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I was just starting high school in 1971 when President Nixon began “reopening” relations with communist China. It was a very big deal. I was too young to either know when trade with China had stopped or even why. But my grandfather, who was a retailer in Boston, was very excited and I do remember family discussions about what was going to come in that first container of goods he would order for the store.
Eventually, that first container arrived. It went to the store with the merchandise for a specially designed and constructed display of exotic and unusual Chinese goods, the first to be available in Boston in decades. But my grandmother’s taste ran toward the Asian influenced décor that had been popular when she was growing up in the 1920’s so there were a few things that came home to their Beacon Hill townhouse almost immediately.
My grandparent’s house was one room wide, two rooms deep and five stories tall. It had real crystal chandeliers in the dining room on the first floor and the living room on the second floor. Most all the furniture was dark, wooden, very antique and set on oriental rugs. My grandmother had chosen wallpapers with an Asian feel and my grandfather’s collection of marine oil paintings were hung on most of the walls. Many of his paintings depicted Hong Kong harbor and the warehouses along the wharves. Among them were paintings, from his family, of sea captains and their ships. His father’s was a British family and these were ships’ captains who sailed from England to the far east with the British East India Company. His mother’s family had seafaring roots as well, but they were tied to the China Trade between the United States and Hong Kong, the trading capital of the far east in the 1800’s.
Two items from that first shipment stand out to me to this day, There was a beautiful carved mahogany table, long, narrow and low to the ground, which became the prized coffee table in their living room, the only new piece of furniture in the room. Today it is in my living room and considered an antique. There was also a fanciful wicker peacock chair with a high, rounded back and a woven pedestal stand. It was quickly sent to their summer house on the north shore and displayed on a second-floor landing. Today it sits, thronelike, in the gallery at the back of my store, a prized seat during after-hours relaxation.
These days, the hottest topic in retailing is Chinese goods. Do we need them? Will trade tariffs put them out of reach? Can we make things elsewhere to replace them? How will it affect our economy? Our standard of living? Our future as a world trade partner?
Historically speaking, US/China trade is one of the more interesting relationships in US history. In 1773, when the colonists sank the British East India Company’s tea in Boston Harbor they mourned the loss as much as later Americans mourned the stronger beverages that were outlawed during Prohibition. Tea was the national drink. It was shipped throughout the British colonies by the British East India Company. Separating from the British meant losing their connection to the tea trade. And that is how coffee became the American beverage.
But, in 1784, the United States of America sent their own trade ship, Empress of China, out of New York with Appalachian and New England ginseng, which the Chinese were willing to take in trade for tea, and the era of direct American trade with China began.
Fast forward 150 years while ships carried luxury goods (silk, ceramics, tea) from China to the west and the west tried to figure out what the Chinese wanted to buy (smuggled opium). US/China trade took a roller coaster ride resulting in the so-called Opium Wars and the eventual realization that China was mostly happy without American goods while the US craved what China had to offer. For most of the history of Chinese/American trade the Chinese have sent us things we wanted while we have never quite understood what the Chinese wanted. The trade deficit is nothing new.
Before World War 2 Japan occupied China while the US backed the Chinese nationalist government, arguably part of the reason we wound up on the opposite side from the Japanese. However, in 1949, after World War 2, the Chinese Communist regime of Mao Zedong overthrew the nationalists and all US trade with mainland China stopped. Diplomatic relations ceased and the long history of US/China Trade, reaching back to Empress of China’s first sailing, came to a halt. For 20 years the US did not have any official contact with China. Americans could not visit China. Chinese nationals were not welcome here. American goods were not allowed in China and Chinese goods were not allowed here.
One of the significant factors in the 1968 presidential election was that Richard Nixon was interested in resuming normal relations with China and there was a lot of money to be made. We were the world’s largest economy, but China was the most populous nation seemingly offering a ready market for the enormous surplus of agricultural and manufactured goods that the US could produce. How could they resist? By 1969 things were thawing and, in 1971, the Chinese invited our ping pong team to come to China and Henry Kissinger made a secret trip, as Secretary of State, to negotiate a normalization of US/Chinese relations. In 1972 Nixon visited China and the game was on.
By 1979 things were back to normal. China enjoyed favored nation status and, for a decade, East and West were cordially trading back and forth in an almost neighborly fashion. Until Tiananmen Square. In 1989 the Chinese used military might to put down a peaceful, pro-democracy student protest which resulted in the world watching on television as hundreds of students died at the hands of their own government. The US responded by, among other things, cancelling sales of weapons to China. China, once more, cut off all relations with the US. It took a decade to thaw things again but only another decade for China to become the world’s second largest economy.
Over the last fifteen years China has positioned itself to lead the world in developing manufacturing and tech using inexpensive labor and communist government subsidies to compete in the global marketplace. And that is why we are currently, or should I say still, in the midst of a trade war with China. But, at the root of it all is the fact that China hitched their trading star to highly coveted and proprietary tech while the US offered them soybeans in return, a product grown all over the world. Once more, they have what we want while we are still trying to figure out what they want. Once more, the trade deficit is nothing new.
When I started this store 40 years ago a good amount of what we carried was made in the USA. A large percentage of our leather goods were made in England. Many inexpensive goods were made in India or Argentina and that about covered it. Over the years England lost their high-end tanneries and most of their traditional leather workers and saddle makers. India and Argentina have worked hard to develop a culture of skilled leather workers and saddle makers producing high quality goods. For a few years we saw lovely items out of central Europe. Australia revolutionized the saddle market with high tech designs made from innovative materials. Western saddles and tack are still made primarily in the US or Mexico with China entering the market only in recent years. Viet Nam has also stepped up to the plate and makes some very high-quality goods. But very few companies manufacture equestrian goods here in the USA.
There are manufacturers of equestrian leather goods in China. So far, they are not a quality I feel comfortable with selling. But, over the last fifteen years many manufacturers have moved blankets, pads and other manufactured soft goods and tack to China and closed US factories due to costs. 40 years ago, most of our breeches were made in the USA. Only a very few remain. And the trend continues. In the last few years India has been able to compete favorably with the Chinese in many areas. They, too, have a huge, highly skilled workforce willing to work for far less than US workers. If I have a choice, I choose Indian made goods over Chinese made. I constantly search for US made goods with very little success. When I find them, I must weigh the costs against the market very carefully. As an example, there is one very good US manufacturer of breeches which has been well thought of for decades. However, 20 years ago they were competitive or a tiny bit higher than imported products. Today they are over twice the price, to the consumer, of an Indian made product for similar style and quality.
In a perfect world, US manufacturing will, eventually, be able to compete on the world stage again. But the reality is that we will need to find our niche in the vast and complex system of global trade. American workers are used to a certain standard of living and the world is used to inexpensive goods that improve everyday lives. We, like the Chinese, will need to figure out what products our economy can produce for the global market on a competitive scale. None of this is easy and none of it will happen overnight. Meanwhile the trade deficit will still exist simply because the US cannot build manufacturing capacity fast enough to reverse it. Sadly, by the time we do build the infrastructure, we are likely to have lost the confidence of the world market and will have to learn to compete in a very different arena.
Our reality for the future is that the American and Chinese economies will both thrive if we work together or both falter if we do not. US/China trade remains, after close to 250 years, a bit of an enigma. We are two fiercely independent economic powers vying for dominance in a rapidly changing global marketplace. Small industries such as those serving our equestrian market, will shift their manufacturing to India and other nations, more aligned with our interests, to compete. But there are many larger industries that will find it much harder to adjust. Clothing, home goods, toys and electronics are all so firmly tied to China that it remains to be seen how the new global market will affect us.
Meanwhile, in our little corner of the world, horses still need saddles and bridles, fly spray and liniment. Riders still need breeches and boots and helmets and gloves. And, as always, we’ll do our best to have them in our store, at competitive prices, when you need them. LHS
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