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Home Articles & Speeches Booming China to need auto parts - The Plain Dealer
Booming China to need auto parts - The Plain Dealer
Peter Krouse
Plain Dealer Reporter

Pity the poor scooter maker.

Throughout developing Asia, the motor scooter has been the middle step in the progression from bicycles to automobiles. But in China, where growth is at hyper-speed, consumers are going straight from bikes to cars, said China specialist Robert Lees, who was scheduled to address the Cleveland Council on World Affairs Tuesday evening.

In November alone, 40,000 new cars were sold in metropolitan Beijing, he said, dispelling the notion some may have that China is still a country of bicycles and rickshaws.

Meanwhile, the country is busy extending interstatelike highways from city to city.

"They clearly are going to have a mobile society," he said.

That growing demand should have auto parts suppliers in the United States thinking about expanding into China where, by the way, Buick is a significant brand, Lees said.

He doesn't mean moving a plant to China and shipping back to the United States, but tapping into the market there.

"If you're an auto parts supplier in the United States now supplying GM, you best be taking a look at having a facility in China to be able to supply the industry there because it's clearly going to be a major factor," he said.

That's just one bit of advice from Lees, who has been taking business trips to China since 1983. He most recently worked for international consulting firm BearingPoint Inc. He also is a former secretary general and president of the Pacific Basin Economic Council.

Lees, who now lives in Hawaii, grew up along the Ohio River near Cincinnati and knows the pain Ohio and other manufacturing states have suffered in lost jobs to low-cost countries like China and elsewhere. He argues that China must stop manipulating its exchange rate - a strategy that has made Chinese goods much cheaper when purchased in U.S. dollars.

He also believes the United States should put more pressure on China, as it did with Japan, to invest in the United States.

"In my humble opinion we should not be humble," he said.

By and large Lees believes U.S. industry must become a lot more aggressive about tapping into China's market.

There are still some problems getting in, "but, in the main, the Chinese market is incredibly more open today than it has been, ever," Lees said. "So it's time for us to go and be aggressive in that market."

Another misconception Americans may have about today's China is the level of freedom its people have, he said.

"There's no question that it's not a Jeffersonian democracy, and in my opinion it never will be, because it's a whole different culture," Lees said. "But I do think Americans don't understand the degree of freedom that does exist."

There are "nascent" movements toward democracy, he said, including elections at the school board, village and district level.

And on occasion the Communist Party candidate loses.

That doesn't mean the Communist Party is planning to step aside, nor does Lees think the Chinese people want it to, "because what they're seeing is an incredibly positive increase in their standard of living," he said. "And that's what it's all about."