China Daily Global Edition (USA)
Blackstone CEO: Reciprocity matters on trade issues
China and the US are unlikely to get into a trade war, but reciprocity in access to markets is something that US companies will continue to seek in China, said Stephen Schwarzman, chairman and CEO of the Blackstone Group.
“There are too much common interests [to start a trade war], but there’s also a large gap —which is I guess somewhere around $350 billion [and] on its way to $400 billion — and that gap in trade is by all reasonable standards too big,” Schwarzman said on April 13 at the Metropolitan Club in a dialogue with Guo Guangchang, chairman of Fosun International.
“I think both countries are sensitive and knowledgeable about that, and there’s a need to normalize that type of relationship. I think that we will find a way to do that that’s cooperative and works well, because the long-term interests of China and the United States are inextricably linked, and so the two countries will find a way because it’s in our long-term interest,” Schwarzman said.
Guo said he believes that the Chinese government will work hard to address the deficit, possibly increasing imports of US goods in order to reduce the deficit between China and the US. “Openness [between the countries] will be greater, including the opening of the US service industry,” he said.
He added that China and the US work together on multiple fronts, particularly in areas of research and development.
“China has cheaper research and development personnel, and the market is much bigger there, so [China and the US] could better link up these resources,” he said. “This is not only an opportunity for China, but also for the United States.
He also noted that China has an interest in spending and investing in the US high-tech sector but finds itself unable to.
Schwarzman, who is the chairman of US President Donald Trump’s Strategic and Policy Forum, said that at the moment, US companies don’t have easy access to the Chinese market, despite Chinese companies having access to the US market “in almost every way” except in the high-tech industry.
“Beyond that, there’s almost no restraint in terms of doing business in the United States. So there’s just a desire for reciprocity, or equality. On that basis, two countries should compete with the best products, the best services, and that will in all probability evolve to other areas,” he said.
He predicted that it will take some time before the issues are “thoughtfully addressed”, but said that if there is fairness in one market, there will be fairness in the other.
On the subject of investment risks, Guo said that Chinese companies’ success over the last three decades can be attributed to seeing “upward potential rather than paying attention to downward risk” and that “the real successful investors are those that are able to manage risks better”.
Fosun Property Holdings recently formed a partnership with Union Square Hospitality to bring a Danny Meyer-helmed venue to the 60th floor of 28 Liberty Place, formerly known as One Chase Manhattan Plaza.
Fosun made headlines in 2013 when it acquired JPMorgan Chase’s One Chase Manhattan Plaza for $725 million.
Schwarzman founded the Schwarzman Scholars last year, an international scholarship program similar to the Rhodes scholarships given at Oxford University.
“We had to do things to lower the tension levels, which I thought would arise. I had no idea those things would arise so quickly,” he said, “and what we wanted to do is develop a group of really exceptional students around the world to learn about China, experience it, meet famous people, meet regular people, and by doing that, be able to return to their own countries, be able to explain China to them.”