 Good afternoon, Monday afternoon, and we're going to be talking with my co-host, Russell Liu, and he's in Beijing right now, in a cold corner of the world, which is going to be part of our discussion today on the election of Donald Trump as the new president of the United States, barely a week ago. Is Russell on? There he is, there he is. Aloha, ni hao. Russell, why don't you tell our viewers where you are in Beijing right now, live, and tell us about the weather and your surroundings. Go ahead. Sure, Ray. I'm in Beijing where it is cold, it is in the 50 degrees, I mean, excuse me, 40 degrees. Somebody just walked in front of me. I'm in a coffee shop in the Guomau Towers, number one, where all the major international transactions are done. All the law firms, all the multinational companies are here, like Shell, Oil. So I'm in the hub of things, and I believe it happens in this coffee shop. I'm facing this huge American flag, which is used as an advertisement. Well, I know that area quite well, the Chaoyang District of Beijing, and it's far away where your apartment is in the Hadian District, am I correct? Yes, that's great. It took me about two hours to get here by the underground subway transit, excellent transit system, and I just went through the rush hour. So you can imagine what it's like, especially in these Chinese cities where millions of people live, and to get here, you have to catch a subway. If it took a taxi, Ray, I would double the time, because the cars do not move. So if you compare the traffic in Beijing right now to any place in the world, how bad is it? At a scale of 1 to 10, at rush hour, it's 10. There is no problem about that. So you're at the most crowded metropolis in the world, and it's the second largest economy now in the world. And you have a world where U.S. businesses and global businesses are interested in selling to Chinese consumers, investing in China. Those two hotels, I mean that hotel, you're part of their China world. I've stayed there many times, and it's part of a whole range of hotels, like the Kerry Center, and Traders, and others. Nearby is the Great Wall Chariton, the Hilton. And of course, you walk a little bit down, you have Wang Fujin, the department stores, and more hotels. So you're in the middle of one of the leading metropolises in the world. Yes, yes. And construction is non-stop. In fact, since I was last here, New Mall is being almost ready to be open. And it's a huge mall in Guamal with every international brand you can think of. Incredible what goes on in here. Very incredible. So here we are with a contested election between a representative from the Democratic Party, and there was a representative from the Republican Party. And there were other parties involved, like Libertarian Green Parties. And this must be of great interest to the Chinese in the street, where there is only one party in China, the Communist Party. And in your kind of discussions with friends and contacts, what did they feel about, first, the presidential election process, which was quite heated along? Any thoughts there from the man in the street in China? I think this is very fascinating from the perspective of the Chinese. But I think what we need to understand is we're looking through the eyes of the Chinese. So we have to understand the background of the backdrop of how they are looking for this. And we have to remember this is society. It's a Communist Party. But most importantly, it goes back thousands of years where it's a Confucian society, where we have the emperor and Confucianism, where they are used to one ruler, one party, one ruler. And from their eyes now that China has developed rapidly, many of the Chinese are going to study abroad. They do bits abroad. So they now get exposed to individual choice. And so I think that's what I would characterize now if they're looking at individual choice. I think the important, first of all, that the coverage of the election in China has been to some extent restricted. So, you know, unless you have a VTA or ways to get out near then to see it, maybe a lot of the masses may have not seen the election anymore. And also, those that are fluent in English have an easy time tracking it. But from what I did learn from some of the colleagues and lawyers who are Chinese, they were just fascinating. They're fascinating because no matter who is at the end of the day, your vote, you have a choice. Who are bad? And that's the democracy system. And there are other thoughts I want to share with you about what does it mean, the implications of voting for this new president. Well, that's fascinating because even when I speak to my Chinese friends from long time ago, and they're very educated people, they know about how democracies work. They were always emphasized from way back when, economy first, politics second. You know that phrase quite well. But even in a city like Beijing or, you know, districts in Beijing, you cannot vote for the mayor of Beijing. That's continuing to be true in the year 2016. So the whole election process of debates and a woman running it and all kinds of appeals to middle class, the lower middle class, all kinds of segments of American society must have been very interesting to the Chinese man in the street. But moving on, now we're in a new era with a new president, President Trump. And he has said that he doesn't like the way China has conducted trade in the past and that they can't sell us everything and then we can't go and sell them nothing. There's an unfairness that Trump always talks about that this takes away jobs from middle America, manufacturing jobs that all went to China. And it comes back as manufacturing goods for people to buy at Walmart and so forth, which is a good thing for local consumers when you think about it. Americans love cheap things and they can buy them at Walmart, and the Costco's, and Sam's clubs, and so forth. So it is good that they get access to lower price goods. And so on the other hand, of course, Americans' jobs are saved through investment with China. I mean, if they open up manufacturing plants like higher did or others that are coming to the U.S. for white goods and so forth, that means new jobs for American citizens to work for new investments. And American companies are leaving for cheaper areas like Mexico, Vietnam, China, and so forth. So given the brand of Trump and looking at the top leadership of the Apollo Bureau of China right now, what would they be thinking about the arrival of Trump as leader of the United States? Visiting China. Good. I think you've got some key comments here, Ray. And I think looking from a Chinese perspective, and they're looking at Donald Trump, he seems to be kind of like a Xi Jinping. A little powerful. He's got his opinion, and he's going to protect the local economy. Same thing. So I think there's a lot of respect for that. You have to say that from first thing is there's respect. Okay. Second thing is China during this period is focusing on domestic innovation, domestic companies moving up the value chain. Domestic companies go in broad investing to acquire technology, know how to manage processes, and so that will come back to China and help China grow. To some extent, it's kind of a mirror of what Americans will have to do. But there is a segment in American business society where a lot of companies that have come to China have moved out to Southeast Asia. Vietnam, Singapore, India, Indonesia, Malaysia now look in India only because the labor costs have gone up too high. So I think it's not really companies not investing in China because they've moved a lot of our moved out into these areas. So I think that there will be a concern in the American business part of society, you know, how Trump is going to change things, whether it be a new legislation, which will penalize companies for setting jobs abroad. So I think the concern is more in the business community. As for the Chinese, I think that this is an opportunity for them, actually, because I'm sure that Trump and the American people are welcome to invest from China to put lots of money. Did you join Ted's in the US? They get something out of it. And we get the money so we can rebuild the factories. You know, we just cannot build factories with government money. We need a lot of FBI for direct investment in the US. And I see that as probably something that Donald Trump would say, yes, that's what we want. And that's important. So I see that that may be a welcoming attitude for Chinese companies. Also, we have to realize that the Chinese companies, to hedge on the economy, Remini has weakened. So coming to America, putting that Remini through joint ventures or acquiring US companies, that Remini will not devalue. It's in US dollars. So again, there's an advantage to Chinese companies coming to America. So it's a win-win streak. So we both benefit from it. So you seem optimistic that they won't, you know, the terrifying scenario of a trade war, of tariffs being declared by the United States and then China retaliating against the US. You don't see that happening. You see a calmness, a equality of thinking almost about each other's economies. And I think there's a realization that I think perhaps Donald Trump is, I will have to, you know, say that he's going to have to look at it. He's the president. And there's enough, I think, in the US people who will guide him and say, you know, we should welcome this. We shouldn't have a trade war. And there's a lot of reason why I know that there's a discussion about Donald Trump, Trump about changing NAFTA. But again, NAFTA gives jobs on the Mexico side of the border so that it's so that people from Mexico won't come across the border and into the US. So again, I think he has to look at all these issues. I think that now that he's president or president-elect that he will have to study these issues, which he did not have that opportunity prior to the elections. Well, we're going to come back in a couple of minutes and even go deeper into the results of the last big presidential election in the US. Let us at Think Tech of Hawaii. Our show is Asia in Reveal. Our next program is on November 17. This is Johnson Choi, your host. Aloha. My name is Danelia, D-A-N-E-L-I-A. And I'm the other half of the duo, John Newman. Welcome. We are co-hosts of a show called Keys to Success, which is live on the Think Tech live network series weekly on Thursdays at 11 a.m. We're looking forward to seeing you then. Aloha. Hey, everybody. My name is David Chang, and I'm the new host of a new show, The Art of Thinking Smart. I'm really excited to be able to share with you secrets on giving yourself the smart edge in life. We're going to have awesome guests and great mentors of mine from the political, military, business, nonprofit. You name it. So it's something for everybody. We are back talking about a momentous historic election from last week and taking advantage of Russell Lee's visit to Beijing. And he's in a little coffee shop in a huge mall, part of a complex housing hundreds and hundreds of foreign enterprises trying to sell to the economy of China. And we're talking about the impact of the election. Of course, the American economy, the Chinese economy, the Japanese economy all moving forward, progressing along, and not missing a beat in terms of selling and buying here. And we're talking about how the leadership of China looks at this. And why don't we take a step backwards here? And Russell, give us a summary of what's happening in China, the economy right now. Some people say it's cooling off. Some people say it's, well, it's a ship that is riding its course and it's better now. There's, of course, a rising middle class, but they're not buying as much as people thought in terms of consumer goods. The real estate bubble, is there a bubble or is that not affected? And of course, exports. So give us a snapshot of the economy in China today. Okay, Ray, I think it's true that the remedy has weakened here. And I think that it's not a bad sign. The GDP is still seven or eight percent annually. So that's actually good compared to the U.S. and other places. I think what we're seeing is not it's slowing down, but it's a transition stage. China, the labor cost has risen in the last few years. Things have gotten more expensive, but it's a ship that has to ride itself in the waters. And it's because they're transitioning to move the Chinese companies up the value chain so that high technology, innovation, or things will spur it on. And there'll be creation, more stabilization of the domestic market. The domestic market here, the competitors are very key. For example, bottled water, there's over a dozen brands of water. That's really competitive. So I think that we are seeing much more sophistication in Chinese market. We are seeing a lot of global companies come here, international retailers. For example, Alan Edmonds, a very American brand, and they're doing really well here. So we're seeing a lot of American products coming here we're not seeing otherwise. We're seeing that it is not an economy decline, but it's still a robust economy that it's still maturing and it's a ship that's riding itself. Let's take one consumer item that's kind of big and it's a big investment, cars. What is the car market today in China? Is it when you take a pie chart, what percentage are American, German, French, Japanese, other? What's the percentage right now? Well, I can't give you a specific percentage, but I think that most of the cars that the everyday Chinese drives is not a Changan or a Geely. It's more of a BMW, Mercedes, Volkswagen, Lexus, and it's more of the foreign brand. So I'd say a major part of the market, cars are all foreign cars. And you've got to understand the culture, a face thing. People here have great face. Or in other words, people respect you if you have a foreign car, a nice foreign car. Audi, for example, used to be the choice the government officially used. The big Audi's for the black tinted windows. But we're seeing all kinds of cars, landrovers. We are seeing people who are paying a lot of money for cars. The cars, typically, if you were to spend 80,000 for BMW in the US, you'd probably double that easily. So there is a market for emerging middle class, but this market is brand conscious. They're thinking about how they look to the next door neighbor, to their boss. I mean, they're brand conscious. So you're saying that in this very hot market, American exporters have to be really aware of the Chinese focus on brands. That's correct. And I think Ray, getting back to the Japanese mindset in the 80s, 90s, everything's brand conscious. So it's the same here. And it's because of the cultural system, values, face, it's important. And you look successful in a Mercedes as opposed to driving a small car. I think in the US, right now, one of the hottest cars is the hybrid cars, right? And the economy hybrid cars. But in China, if a Chinese client came to me and said, why, I kind of lose face. I got to get a big car. I've got to get a Ming Pai, Ming Pai, a brand name. In fact, somebody wants to come to white and I'm toying with an issue. I guess I got to rent a car or something, a black, large car Mercedes. I got to ask one of my friends, can I borrow your car? They are much more brand conscious. So there is a market out there. There are American companies going out there. You think that Trump in the future will be leading delegations to Beijing, Shanghai, all over Shenzhen, all over the place to be a promoter of American business and sales of all kinds of products in China? Well, I think you might take a look out of the Chinese way. Come to the US and promote their products. I think the big thing that Donald Trump needs to do, and I think he sees it, is rebuilding the infrastructure in the US, which has been a priority of the Chinese that creates jobs locally. It's putting money back in the economy. You need that much neglected infrastructure throughout the US. But he has to do it carefully because that's a state issue. Part federal because the federal government does subsidize transportation systems. There is a clear comparison with China that has been spending hundreds of billion dollars in the last 23 years in infrastructure, roads, bridges, ports, airports, you name it. I mean, it's been huge there. That's why there's a new airport in every province in China. And the roads are, I believe, going to rail, into Lhasa, to highways, going into Inner Mongolia. It's been huge. I mean, that has been a driver of the Chinese economy also with exports, which is internal infrastructure building. And there's a comparison with China that Trump is looking at that as a major catalyst for the economy for the United States. So there are comparisons for this. But moving to Hawaii, local, due to Trump's victory, do you see Chinese more tourism to Hawaii because of this and more investment to the US, more curiosity to find out what Trump's New America is going to be all about? Well, definitely, you see how a lot of Chinese are going to bring the cameras and take a picture of the Trump hotel in Maikiki. That's a definite plus. I was here. In terms of Hawaii, tourism, Chinese tourism, I think it's still developing. And I think, again, it would be great to have more Chinese investors who will buy into the tourism industry and who will then be able to track more Chinese tourists. And from what the situation is, there really isn't a lot of real estate open available for the Chinese to buy in the tourism infrastructure. I mean, it's great to hear that China Oceanwide is going to build an Atlantis in the Kapolei, that area. And it's going to be good. It's going to upgrade our infrastructure. It's going to give us a new brand of tourism, international tourism. But again, from my understanding, there isn't a lot to develop. So that might be a little roadblock there in terms of the Chinese tourism that we want to come to Hawaii. But with Trump's victory, I would think that Trump would like the Chinese to come and bring their renminbi to the US and spend money and buy things. That's right. Well, they're the best investors because when they come in tourism, they leave their money back in the US. Period. And they go back out again. And it's very interesting because the Chinese are shoppers. I mean, they go out and they spend money because there's a vacuum. A lot of things here, the tax, there's a government tax on many things. So luxury brands means that, hey, if I go to US, everything's cheap, right? It's not twice the amount of costs that we pay back in China. And I think it's similar to what the Japan tourism in the 80s and 90s, your Louis Vuitton bank, it's cheaper here. So of course you come to the US to buy it. Well, it seems like there's been a lot of talk before the elections about Trump and China and the rest of the world. But I think we have to wait and take a wait and see attitude here because I think Trump really wants to create new jobs in the US. And that's one of his promises to the heartland of the United States. And one way to do it is by foreign investors coming in with direct foreign investor FDI, DFI to the heartland and building new businesses and plants and employing US citizens. And I think that's a key assumption that the leaders of China must be thinking about also how to get their companies out to the US so they become very American in selling products to the American consumer. Yes. And I think that's a good point, Ray. I used to be associated with a very large Midwest law firm. And the middle of America, Ohio, all this earth, that's actually the marketing and distribution center of America. And in the early 80s and 90s, Japanese investors came in. They bought this supply chain, automobile supply chain. And again, that meant money, jobs created. But I think what the Chinese coming, they've been coming for, they've been actually going to Detroit, all these places for a while. They haven't had the so-called human resource to be able to implement a business in the US. However, that's changing. Quarter million of Chinese students for the last 10 years have been coming to the US to study business, to study liberal arts, to study at the US colleges. So we're seeing a situation where they will have that human resource who understand the culture of the US, who have lived in the US, who speak the language. So I think that's going to be something important to look at. And if Trump goes in that direction to attract more Chinese investment and also noting that you have Chinese human resource who are studying the US, who understand the culture, that may be a smooth transition for Chinese companies to put a lot of money in the US. So we're at the end of the show, but I think you're ending in a very optimistic note that there will be a sea change in relationships of better opportunities through Chinese students who have studied at American universities and made a bridge to increase business between both sides. Thank you very much. Russell, see you later. Thank you very much.