Asia’s Prosperity Presents Both Challenge, Opportunity For U.S.

China’s gross domestic product will overrun that of the United States in another decade, but that prospect should be considered an opportunity as well as a challenge, Spokane consultant Phillip Grub said Monday.

Grub, a former professor of international business and management at George Washington University, said the output of all Pacific Rim nations will reach $13 trillion - twice that of a unified Europe - in just four years.

But Asia’s economic dynamism should not be cause for despair, he said. “We can compete.”

Grub, speaking to Leadership Spokane in conjunction with the community’s celebration of Japan Week, suggested that Japan’s strategy offers a good example for U.S. officials.

As domestic production costs increased in Japan, he said, manufacturers placed more facilities overseas.

Grub said Japanese businesses have benefited doubly; they have been able to moderate increases in the cost of their goods, and the plants have introduced those products into new, high-growth markets.

The upshot: Japan has captured between 19 percent and 34 percent of the market for imported goods in 10 Asian countries, including 22 percent in China.

Although the Japanese work force is paying a price for the movement of plants overseas - unemployment exceeds 6 percent by Grub’s estimation - the government is taking steps to push Gross Domestic Product growth this year past 4 percent from zero in 1993.

He contrasted the Japanese approach with that of the U.S. government. We dispense foreign aid, but too often sound counterproductive isolationist and protectionist rhetoric, he said.

Compare, he said, the expanding fortunes of Japan and China, which have received little or nothing in the way of American assistance, with foundering multibillion-dollar aid recipients like Egypt and Russia.

“Aid assistance is not the answer, because it has proven to be a handicap more than a means of development assistance,” Grub said.

To improve the competitiveness of American business, he said leaders must do a better job of defining their vision for the future both domestically and internationally.

And while learning to respect other cultures, they must understand that trade, foreign investment and technology transfers will be catalysts for change, he said.

At home, Grub concluded, the U.S. must reduce its deficit; buttress productivity, research and savings; reverse the spread between worker and executive pay; and raise education standards.

“Only well-educated and informed leadership can make the next decade the age of the United States, especially the Pacific Northwest, not just the decade of Asia,” he said.

, DataTimes