A Tale of Two Partnerships

China spanks conciliatory Europe and concedes to anxious America

Once the kowtowing starts, it's hard to stop.
Once the kowtowing starts, it’s hard to stop.

President Xi Jinping had planned on this week’s less-than-formal meet & greet with President Obama being a forward-looking discussion about a burgeoning “special relationship”. XJP’s stated itinerary was supposed to be about China getting more respect in Washington – while his unstated goal probably has more to do with appearing international and in-charge back in Zhongnanhai  (the Chinese Party’s version of Capital Hill – or more accurately – K Street ). The Chinese side wanted to keep unpleasant topics off the schedule, but as the sit-down approaches it looks like cyber-warfare and trade imbalances are going to take center stage.  The Chinese would rather avoid vulgar, potentially awkward topics in their first meet – but it looks like Obama was flanked by Defense Sec Hagel  and economic data .

Meanwhile, over in Europe China is acting like a sore winner.  Almost immediately after forcing the EU to back down from punitive anti-dumping tariffs on Chinese solar panel importsChina announced it is investigating the EU wine trade for suspicious anti-competitive practices.  France – the most vulnerable member of the Eurozone to restrictions on the wine industry – was not enthusiastic about the EU’s mild response to Chinese solar panel dumping. It’s easy to write off Beijing’s move as face-saving theatrics – but in international trade, posturing and politicking can often take on a life of their own.

International managers involved in China should take note of the important leadership lesson. The Chinese see the US as a major military power on the mend, and the EU as a fragmenting band of squabbling merchants. While Chinese partners and colleagues like to talk about face and harmony, at the end of the day we are all valued based on our utility and power. When dealing with Chinese associates you must always maintain your dignity and authority – even if it means short term friction. Once you start kowtowing, it’s very difficult to stop.

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