Report — From the November 2015 issue
American business meets its new master
It’s May Day, and a rambunctious crowd of well-dressed people, many carrying blue and yellow parasols, has pushed into a Ford dealership just north of Chongqing, China. Mist from a car wash catches the sun, and I watch a man in a striped shirt poke at the gleaming engine of a midsize Mondeo while his wife sits in the driver’s seat and turns the wheel. Overhead, a giant banner of a Mustang painted Communist Party red ripples in the spring breeze.
At the showroom door, I am greeted by three saleswomen who smile and stare, clearly shocked to see a Westerner. Finally, a manager leads me over to a young man, the resident expert in English. Other than the Ford logo and the corporate mantra of the moment, go further, the front of his card is entirely in Mandarin. He carefully pronounces his name for me: Yi Xuanbo. Then he leads me past a potted rubber plant to a small aluminum table and hands me a paper cup of tea.
Yi places a luxurious brochure on the table and flips to a picture of a silver Mondeo hovering over the Manhattan skyline. He then turns to a page extolling the interior and the sound system — in English, the accompanying text describes the car as “a sensory palace.” Yi tells me how much a basic Mondeo costs before taxes: 179,800 yuan, or about $28,000. I ask him whether he owns a Ford and he shakes his head, but with a smile. “I think maybe next year, I can buy one, too.”
For Ford executives, this scene might offer a welcome testimonial to their decision, in 2012, to dramatically increase investment in China. And Chongqing, a municipality of almost 30 million people in the center of the country, is key to their vision. The cars on display at the dealership I visited are manufactured only a few miles away, at Ford’s main Chinese factory complex. If you take the subway eleven stops from the dealership to the Changfulu station, you can stand on the elevated platform and stare out over a shimmering desert of industrial roofing, which covers several million square feet of assembly lines.
Ford has pledged to do for China in the coming century what it did for America in the previous one, which is to produce vast quantities of high-quality cars that the masses can afford — even the company’s own salesmen. The bet is paying off. In 2014, only two years after committing big money, Ford sold more than a million cars in China, almost as many as it sold in the United States.
For any American who has followed domestic debates over international trade, Ford’s success in China — as well as that of General Motors and Chrysler — must be especially gratifying. Ever since the Japanese mounted the first major postwar challenge to American industrial preeminence, in the 1980s, the ability to sell U.S.-branded cars abroad has served as the prime test of the fairness of any given trading relationship. Japan itself has failed this test for the past three decades, keeping its automotive market mostly closed to foreign brands. In China, however, Fords, Chevrolets, Cadillacs, and Jeeps have been roaring off dealers’ lots — largely at the expense of Japanese automakers.
This success might also appear to validate something more important than corporate canniness. Two decades ago, in the wake of the Soviet Union’s collapse, a group of libertarian intellectuals in America put forth a radical vision: Lift all controls on the industrial and financial companies of the West, set them free to manage the world’s trade without any strangulating regulations, and they would entice the People’s Republic of China to join the international system. This would produce, in the words of Bill Clinton, who ardently embraced such thinking, a “more open and free China.” It would also lead to wider prosperity for all.
But outside the Ford showroom, as I watch two children run laughing among the sparkling new vehicles, I wonder whether this great experiment in what we have been taught to call globalization really did work as promised. As our biggest manufacturers and traders and investors succeed in China, they also come to depend on China for future profits — which brings them increasingly under the sway of a Chinese state that holds the power to cut those profits off. What if the master capitalists and corporate bosses who have so cowed us here at home are themselves being cowed in Beijing? What if the extreme economic interdependence between the United States and China is not actually carrying our values into a backward and benighted realm, but accomplishing precisely the opposite — granting the Chinese Politburo ever-increasing leverage over America’s economic and political life? MORE