are going to be with us for some time. The export control and the related restrictions on Chinese investment into the United States are ratcheting up, and they have affected many high technology companies, and indeed, I would argue, almost all high technology companies.”

Tied up in the debate over trade with China is the issue of alleged intellectual property theft by Chinese entities related to American technology, but Allen emphasized that the topic of the trade imbalance should be addressed separately.

Turley discussed the long-term trends in China that American businesses should pay heed to. “First and foremost is the aging of the Chinese population,” he said, noting that China’s longtime one-child policy led to an imbalanced age dynamic in families, with four grandparents, two parents and one child per household. Despite China’s move in 2013 to allow two children in households where at least one parent was an only child, birthrates haven’t increased significantly.

“The second trend that I would cite . . . is again the slowdown in growth. And with the slowdown in growth, if you will, the maturation of many Chinese companies,” Turley said. “In the past 20 years, Chinese companies have gone in many cases from small and not very competitive to being really nimble, sophisticated, well-managed and well-capitalized. And you have really exciting companies that have grown up in this space in China. They are going to continue to stretch their wings and have new products. And it’s going to be harder, I think, for new companies to compete in the Chinese ecosystem.”

As for what to watch out for in the short-term, Turley summarized: “As tensions mount, the opportunities for a misstep on either side that would really cascade in a bad way are one of the things that I worry about.”

Keisler said he hopes GetGlobal continues to come back to Long Beach. One of his goals is for the organizers to run the event in Long Beach for at least the next 10 years, making it the premiere conference on the West Coast for trade.