Haobuhao Chicken

It’s me, Johnnie Bosch, After the last article, “Stop crying Wolf, when you are surrounded by Chickens!” I received calls asking if I was anti-China, my immediate reply with a laugh are you kidding me! Some of my closest and most trusted friends & colleagues are Chinese! They are mainly Hong Kongese (my second home) and Taiwanese. Many of us grew up together in the industry as well as helping each other build our own companies & businesses. Many times, we helped each other with no benefit to ourselves. These friendships go far and above business. They are personal and many became family friends.  I do have very close friends in the mainland as well. In many ways, I am more Pro Chinese & China than most.  With that being said, I am an American, my babies are American. Need I say more!

  My first trip to Asia & China was in the early 1990s about 1 1/2 years after Tiananmen Square. I crossed the Lo Wu Bridge from Hong Kong NT into Shenzhen. I went from one world to another!! In many ways, I was entering the Twilight Zone. WOW! Can I tell you some stories? I have witnessed first hand a country and it’s people transform, grow and prosper. From dusty dirt roads and shanty towns to a prosperous booming country with shining cities and became a global manufacturing hub. People have become confident in themselves and determined to succeed and they have! 

 Quick funny story- At the time of my trip to China I was 350 lbs. my hair was dirty blond. Let’s just say, I was the biggest Fattest White guy they ever saw with dirty blondish hair!! They let me know that I was not like them! The cabby refused to let me in his car. He told my buddy Eric he was afraid, I was too fat and I would break his shocks and suspension. Eric paid extra and convinced him ( it’s all about money in China). Later that day we walked into the town near our new factory being built to go have lunch. The people would stop in the streets and stare and point at me. Tell their kids to look at me. Like I was a freak. To them, I was. For the first time, I realized that I was in their world and not mine. 

The reason I am so passionate and have become outspoken about the Treaty & Trade negotiations is that there is so much at stake. For our country, our people and our companies. Many of the voices we are hearing are either swayed for their companies purposes or not experienced enough in doing business and negotiating with the Chinese in China. Let me point out some of the key issues for thought. Let me stress, I will be skimming over each topic, there is much more depth to each one.

There are 3 new foundational pillars which will change the world, how we live and impact every part of daily life. It is technology driven. It will touch every key element of life for the next 50-100 years. Economic, Militarily, Communications, Transportation, Smart Cities, Healthcare and the list goes on.

These three Pillars are 5G, AI & Quantum computing. Each is mind-boggling on its own by any comparison. When these 3 Pillars are incorporated and working hand in hand, they will create a platform and launching pad creating products, services and a way of life many of us cannot imagine. All the good that can and will be created to help mankind, at the same time, in the wrong control, Evil can be created and will! 
This is a race that cannot be lost! We are nose to nose with the Chinese on all 3 of the key Pillars. Both sides are focused on winning this race. On a level playing field, I know we can compete and beat anyone in this race. The key word here is “Level Playing Field”. The Chinese have never played on a level playing field. It could become quite uncomfortable for them.

Many of the issues between us are far greater than just Tariffs and basic Trade. Here are a few.

1- Trade & Tariffs – this must be 100% reciprocal on all trade & services. No exceptions. Every tariff must be matched.  Any product or service where it is not 100% reciprocal should be banned. No exceptions. This will get the blood flowing.

2- China must stop Forced Technology transfer. They are forcing our companies to give them their technology in order to do business in China!! 

3- Stop the theft of our IP and corporate secrets. Stop performing hi level espionage against our people our schools and our companies. If not, Ban Chinese students from our schools and limit entry visas etc. This is a huge problem not many know about!!  Very serious situation. 

4-  Must Allow 100% foreign ownership for business & personal investment. Including real estate and stocks. Currently, a foreigner must be a minority partner (49%) to a Chinese Corp in order to own a business in China. China must open all its markets to us as we have done for them. If not, we should take control & assets ( 51%) of all Chinese owned companies here, as they to do us in China. Do it and it will make them move.

5- Allow the free flow of the RMB. Currently, you cannot transfer your profits or money out of China. They have control over the flow of their currency. Very limited on the global markets. Investors cannot get their money out of China. This is a big issue. The RMB must also be opened up and float & trade on the open global currency markets.

6- 100% open markets for our companies. Currently, their markets are not fully open to us. It is very limited at this time. The Chinese government really controls all aspects of the markets. This allows the Government to limit the competition against its companies and internal markets. As I mentioned in my earlier article, the Communist government controls all aspects of their economy. Remember, we are NOT  dealing with Free Markets, a Free Society and a Free People. Remember my comment on Level Playing Fields. 

7- Eliminate the 17% export tax exclusion that China owned companies receive. Their competitors who are not Communist Chinese owned factories & partnerships do not receive this tax rebate. That includes ownership from Hong Kong and Taiwan. This is a huge competitive advantage for those China owned export companies in China. The issue that should also be raised is the governments consistent propping up and funding of their companies who are not viable in the open markets and basically, mismanaged, distraught & bankrupt. They keep propping them up and it creates artificial below market pricing which can and does disrupt markets. You would be surprised how many of these Buhoa companies are government supported. It really does hurt the markets they are associated with throughout the supply chain. It affects and destabilizes pricing, quality, product integrity etc.

8- This is a long shot, I would like to see as part of this Treaty a US recommitment to the long term freedom and protection of Taiwan. I hope Taiwan does not become a pawn in this chess match. The people and the country are beautiful. Moving forward, Taiwan should be a crucial centerpiece of our Asia policy with a focus on the South China Sea. This could become the real hotbed in the next 10 – 20 years probably sooner!

There are many more issues. Hopefully, this will give you an idea of some of the things at stake.