NEW COVER STORY: How America's biggest companies made China great again
Now he was losing faith. Growth in the company's key businesses, including power and medical imaging, had begun to slow from levels GE expected. Government regulators, meanwhile, seemed increasingly hostile, holding up permits and increasing inspections of company facilities for what seemed like no reason. In Rome, Immelt let his fellow CEOS know what he was really thinking."I really worry about China," he told the group, according to several executives present.
For American CEOS, the potential Chinese bonanza meant that U.S. policy toward Beijing had to revolve around nurturing— and expanding—the economic relationship.
Unacknowledged at the time by its corporate advocates was the huge impact on corporate supply chains that the seemingly obscure legislative change would eventually cause. As the economists Justin Pierce and Peter Schott argued in an influential 2016 study entitled"The'China Shock" - which looked at how swiftly U.S. manufacturing employment declined as China's rise accelerated -"without PNTR there was always a danger that China's favorable access to the U.S.
Over the last 30 years, prominent American companies have become part of the fabric of Chinese life. Starbucks is as ubiquitous in Beijing or Shanghai as it is in New York. General Motors sells more cars in China than anywhere else in the world. KFC and Papa John's are in all major cities. And Apple has opened 42 of its iconic retail stores.
Then something else happened: the 2008 global financial crisis, which tanked the U.S. and the rest of the developed world, but not China. The political leadership in Beijing looked around and said, in effect, 'wait a minute: we were supposed to play by these guys' rules and look what happened to them.' In the future, economically speaking, China would increasingly play by its own rules.
Well before Donald Trump was elected, the carping about Beijinjg's policies from the Fortune 500 crowd intensified. In the annual reports issued by the American Chambers in both Beijing and Shanghai, the number of respondents who felt the regulatory environment in China was worsening steadily increased. A senior executive at Honeywell in 2015 told me flatly that his company was fed up with Beijing's demands for technology transfer. Friends at CISCO and MIcrosoft said the same.
In December of 2016, during the transition, a small group of senior executives from the U.S. semiconductor industry made the pilgrimage to Trump Tower to meet with incoming administration officials, including the man who would be the new USTR, Robert Lighthizer.
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