Geithner's China Visit Adds Fuel to 'Great Comeback' of U.S. EconomyWednesday, June 3, 2009
RALEIGH, NC and SHANGHAI, CHINA — Global business consultants Jim Tompkins and Steve Ganster view this week's meetings between U.S. and Chinese economic policymakers as a key stepping stone to worldwide economic recovery that is already underway in the U.S.
On his first official visit to China, U.S. Treasury Secretary Timothy Geithner is focusing on ways to end the global economic recession. "It's clear that the U.S. is in recovery mode," says Tompkins, CEO of global supply chain consulting firm Tompkins Associates. "The U.S. consumer is driving this comeback, and the return of consumer confidence will lead to an increase in business volume and capital investment in China. We are now seeing that China's manufacturing sector has expanded for a third month, and U.S. manufacturing and construction spending is looking more optimistic. Thus, having the world's first and third largest economies convening now to solidify strategies is very important."
Tompkins, author of The Great Recession Gives Way to the Great Comeback, notes that one impetus behind the rapid, deep spread of the recession was organizations' super-fast and super-efficient global supply chains. "These same supply chains will now lead us out of the downturn," Tompkins says. "It will take all the stimulus weapons of the U.S., China and Europe -- plus the supercharged supply chains -- to complete the Great Comeback globally."
Ganster, Managing Director of Technomic Asia, knows the economic heartbeat of China well, having worked and lived there during previous downturns while helping U.S. companies establish operations. "During the U.S. recession of 2001 when China was at the threshold of entry into the World Trade Organization (WTO), forward-thinking U.S. companies who saw both the impact of China becoming a member of the WTO and the quick return of the U.S. economy were establishing China operations. They reaped the benefits for the next 8 years of China's nearly double-digit growth," he says.
More recently, Ganster has been connecting the dots between government stimulus and growth in China's consumer goods sector. "I just met with the leader of the supply chain initiative for China's largest grocery store chain. They are building a state-of-the-art distribution center in part with government funds," he reveals. "This is one of many examples that lead us to believe that the Great Comeback is underway."
As Geithner talks with Chinese officials, some of the U.S.'s top industries will be hitting their economic bottoms and gearing up for a post-recession return to recovery, growth and prosperity. Tompkins urges companies to look beyond the macro economic headlines of the China talks and focus on their sector's details to convert today's comeback plans into tomorrow's profits.
"While the May Consumer Confidence reading of 54.9 surprised some, our research in such industries as food, cosmetics, pharmaceuticals, and inexpensive consumer electronics shows that these sectors are on the upswing," Tompkins adds.View all Industry News