At Harris Bricken, we keep close tabs on what is happening around the world, and we know that our friends and clients do, as well. We are happy to provide this podcast series: Global Law and Business, hosted by international attorneys Fred Rocafort and Jonathan Bench, where we look at the world by talking with business leaders, innovators, service providers, manufacturers, and government leaders around the world.
In Episode #76, we are joined by Andrew Hupert, professor at Hult International Business School.
- The China where anything was possible, but nothing was easy
- Why there is no going back to “normal” when it comes to China
- How manufacturing destinations like Vietnam, Thailand and Mexico compare (or don’t) to China
- China’s increasing influence in Latin America
- How neglect of domestic infrastructure complicates U.S. foreign policy
- Listening, and watching recommendations from:
We’ll see you next week for another exciting and informative episode when we sit down with Jayesh Kothari, associate partner at DSK Legal’s Mumbai office to discuss India.
This podcast audio has been transcribed by an automatic transcriber.
Fred Rocafort 0:07
Global law and global business go hand in hand, but never seem to keep pace with each other. The importance on the global stage of developing and developed nations waxes and wanes, while consumption and interconnectedness steadily increase all the while laws and regulations change incessantly requiring businesses to stay nimble. But how do we make sense of it all? Welcome to Global Law and Business hosted by Harris Bricken International Business attorneys. I’m Fred Rocafort.
Jonathan Bench 0:37
And I’m Jonathan Bench. Every week, we take a targeted look at legal and economic developments in locales around the world as we try to decipher global trends in law and business with the help of international experts. We cover continents, countries, regimes, governance, finance, legal developments, and whatever is trending on Twitter. We cover the important, the seemingly unimportant, the relatively simple and the complex.
Fred Rocafort 1:02
We hope you enjoy today’s podcast. Please connect with us on social media to comment and suggest future topics and guests.
Jonathan Bench 1:22
Today we’re joined by Andrew Hupert, a lecturer, writer and consultant specializing in negotiating across cultures. The bulk of his professional career has centered on helping international professionals bridge the gap between Western and Asian business, but he has recently relocated to Mexico in order to expand his range of activities to Mexico and Latin America. Andrew, welcome to Harris Bricken Global Law and Business.
Andrew Hupert 1:44
Thanks very much. It’s great to be here.
Jonathan Bench 1:46
To kick us off, we’d love to hear more about your background. What got you started and interested in international matters? And how did you get to where you are now, which is Mexico?
Andrew Hupert 1:55
Most of my history centers around China and Asia. So I got my MBA from NYU in when was a long time ago about 1990 and 1989, to be precise, and I studied International Finance. And my first stop was was Japan, because in those days, we thought Japan was going to be the dominant player. I quickly realized Japan wouldn’t be wouldn’t be the star of this particular show. But this was around the time of Tiananmen. So I knew the future of Asia. I knew the future of Asia was going to be Chinese speaking, but it wasn’t a good time to go full mainland. So I went to Taiwan for a few years. And I studied Chinese and I worked for some local, some local banks, some local investment banks. That is where I began to learn about Greater China. Returning to the US worked for a big institutional brokerage. It was called wi car. It’s no longer around, but it’s very famous in its day, and I returned to the United States, I worked for white coat for a few years, and I eventually came to run the China desk, which in those days was was a B shares, h shares and the shares, eight shares and red chips. We don’t use those phrases anymore. But that was how I really got started in China. Through the 90s, I was burying clients, big, big investment banks, investment banker clients, we call them, we call them hedge funds at the time. I think they’re called that anymore. But I would bring them over to to China to check out factories. And this is what I call towncar. Tourism. We flew business class to Shanghai, we were met at the airport by a big black town car with a polite bilingual representative the bank took us to our our International Hotel. The next day, we were met by another polite young bilingual employee. And everything that we did in China was assistant everywhere. 1000 invisible little hands, making sure we never had any problems. And but in this way, we thought we understood all there was to understand about China. And, you know, in a sense we did we knew the kind of China we were seeing, but it certainly wasn’t real China. So fast forward a little bit. I stayed with that firm for a while really liked China really liked the emerging markets of Asia did not like finance that much. So after the.com bust, found myself with a lot of time on my hands, I decided to return to China full time And really make a go of it. So in 2002, I, I returned to Shanghai, and I, you know, I was I was going to school, but I had a lot of friends in China. So I took a job running a local firm for some people I knew, and this was meant no Chinese, this was not bilingual Chinese, this was not investment banker working for the multinational Chinese, this was local. And now, whereas before, there were 1000, invisible little hands helping me along. Now there were 1000 different hands, sort of blocking me and dropping things, and making the simplest communication really difficult, really impossible. And that is when I started to learn about real China when I was trying to manage, manage a local firm, and that’s where I developed the skill set that I would later bank on, have I learned to manage in China, I learned to manage locals in China. And that was the skill set that eventually, you know, I made my living on helping others helping Western firms, usually European firms, to manage teams and to negotiate in China. And in those days in 2002, and 2005, when I was doing my best work, we had a little expression in China, which was, anything is possible, but nothing is easy. And we don’t say that anymore. Because now not anything is possible. But those were, those were the times when China was going through its, we call it the wild wild west, when there really, there weren’t that many laws in place, and the laws are in place and to contradict with the other laws. And this was a very, it was a huge time, a huge opportunity in China, but also a lot of challenges. And the successful firms and the successful entrepreneurs were the ones that could navigate the the regulatory and the economic landscape, and still keep their, their their home goals in mind. I lived in China very successfully until about 2012. And then displaying tremendous hubris, I decided that the success I was having in China was was all because of me and not because of the environment. So I tried transplanting my success back to New York. And it was not as successful as I had hoped. People in New York just didn’t care that much. So I eventually decided to return to Asia. But instead of China, I you know, I expanded a little bit, and I started developing my my connections and my knowledge of Southeast Asia. So I started out in Thailand, Thailand was good, a good place to do work, not a great place to do business. So I migrated over to Vietnam. To continue my, you know, to broaden my base in Southeast Asia, it was going really, really well. Until this pesky COVID-19 decided to sort of ruin the party for everyone. I stayed in Vietnam for a while. But this past June 15. My visa expired for the last time, the Vietnamese government had been very generous about rolling over those visas, but declined to do so. This this summer, not just for me for everyone. So I decided to take take stock of the situation, both the political situation at home and the international economic situation abroad. And I decided this was a really good time to expand my base a little bit further and to look at Latin America. For reasons I’m sure we’re going to get into, I think that Latin America holds a lot of promise and a lot of potential for investors and business people and frontline negotiators from all over the world but especially for Americans. So I have been living in Oaxaca, Mexico since July 5 since July 5, so about seven weeks now. So my Mexican career is has been brief but extremely enlightening and I think extremely fruitful. But that brings you up to speed to today. August 30.
Fred Rocafort 9:51
Andrew, thanks for that overview and certainly a very interesting career track and we will walk to delve more into your experiences in Vietnam and Mexico, but I want to go back to China for a while. And I spent quite a bit of time in China myself roughly around the same era when you were there and one thing that I can identify with what what you described, right, there was, you know, the Wild West China for all of us who lived and experienced that, that China, we know exactly what you’re what you’re describing. And there’s clearly been a shift that will be easy to recognize for those of us who experienced that wild west China might not be that clear. For people who are observing from from afar, who maybe see China in very monolithic terms and can’t quite see why why anyone would think that there’s been a shift, what is it that that has changed, you know, when you say that, we don’t say that anymore, because now not everything is possible. Take us through that through that change. And what that has meant for businesses operating in China and for just for regular foreigners trying to get ahead in China, what what has changed.
Andrew Hupert 11:15
The biggest change for me is that China was a developing market. And now in many ways, it is a developed market. There’s still economic growth, but it has shifted. China from you know, from my experience in China started in about 1996. Let’s take it to 2006 2006 was what I identify as the the peak that was peak China, as far as American entrepreneurs and American multinationals. And during China was 2006 was the the high watermark. That’s when entrepreneurs were granted full recognition. Under the law, that’s when foreigners no longer needed, in many cases no longer needed a joint venture partner. And that was the time when the Western influence in China was as strong and as positive as it has been. That all changed in 2008 with the financial crash. And that really ushered in what I call globalism, 2.0 globalism 2.0 started about 2008 and is still in the formative stage right now. The idea here is that China as shifted from being a pure production play from being just the factory of the world. Now it wants to be the service provider of the service can the consumer and the service provider have if not the world of its sphere of influence. So what’s changing is a China is now a more of a consumer than a manufacturer. China doesn’t feel it needs Western assistance to manufacturer, whereas before it did, and China now feels that its economy should focus on consumption, and focus on providing services, as opposed to doing contract manufacturing for Western brands. And this has resulted in a change in the way China views its own economy. And in the way it views its place in the world. As far as the economy, it wants to climb the tech ladder, it wants to climb the value chain. And American style or western style contract manufacturing has has played out has played the role it’s going to play in China. It still does, there’ll be a place for it. But for the most part Chinese, the Chinese government, john nanhai, the Chinese advisors to the government are no longer excited about attracting multinationals to do low value added production work. They want to do their own, they want the r&d to be done in China they want they want to how to vertically integrate the production, the production chain. So whereas you know, take one of the more controversial but more important examples of rare earth minerals where earth metals, whatever we’re calling them today, but the the rare earth minerals. China used to do a very good job of pulling them out of the ground, doing the initial refining and then shipping the powder to Japan and the United States where they would be put into production to make magnets and very high tech high value added products like batteries, and they use wind turbines. They’re using electronics using screens, and that’s where all the value was. China would pull these things out of the ground and refine them in a very dirty process. And then ship the you know, we’re still considered raw materials or very low level materials to more advanced markets, China isn’t going to be doing that anymore, China now wants to maintain the, the, the the part of the production cycle that is more high value added. And this is changing China’s relationship with the West, and it’s changing its relationship with, with manufacturers, you know, contract manufacturers in general. So this all goes along with, I mean, the Xi administration is has been, you know, they would have been much more reticent to keep the doors to the rest of the world open anyway, in a non COVID situation, you’d still be seeing a lot of the same changes you’re seeing where the government is now, much more interested in changing the business as usual, from low value added export to high value added manufacturing, we’re going to see that anyway. And in order to see that, you’ve got that you need a lot more laws on the Chinese side, you need a much more uniform, much more effective regulation. And that’s something we’re certainly seeing when I was living in China in the early 2000s. You know, it was it was pretty much an open joke that someone would say, Yeah, my tax guy came, my 22 year old secretary, just renegotiated my tax package with the government. And it was funny, and it was hilarious, because no one else knew, you know, there were no effective laws. You know, the laws that were on the, on the paper that were on the books, the paper laws, had no relationship to what was really happening, that’s over. That’s over, where you’re not seeing that anymore. And that’s causing a lot of dislocation for for many American firms. Then COVID head, then the Trump administration ramped up, is looking more and more like a trade war and possibly even new Cold War. I mean, that started in, I think, 2018 2019. So you’ve got a perfect storm of contentious relations between the western business community, especially the American business community, and the Chinese regulatory authority, the relationships between individual business people in the United States and in China, that’s fine. That was never the source of contention. But as far as governments go, as far as regulations go, there is there there is, I’m calling it a trade war, is a new trade war. And it does not show signs of getting better, it shows show signs of getting more contentious. So the the issue I’m having with my clients and my my students is the the American business community is waiting for things to get back to normal. But my job is to tell people that this is the new normal, that there are going to be new barriers to to business. And the thing you’ve got to worry about is not the tariffs, which aren’t going to go away anytime soon, not the existing regulations, which aren’t going to go anytime soon. But the unintended consequences of new regulations and new regulatory enforcement, that is going to have a negative impact on people’s business without them knowing. Without mean, you know, the tariff stands at 15% or 20%. Whatever is affecting your business. You can you can, you can work with that. But what you might not be able to work with is new supply chain hiccups, new new inspections, new certifications that you’re going to need, both on the US side and on the Chinese side, that is going to be impossible to predict. And that’s what’s going to kill a lot of people’s transactions and sell their businesses. But they’re trying to trade they’re trying to business. They’re trying to transaction that they’ve been doing since 1990. That is now in jeopardy over unintended consequences of laws that either have just been passed or are yet to be passed. That’s what I think is the biggest danger for a US China business right now.
Fred Rocafort 19:39
Can we explore this a little bit more? I find that very interesting. You alluded to some of what this might look like for example, with new certification requirements. And and correct me if I’m wrong, but I think you are pointing to the possibility that it’s not just the new regulation. That’ll come out and and then that that will be there in black and white for everyone to see. But perhaps the climate in which that is taking place and perhaps the climate that that develops, and quite honestly, I think one of the best examples I can think of, of how that dynamic plays out is right here in the United States with the way that our own government agencies sometimes take the laws or regulations that are already there. And depending on the political winds, blowing around them, or other factors, there’s a certain direction that that things take, there’s a perceived need for for tougher enforcement, that then ends up creating very messy situations. And I think in some cases, even the government agencies that are leading the charge with with the way they enforce things, they sometimes end up in a in a mess of their own making that they just didn’t anticipate and cannot get out of. I mean, in some cases, of course, they have to enforce the laws that are that are being passed. But there’s also a lot of, in my opinion, at least self and post headaches, for example, take Customs and Border Protection as the best example that I can think of with a lot of their own internal responses to a lot of what’s going on with a trade war. So turning back to China again, could you just give a little bit more color to, to what you see happening with some potential examples of what we might see. And what do you think the practical impact will be on businesses?
Andrew Hupert 21:42
One of the clearest cases is something that’s that’s happening now and just is still unfolding. And that was the the Xinjiang cotton boycott, where Western brands, Western manufacturers of apparel clothing, were prohibited were were prevented from using cotton that was produced in Xinjiang, because there was fear of human rights abuses and de facto slave labor. So Americans and Europeans had to demonstrate that they were not using, you know, cotton from the Xinjiang region that was the result of human rights abuses. China really chafes at this sort of this sort of regulation. And they turned around and boycotted, or instituted boycotts or instituted regulations about companies that were observing the boycott. So h&m was a famous, British, or European, they’re a retailer. And they were in effect forced to leave the China market, or their their, their China business dramatically reduced. Both because of I’m doing air quotes here, spontaneous boycotts from from consumers, and new newer views on their business licensing. The Chinese reaction business reactions to Western regs are going to be a factor. But I think going forward, you’ll start to see China imposing its own sanctions. A lot of the I know how old you are, but a lot of us were too young to remember something called most favored nation status. And this was something that China had to apply for, I believe twice a year, up until I think Clinton is the one that got rid of it. So from from Nixon to Clinton, from the Nixon Advent had been to Clinton administration, China had to pass most favored nation, certification in Congress. And China always and there are only a handful of countries that had to do this. So I think it was like China, Libya, and Cuba. there really weren’t that many more. And China always hated this. And you know, China has had up until this administration and China, China always felt had no choice but to submit to these humiliating regulations and these humiliating procedures. And China, as your listeners will know, does not really like being humiliated. You know, we’re already seeing China hang on the rhetoric about, you know, friends and enemies. If you want an example, just look daily in the paper for China’s relations with Australia. China is is it’s mainly for the headlines. But China is enacting more and more restrictions on the trade it does with Australia. Now, in fact, the there it’s not having the desired outcome, but it’s very useful as a propaganda tool that China is asserting its rights. And refusing to be humiliated by Australia, I think we’re going to see more and more of that, as the trade war takes on a life of its own. So my big fears are that China is, China is really trying to burnish its image as the human, the defender of global human rights. So and it really chaffed under the Xinjiang cotton regulations.
So I wouldn’t be surprised if you start to see China require that firms certify that they are in compliance with human rights. And that can take on any definition that China wants. So, you know, my big fear is that China defines global global human rights standard as access to medical care, which American firms would have to certify that they are in compliance, or with pollution, emissions controls, or race relations, China can really has its pick, and you can see a shadow of the foreshadowing of this, because when trying to daily or Shinhwa news agency talks about America, you know, talks about America as the real villain in the human rights drama going on in the world, these are the issues it picks, and China never really surprises you, China always, you know, will love out some some warnings and some foreshadowing, and they’ll test the waters and seeing what sticks before they move ahead with with an action. So those are the areas I would be very concerned about, I would look for China to start requiring some kind of certification or China to to require its firms, you know, firms doing business in China need some sort of global standard that it’s going to decide on. And we saw, you know, with the shinzon cotton, we began to see the the, the the foreshadowing of this. So that’s, that’s I think, China’s going to move on this, they are going to, under the guise of being a defender of human rights or being a defender of international trade, they are going to require international firms comply with their domestic rules. So look for data, you know, the transparency of data, which has already been very controversial. So firms are going to have to keep their servers in China, that, you know, the servers that apply to, you know, the Chinese part of the market, at least, I think has already a law. But that’s going to become much more controversial. And you know, how well firms respect their sovereignty claims in the South China Sea and in Taiwan, in Hong Kong, how well, firms respect China’s rules on monopoly on how well firms respect China’s rules on emissions, and the environment. These are all things that didn’t use to be your problem, your listener, but going forward, if you want to do business in China, this may be your problem going forward.
Jonathan Bench 28:42
Andrew, when I think about doing business across the world, I think of the the laws themselves and regulations, how they’re implemented. And then I think about the human aspect behind all of those laws and regulations. And you’ve touched on that a bit with how China was in early days. I’d love to hear more from you about the your some cross cultural comparisons about who is easiest to do business with who is most compatible with Western business ideals in the way of doing business in the West. Now, you know, between your time in Japan, China, Vietnam, Thailand, now Mexico, can you give us some kind of broad, broad brushstrokes about, about dealing with negotiation and conflict and general general business dynamics?
Andrew Hupert 29:28
Okay. If you want to do business, you know, business at scale, if you want if you’re a multinational, and you want to produce 80%, of your your brand’s output, overseas, all China China pre 2000 let’s say 2018 was the way to go. China was set up for and this is one of the big differences you’ll see doing business in China versus doing business in In, say, Vietnam, or Thailand China was it was a state policy in China to accept new highs high scale of business. So if you went to the Canton Fair in Shenzhen, even if you didn’t know anything about China, you know, if you didn’t know anything about doing business in China, you just walk into the into the Canton Fair with your little little laminate with your, your, your ID, and everything was done for you purchasing customs supply chain, everything was arranged, or you’re just one step away from having that arranged. So in terms of large scale business, which a lot of you know, channel or blog, listeners, like, as far as scale of business, nothing beats China, nothing ever will. And it will never be that way again. From now on your supply chain is going to be DIY is going to be do it yourself, in China, between the special economic zones, and government policy and business community that was geared to contract manufacturing, it was a lot of a lot of your, your mistakes, a lot of your your sins were made up for in the marketplace, there would be someone to help you. They may not give you the kind of help you wanted, they may not have given you the kind of quality you wanted. But you could transact, fast forward to other parts of the world, like Vietnam is probably my favorite for this. But as far as Americans go, Vietnam will not they don’t have the same ambition to be the factory of the world. So if you go to a place like Vietnam, and your production, your product, or your your method, or your material, or your specifications, don’t meet what the factory is doing, they will give you their version of the flat No, they will tell you that they just can’t do it. Now in China that started the conversation. But in places like Vietnam, and Thailand, that will end the conversation when they say they’re not going to do it there. They’re not kidding. And that’s something that Americans are going to have to get used to Americans, especially with respect to manufacturing in China, they were used to a lot of the dots being connected for them. Or they were used to being just one step away from from having an answer. Now, as you know, my friend, Dan Harris, or then and Steve used to tell the other side of that story of what happened when these trades went bad. And yes, they went bad a lot, I understand that. But what I’m saying is there there did exist in China, a complete supply chain of both manufacturing and services. So that you if you walked into China with money in your pocket, and and some version of a design in your hand, you could transact business, the same is not going to be true once you leave China. Once you leave China and you go to places like Vietnam, or Malaysia, or Thailand, or as we’ll discuss Mexico, this, there’s gonna be a lot more for you to do. As far as quality design and supply chain. A lot of this stuff was done for you in China. Now that’s on the institutional side, we will never see a country as eager and as willing and as able to accept large amounts of business in in scale in manufacturing, Vietnam, or other people talking about Vietnam as taking on that role. The Vietnamese are not talking about taking on that role. Vietnam is not going to be the factory of the world. It doesn’t have the scale, it doesn’t have the resources does have the infrastructure, and it doesn’t want it. Vietnam does not need to be the factory of the world. Thailand is certainly not going to Malaysia. No, Indonesia, no. Is it going to be Mexico? You know, possibly the Mexican business community is you know, they’re up for for taking risks. They are willing but they simply don’t have the infrastructure here. Now who’s going to build the infrastructure? The Mexican government? Well, maybe they’ve been working on you know, they’re there. If you know Mexico, you know that they are ambitious in terms of what they will talk about. But the infrastructure on the ground, is, you know, the infrastructure in place is simply not sufficient. And they It’s not a priority, or the Western companies going to build up the infrastructure. I’m not really I don’t see that happening. As a matter of fact, the only the only economy that has shown a willingness to, you know, put put boots on the ground and build up infrastructure is China. And is China willing to build infrastructure in Latin America and Mexico? Yeah, it is. But that’s not going to have the outcome that Westerners want. And this is, I think, one of the great challenges facing the American economy, and to a lesser extent, the western economy, in general, but the American economy in particular, the American business community, is going to have to make some some hard decisions about how it regards Mexico and Latin America. Because if it continues on the same path that it has been on, of benign neglect, at best, often malign neglect, but benign neglect, it’s going to find that it’s, it’s not the partner of choice for these developing economies in Latin America. China is already making moves in Argentina, it’s already making moves here in Mexico. And I think that once it does a few of these big infrastructure deals, you know, these big manufacturing facilities, with the accompanying infrastructure, once it does a couple of these, it is going to build up a, it’s going to build up momentum. And it’s going to build a trajectory, that Western, you know, Americans, American business people and American politicians are going to be very alarmed about. And I think that if we have a desire to, to stop this, then it’s something we have to start working on now. But what I’ve seen is, Americans are not really up to speed, let’s put it that way on the risks and the challenges that they’re going to face moving production out of China. We’ve been talking about it for two years. And I still see a lot more planning a lot more hesitation and a lot more bad compromises, then we should be seeing at this at this space.
Fred Rocafort 37:29
Andrew you bring up a very interesting point regarding China’s influence in Latin America. I think that it’s fair to say that in general, even within the China watching community, I think there is much more awareness, much more chatter about China’s influence in say, Africa, perhaps other parts of the world. I think I think Latin America is a bit relegated when it comes to that conversation. And I think it’s in part at least because of just a general relegation that the continent the region has suffered for for for a long time. I went to Argentina a few years ago and was surprised at the level of Chinese influence there and had I not been coming from China, what was was I not a resident of China, I might have missed some of those signs that might not be obvious to someone going to Argentina, who has not spent time in in China. That influence might not be might not be that that clear. But one of the things that that stood out was one of the more prominent buildings in central windows Iris was, I believe, ICBC you know, or one of the other Chinese banks but I think it was ICBC like very visible Now if you’ve never been to China, you know, you have no idea what ICBC is right? Even if somebody tells you that’s a bank, you might maybe maybe people will not really they might think it’s a local bank, but I was well aware of, you know, what ICBC stood for and I know who they are. So I do think that there there’s a very troubling pattern there. And it’s it’s not perhaps because of this China creep that is of concern to some people although although there’s something to that it’s just the fact that it reveals this this lack of concern with what’s happening right here in our in our own region. One idea that I keep coming back to and I’d like to hear your thoughts on it, you you you seem better place than most people to to address this. And you know, this is coming from someone who spent a lot of time in China. I was there during that peak that you described, you know, 2006 right, that high watermark i was i was there. But as I reflect more on on what’s happened in China, and how things have gone Here in the United States geopolitically, I think that we will, we will look back at the 90s, in particular and see that choice, I remember how big of a deal NAFTA was. And looking back without with a more critical eye, it seems like like it was a relatively well thought out well planned initiative that everyone recognized would have consequences for for trade and for our economy. But then you had this almost unexpected shift, you know, it’s almost as if somehow, we decided as an economy that actually that’s not really the path we wanted, you know, instead of building on on NAFTA. And there’s been some of that, by the way. I mean, obviously, there have been other other treaties. I mean, there is movement in that direction. But it seems like all of that has been overwhelmed by this massive and rather rapid shift to Asia, particularly China, where there was no NAFTA, there was no framework, everything was, as you described it, much more informal, much less structured. And when I look back, I can’t help but think I mean, there’s no guarantee but I have this feeling that perhaps things would have been better if we had stuck with that that path and had had focused on Mexico, which which is, of course, a neighboring country with within the United States has a very unique relationship, and perhaps build on that and strengthen those those trade links to the rest of of Latin America. I mean, Now, of course, people look at China and say, well, there’s no way that Latin America could have stood in for China. But if you go back to the mid 90s, and think of how things could have turned out if there had been more focus on on Latin America, and some of those countries in the region had been developed as manufacturing destinations, that things perhaps could have been very different. I’d like to hear your your thoughts generally on this? I mean, am I completely off base here? Is that a pipe dream? Or do you think that things could have been different if we had looked more critically and had considered the longer term more intensely than we have?
Andrew Hupert 42:15
Things could have been different, and things still can be different going forward. But it requires a degree of centralized in the economy and a degree of of state involvement that America wasn’t then and still and is not now prepared to get involved in. This is the thing about about China that require is, is requiring a rethink, on some on some basic, some basic economics. China was an example of state controlled economic growth. And we’re all surprised it worked all the, you know, all the classically trained economists. And and, and finance ears in the United States are, of course, shocked by this, and we still don’t really want to admit it. But centralized control of the economy has been very good for China. They developed infrastructure, and they developed regulations, and they move people around to a degree that Americans certainly wouldn’t accept at home, and we are not going to pay for it to happen in Mexico. So I think that it’s, you know, what you’re saying is in a very broad sense, yes, it would, we had the opportunity to develop manufacturing in Latin America, and we still do, but it’s a matter of who is going to take the lead on this. And this, the different state actors in Latin America, have not really shown themselves to be up to the task. And American, Washington for the last, I don’t know, let’s be generous and say 40 years or so, haven’t really been great builders. We haven’t really done enough with our own infrastructure, you know, our own required infrastructure, just roads and water pipes and, you know, basic stuff. We haven’t really developed the facility at building up infrastructure. So that’s going to be a requirement in Latin America. It’s who has the deep enough pockets, and who has the expertise and who has the patience to build roads, build rebuild ports, build power companies, build a power grid, build wells, you know, build build reservoirs, which is my particular problem here, where I live in Mexico. So It’s one thing to, you know, look at the look at the statistics and say, yes, Mexico and Latin America have have a lot of potential. But it’s quite another to map out a budget and a timetable for when you’re going to turn that potential into reality. And I don’t see America doing it anytime soon. Could individual companies do it? on a limited basis? Yes. I think that will happen. I think Unfortunately, the Immaculate macula Dora system is, is taking a lot of the oxygen out of the room. As far as American involvement in in Mexican business, I think we need a different approach than that, which is really a lose lose scenario for almost everyone except the shareholders of Ford and General Motors. But you know, are people going to build build ports and build roads, and build these new automated factories? I think American people are not I think Chinese people may. And that is a big fear of mine. Because based on what we’re seeing in Africa, and what we’re seeing in Latin America, it seems that China does have the the ability and the will to build up infrastructure, whether or not they’re going to do that in Latin America remains to be seen.
Jonathan Bench 46:28
Andrew, it’s hard to believe that we’re already almost out of time, we’d like to close with asking you for recommendation for our listeners, something you’ve read, something you’ve listened to seen lately. Basically anything at all, it can be very much on point with what we’ve discussed today, or it can be something lighter and fluffier. Okay,
Andrew Hupert 46:47
First, I’m gonna shamelessly plug my own project, globalism 2.0, which you can see on globalism two.com. It is a podcast that I’m just taking out of hiatus now. And I am going to be wrapping up again, actually, this week, talking about the the new globalism, globalism 2.0. What’s been happening in the world. Since the old globalism ended, I’m putting the date on that at 2008. And we’re entering a new and more interesting world where the United States is not United States is definitely a player, but we’re not the only player anymore. And now we will have to contend with a more activist China, more activist Europe and other pockets of or not necessarily pockets. But other players, other spheres of influence that are going to make your life as a frontline negotiator. more exciting, but also more, more risky. I recommend that people start looking at least at Mexico, Latin America would be nice, but at least it Mexico my two favorite sources here or Mexico news daily.com and Mexico dash now.com. Those are two of my favorite sources for figuring out what’s going on in Mexico. And I’m still watching Vietnam very carefully. So my favorite sites there or Vietnam net.vn slash n slash business. And if you’re watching Vietnam, the American Chamber in Vietnam does a lot of publications that will really keep you up to speed much better than the official press. If you want a view of the entire Southeast Asia region, take a look at business times.com dot s g is out of Singapore. They are like the New York City or the wall street of Southeast Asia. But to hear more about what I’m talking about globalism to.com is my sight and shamelessly plugging once again. That’s a good way to keep up to speed.
Jonathan Bench 49:00
Excellent. Thank you, Andrew. Fred, what do you have for us today?
Fred Rocafort 49:04
I stumbled upon a great article right before we started recording. And it actually touched us on on some of the subjects that we’ve discussed during the podcast. So so it has that direct relevance, which is not always the case with my recommendations. But basically this article provides an overview of China’s influence in Tonga, the Pacific island nation, and it’s titled meth, vanilla and gulags. How China has overtaken the South Pacific one island at a time it’s out in Politico and the author is Susanna Luthi. But as always, we will have a link on our on our website when we publish the podcast. fascinating article. In some ways the story will will have familiar echoes for for those who track China especially its involvement overseas development projects, the presence of Chinese workers there, but but it’s it’s really well written really fascinating. And then of course, part of what really jumps out is the attention China’s paying to a pretty small country, right? I think that in itself speaks volumes. So, so check this out and tip of the hat to Shannon brandao, for wanting me to that article. And Jonathan, what about you?
Jonathan Bench 50:36
My recommendation today is 100% fluff. I stumbled upon honest movie trailers to channel on YouTube, and they take popular movies and popular sets of movies, you know, like, take the Marvel Cinematic Universe or something like the original Indiana Jones trilogy, and they do an honest movie trailer. One of the best things is the they have a guy who does the amazing voiceovers, you know, he sounds like he’s doing the real trailer for the movie, right? So really impressive, a lot of fun to listen to you. And they’re short, you know, five minutes or so each is comedy, right? So they’re picking apart the movies for inherent flaws, things that are inconsistent in the storyline. But also just fun things that you might have missed, even if you’re a big fan of the movies. So highly recommend that if you got some downtime and you want something that is serious fluff, honest movie trailers on YouTube. And with that, Andrew want to thank you again for being with us. It’s been a lot of fun. We’ve enjoyed your wide ranging expertise and hope that we can catch up with you again sometime in the future.
Andrew Hupert 51:35
Guys was a real pleasure. Sorry, the time went so fast. Look forward to sitting down with you again.
Jonathan Bench 51:43
Global law and business is a production of Harris Bricken. The team includes Madeline Williams and Michaela Moore. The music is composed by Steven Schmitt. If you like the show, subscribe on iTunes and leave us a review there. We’d like to hear what you think of the show and it helps new listeners find us. Tune in next week for another episode. We’ll see you then.
Transcribed by https://otter.ai