Joe Borich, President of the Washington State China Relations Council
“China has been my passion for most of my adult life. It’s part personal, part professional.” ~Joe Borich
Joe Borich is the retired US Consul General to Shanghai. He served in this capacity from October 1994 through June 1997; he previously helped open this Consulate General in 1980.
Today, Mr. Borich is President of the Washington State China Relations Council (WSCRC). In the Bellevue-Seattle area and throughout Washington, Mr. Borich has been a leading voice in promoting trade among China, Hong Kong, and the United States.
Washington State China Relations Council
1301 5th Avenue, Suite 2500
Seattle, WA 98101-2611
Tel: (206) 441-4419
Q. How did you get involved with the Washington State China Relations Council?
A. The Council started in 1979 – the same year the U.S. and China established full diplomatic relations. I am the fourth president of the Council, and have been doing this job 15 years.
Before becoming president of the WSCRC, I served in the U.S. Foreign Service for 25 years. I spent approximately 12 years in Greater China, including Taiwan. Much of the rest of the time I worked for the State Department, on issues related to China.
In 1997, I received a call from the then-president of the WSCRC (who was moving to Hong Kong to become president of the Hong Kong General Chamber of Commerce) who asked me if I would be interested in the job. I thought it would be a perfect way to bundle my experiences and roll them over into the private sector.
Q. What are the key functions of the WSCRC?
A. The goal of the Washington State China Relations Council (WSCRC) is to promote economic, academic, and cultural ties between the state and China. Part of that role is being sensitive to what works and doesn’t work in China so when our members make their business plans they have broader knowledge of business in China.
We offer support for our university and corporate member companies who wish to invest and expand… we talk with them about what they want to do in China, how to get started, and how to establish themselves in China.
We’re also starting to see a lot of Chinese investment heading our way, and we need to be prepared for that because there’s huge potential.
We are asking our member companies, “How can your company benefit from Chinese investment? How can your company attract Chinese investment to the Seattle/Bellevue area – and to your company in particular?”
Q. So, how CAN Washington State companies attract Chinese investment?
A. The short answer in most cases is access to Chinese capital and access to the China market. But, there are many possible benefits to be applied on a case-by-case basis. Like all potential business transactions though, attracting Chinese investment is best preceded by a careful evaluation of your business plan and goals, a realistic assessment of what you hope to gain from Chinese investment, and thorough due diligence on prospective Chinese partner(s) before committing.
Q. Since your first visit to China in 1969, China has undergone an enormous transformation. Please share some of your observations.
A. My first exposure to “China” occurred in 1969 when I stopped in Hong Kong for a few days on my way home from a Peace Corps assignment in Taiwan. I first worked in Taiwan in 1973, and then was sent to Shanghai in 1980 to help open the Consulate General. The difference between China in the 1970s and the one that exists today is mind-boggling.
For close to 30 years, China has been a tremendous growth market; they have amassed north of $3 trillion in foreign exchange holdings. For companies considering engaging China in business, there’s a lot of opportunity.
China has also experienced an incredible growth of its infrastructure. They’ve expanded their network of expressways to the point where it’s almost as large as the one in the U.S. They have the largest network of high-speed trains in the world. They’ve built or rebuilt dozens of airports. The expansion of their electric grid is unparalleled. China’s auto market is the largest in the world. They have over 500 million internet users, and almost that many cell phone users. High growth is one thing China has done very, very well.
Q. You recently returned from a trip to China with the Seattle Clean Energy delegation. What did you learn during that visit?
A. The trip to Beijing and Shanghai was a collaboration of the Trade Development Alliance of Greater Seattle, the Washington Clean Technology Alliance, a group of clean energy angel investors, and the WSCRC. The purpose was to give practitioners and investors a look at the China market for clean energy. We met with companies engaged in clean energy and learned what they are doing with wind, solar, and battery power.
Finding more sources for cleaner energy is a huge concern in China, because their economy has more than quintupled in about 30 years. Much of that growth is being driven by the expansion of heavy industry, which requires a lot of electricity. To meet the demand for energy, they are adding 1 gigawatt of energy capacity per week – roughly the amount of energy required to power a city the size of Seattle. Much of that added energy capacity is in the form of coal-fired power plants, and China is now the largest generator of greenhouse gasses in the world.
The Chinese realize they have an enormous problem and are taking steps to do something about it – they are currently investing more in alternate energy and clean energy than the U.S. is. By the year 2015, 15 percent of the total energy used in China will come from non-fossil fuel sources such as wind, solar biomass, and geothermal.
China is also ahead of the U.S. in terms of smart grid technology, smart city technology, and ultra high voltage electrical transmission. In addition, they have made breakthroughs in technologies for batteries that power electric vehicles and store energy. Because of the problems China has with energy consumption, they feel compelled to do the research and invest in clean energy solutions.
Q. What are some other critical issues China must resolve in order to grow its economy?
A. China’s economic model has been export-driven. This needs to be transformed to a domestic consumption model. In China, people are generally reluctant to spend money. They prefer to save it for education, retirement, and medical emergencies. That’s because there’s no universal social security system in place; people save 40 percent of their income in low-interest accounts. I believe the government in China has to establish a floor so the average consumer feels more confidence in spending money.
China’s one-child policy, which was introduced in 1978, has slowed China’s population growth as intended, but it has also dropped the birth rate below the replacement rate. By 2050, nearly 40 percent of China’s population will be over age 60. And the “productive” ages, between 20 and 55, will be among the smallest categories in terms of numbers of people.
China either needs to reverse this policy or moderate it somehow. If couples have more children, the growth curve may be sufficient that China will get rich before people get old.
The aging of China’s population is the most difficult challenge they face. But China is looking for answers and employing them when they find them. I’m confident that they will find good answers so that they can continue to move forward.
Q. The Washington State “brand” is becoming extensively and favorably known in China, isn’t it?
A. Yes; Washington is becoming increasingly associated in China with high tech, whether aerospace, IT and communications, biotech and medical supplies, and, increasingly, environmental and clean energy technologies. I believe the technology companies in our state are looking at enormous potential for converting our “brand” recognition into concrete business opportunities.
Q. You often tell people that China is your passion.
A. Yes, China has been my passion for most of my adult life. It’s part personal, part professional. My wife is Chinese, my in-laws all live in Taiwan, and our daughter, whom we adopted, was born in China. We spend time every summer visiting my wife’s relatives.
I have a driving hope that China will succeed, and that the U.S. will play a role in helping them succeed. I don’t see a threat of a successful China, but I do see a threat from a failed China. I worry that a sudden collapse of China would create an economic meltdown that would have severe and long-lasting consequences throughout the world.
But I don’t think that’s going to happen. Call me an incurable optimist, but I think my optimism in this case is well-founded.