Manuel C. Menendez, the founder and CEO of MCM Holdings Group, is an American businessman with deep connections to China.

In the few lines of resume he provided, he wrote quite low-key: he played an active role in China's return to the world market in the late 1970s; when he was the chief executive officer of Great Eastern Development Co., Ltd. (GED) in 1980, Facilitated the establishment of the first Sino-US joint venture between China and the world's top 100 Fortune companies.

Manuel C. Menendez, founder and CEO of MCM Holding Group.

Photo by China News Agency reporter Pang Wuji

　　In fact, his experience is far less low-key than in his resume.

Mendes came to China in 1979 and witnessed China's reform and opening up and the economic miracle throughout the process. He told reporters that the Chinese name "Mengdes" was created by Deng Xiaoping in 1985.

　　Pang Wuji, director of the Macro Acquisition and Editing Office of the Ministry of Economic Affairs of China News Service, recently had a conversation with Mendes.

Montes believes that China and the United States will not and cannot decouple, and the economic and trade relations between the two sides are moving in a positive direction.

He shared his insights and put forward many practical suggestions on the "real problems" in the current Sino-US economic and trade relations.

The following is an excerpt from the dialogue:

Pang Wuji: Since September, the United States has continued to send positive signals to China.

After the Sino-US economic and trade team restarted the exchanges, the communication between the two sides has advanced to deeper and more specific areas, and more extensive and in-depth.

How do you see this change?

Mendes:

Since the beginning of this year, the frequency of dialogue between the United States and China has been much higher than in the past, and every meeting has made some progress. This is a very positive sign.

The urgent and priority issues for both the United States and China should be more interaction, more meetings, and more discussions.

　　Regarding trade frictions, both the United States and China have reasonable concerns.

I don't think that one meeting can solve all problems. This will be a gradual and gradual process.

　　Due to the global pandemic of the new crown pneumonia epidemic, countries are facing many challenges.

Some issues have become more urgent.

This is like saying that there are many places on fire, and you must decide which one to extinguish first.

I believe that at present, the health and safety of the people is the top priority of every country. Countries are focusing on the health and economic recovery of the people under the impact of the epidemic, such as the US Infrastructure Act, economic stimulus plans, and so on.

In addition, for the United States and China, trade relations are one of the top priorities.

　　In general, my proposition is more frequent dialogue, exchange and communication.

The willingness to communicate is a good signal in itself, which means that the window of dialogue is still open.

The current several exchanges are moving in a good direction. US Trade Representative Dai Qi mentioned the need to "re-link" with China.

Data map: Chinese flag and American flag.

Image source: People's Vision

Pang Wuji: What do you think of the saying that China and the US "re-link"?

Mendes:

I don't think the United States and China have ever decoupled.

Over the past 40 years of China's reform and opening up, the U.S. and China economies have been interdependent and intertwined.

In fact, I don't think there is a possibility of decoupling between the United States and China.

　　There will be some problems in the cooperation between the two countries. For example, when it comes to high-tech fields, there will be some highly sensitive content, such as network security.

This is also the reason why I advocate increasing the frequency of dialogue and exchanges.

　　As a businessman, my advice is not to deal with all problems at the same time.

In business development, "momentum" is very important.

For example, when driving a car, the energy used is the greatest, and when the wheels start to roll, the friction becomes smaller and the energy used becomes smaller. This is "momentum."

The same is true for the dialogue between the two countries, starting from the beginning, moving forward gradually and returning to the conversation table.

　　The method is to select some things that both parties can agree on in some large meetings, and reach an agreement on these things, and there will be a forward momentum.

This is not only good for US-China relations, but also good for the world.

Data map: "National Development and Reform Commission and US multinational companies in China high-level round table-"14th Five-Year" planning outline exchange meeting, Shanghai Station" was held.

Photo by Wang Zitao

Pang Wuji: As far as Sino-US relations are concerned, what can increase this "momentum"?

Mendes:

I divided the US-China relationship into two "buckets". One "bucket" contains policy issues and the other "bucket" contains structural issues.

Resolving structural issues is very complicated and may require changes in rules or laws.

So if you want to create this "momentum", you can choose to solve some policy issues, such as tariffs.

　　I am not saying that everything on the tariff list can reach an agreement immediately, but it is possible to gradually get rid of the previous additional tariffs in certain categories, such as agricultural products, health products, clothing and footwear, etc. that are not sensitive. Yes, it can also bring positive "momentum" to U.S.-China relations.

Pang Wuji: The United States continues to face greater inflationary pressures. Importing high-quality and inexpensive products from China can actually help alleviate such pressure. Based on this, can China and the United States usher in a smoother trade relationship in the future?

Mendes:

Before answering this question, I want to say that "trade imbalance" is a big "political football" in the United States.

But I will tell American businessmen and politicians that the trade imbalance is not caused by China.

　　There is a market when there is demand.

The reason why China exports more goods to the United States is that American companies order goods from China because Chinese goods are of good quality and good prices.

Usually the global business rules are: the winner is the one with the best quality, the most favorable price, and the most efficient transportation.

When companies that do business in China, such as Wal-Mart, Market Opener, Nike, and Apple, order goods for the US market, this is the source of trade imbalance.

　　Early companies established in China, including Procter & Gamble, Starbucks, McDonald's, and General Motors, have been well developed.

These companies have served both the Chinese market and the U.S. market well.

Some people in the United States, such as Trump, said, "China made us lose jobs", this is not true.

We need to return to the previously mutually beneficial and cooperative US-China relationship.

CRRC Changke's Springfield production base in the United States.

Photo courtesy of CRRC

Pang Wuji: What do you think is the biggest misunderstanding and misjudgment of China by some people in the United States?

Why does the misunderstanding seem to be deepening in recent years?

Mendes:

Part of the reason comes from the media and politics.

If people have never been to China and do not understand the situation, they may cause misunderstandings.

　　Since China's reform and opening up in 1979, I have often travelled between the United States and China.

My company helped to establish the first joint venture between the United States and China. I witnessed all the changes in China with my own eyes. This is a great miracle and incredible.

　　If I were the richest person in the world, I would bring the mayor of every city in the United States, the governor of every state, and even members of the US Congress, and let them come to China.

Not only Beijing and Shanghai, but no matter where in China, the people here are very friendly to me, as Confucius said: "It is a great pleasure to have friends coming from afar."

　　Confucius also emphasized "benevolence and kindness." Therefore, China is not interested in conflicts and has never invaded outwards.

　　China is rising, but this does not mean that the rest of the world will be weakened.

The rise of China has actually helped the development of other countries-China's rapid growth has driven huge demand.

China is already playing the role of a stabilizer.

For example, during the 1997 Asian financial crisis, the currencies of many countries depreciated.

But the yuan remains strong, which helps stabilize Asia.

　　A very important measure for the relaxation of US-China relations is to strengthen educational exchanges.

More and more Chinese students to the United States and American students to China will deepen mutual understanding between the two sides.

I have always believed in this idea: to achieve world peace through world trade.

"When people need each other, peace naturally arises."

On October 29, the second Sino-US Economic and Trade Forum of the European and American Alumni Association was held in Shanghai.

Photo by Zhang Hengwei

Pang Wuji: What impact does the Sino-US economic and trade friction have on American companies?

Mendes: There

are no winners in a trade war, only losers.

From the Trump era to the present, the trade war has not played a "predicted" role at all.

Some thoughts in the political circle at that time were that if high tariffs were imposed on Chinese goods exported to the United States, then Sino-US exports would be closer or even equal, and more American companies would return to the United States-but this never happened.

To improve competitiveness and provide a level playing field for every company, tariffs should not be used as a means.

　　China has not launched a trade war.

China's typical way of doing things is to respond to external pressures, so it raises tariffs on products imported from the United States.

　　For companies, when there are difficulties in trade, some American companies will redesign their supply chains.

As far as I know, most companies have neither, nor will they completely abandon the Chinese market.

If you are a major multinational company, you cannot give up participating in the second largest market in the world.

Pang Wuji: What expectations does the American business community have for Sino-US relations?

Mendes: The

vast majority of American companies, especially those with business in China, undoubtedly hope that the relationship between the United States and China will become better.

They also hope that there will be more dialogue in areas where both sides have problems.

There are some areas or markets that foreign businessmen want to enter, but China has not yet opened up.

Someone may say: "Oh, this is protectionism", but this is not the truth.

　　I explained to my friends that sometimes you have to look at China's "timetable".

In my impression, China has never completely opened up any market at once, because it is a large country with a population of 1.4 billion.

China's approach is to try to open the market in a region to see if there are any problems, and then gradually open it step by step.

So, be patient.