Notes from Tianjin: The US in the "Pacific Century

This last week, I attended the "Summer Davos" meetings of the World Economic Forum in Tianjin, China, as part of a two-week trade mission by the Los Angeles Economic Development Corporation, which I chair this year. The "Davos" crowd of name-brand global execs, and a somewhat-self-selected group of government, NGO and academic thought-leaders, is augmented for their summer meetings by an additional group of emerging nation and emerging industry representatives. This year's implicit theme was sustainability, so alternative energy efforts took a front seat. The 2008-09 market and bank crashes are still fresh, though, so they also take up a large share of agenda time.

As an originally-European (Swiss) and China-hosted event, it featured more than a few sessions dedicated to how, and whether, the U.S. is declining. There were some interesting lessons from the conversations there; the Davos group rules permit attribution sometimes but not others.

One recurring theme was that the U.S. lost respect and economic influence in the global community by letting the 2008 crash happen, and by not yet showing decisive move to repair the damage. While I heard less than might be fair about the simultaneous, and equally grave, systemic bank failures in Europe, I don't think that assessment's unfair. The American government did not and still does not look like it has clear command of financial institutions or their macroeconomic effects, nor a clear vision of how to make this better.

There's a lot of expectation here that China will "step up", but it's clear that this very large economy is still struggling with its own internal growth and wealth distribution issues. While any statement like this is widely simplistic, there was a general sense of the Davos crowd, in the sessions I joined. A broad cross section of experts felt that both nations have failed to provide compelling political or economic leadership to the world; and that in both cases, this mostly is due to the national governments seemingly too mired in internal problems without clear direction, goals and transparency.  

Of course, if that's right, the flip side is an optimistic message.  If we fix our problems at home, we can regain thought leadership within international companies and the global economy as well.