The US economy, starting with Hollywood and education, needs China to build back better

Continued trade with China will be crucial to the US’ economic recovery. Saving jobs in Hollywood and US universities, for example, depends on maintaining strong ties

Dominic Ng

Published: 1:30am, 13 May 2021

Why you can trust SCMP

Just over one year ago, the US stood at the edge of an unprecedented public health and economic crisis. Though the human costs of this tragedy have been immeasurable, America is now on the verge of overcoming this ordeal.

The recovery thus far is a testament to our ability to innovate and adapt in the face of adversity. But it also speaks to the value of openness. Personal protective equipment imported from China helped medical workers respond to the crisis, as imports of surgical and N95 masks from China increased over fivefold in 2020 to meet urgent demand in the US.

When offices faced lockdown, it was imports of electronics and other work-from-home gear from China that helped Americans stay productive despite tremendous disruption.

Although the US is recovering from the pandemic, there is still a long way to go. Unemployment is significantly down from its peak one year ago, but 4 million more Americans are unemployed today than in February 2020. Just as openness to trade with China helped the US weather the pandemic last year, continued trade with China will be crucial to building back the American economy.

Take the entertainment industry. In 2019, US films accounted for 30 per cent of China’s US$9.2 billion in box office sales. Big Hollywood hits can bring in hundreds of millions of dollars from Chinese film-goers. The Fate of the Furious , released in 2017, made over US$390 million from China alone – almost one-third of its global gross.

01:53

China breaks box office record thanks to filmgoers during Lunar New Year

These cultural exports support American jobs, but these jobs are at risk due to the pandemic. In March 2020, the motion picture and sound recording industries directly employed 430,000 people, according to US labour statistics.

But, in the past year, employment in these industries has fallen nearly 40 per cent due to Covid-19. Bringing back these jobs requires maintaining strong commercial ties with China and encouraging even greater openness to US films.

Just as the film industry benefits from exports to China, so the education sector benefits from a welcoming stance towards Chinese students. During the 2019-2020 school year, 35 per cent of international students in the US came from China.

Biden should go back to basics in US relationship with China

Altogether, these students contributed US$12.5 billion to the US economy in 2018. Though the US imports more than it exports to China in the aggregate, education is a sector where the US shines, resulting in a US$280 million trade surplus in education services with China.

These educational exports support over 3 million people employed in colleges, universities and professional schools in the United States. But Covid-19 is expected to put a significant strain on schools. Undergraduate enrolment fell 4 per cent last year, according to Fitch, and revenues are expected to decline in 2021.

Graduates wave Chinese flags during a commencement ceremony at Columbia University in New York in 2018. Education is one sector in which the US runs a trade surplus with China. Photo: Xinhua

Staying open to Chinese students who want to learn in the US is an important step towards preserving American jobs in the education sector.

Bringing international students back to the US requires more than just reopening borders after the pandemic ends. It also means addressing systemic anti-Asian racism in America. Foreign students will not return if they feel unsafe.

Nor can the US truly recover until Asian-American communities are assured of their safety. The anti-Asian and anti-Chinese rhetoric that has erupted in the past year cannot be met with silence.

This also matters with regard to how America presents itself to the world. Entertainment and education have more in common than just being crucial to US jobs and the economy. These sectors are also conduits for spreading American values abroad. Our leadership in these industries is a tremendous advantage, but only when we stand by our principles.

With the recovery moving forward, we can now reflect on how we got here and what to do next. The US navigated the first year of the pandemic in part by preserving commercial ties with China, despite our differences. Building back after the pandemic will require a continued willingness to engage and a reaffirmation of the values that make us who we are.

Dominic Ng is chairman and chief executive officer of East West Bank