This year Fort Hays State University and Sias International University in Xinzheng (pronounced shinJUNG), China, celebrate the 10th anniversary of signing the agreement to offer dual Chinese-U.S. degrees at Sias. FHSU President Edward H. Hammond is scheduled to deliver the following address at Sias on May 30. It was submitted to statewide newspapers as an op/ed or guest columnist piece.
The Paramount Partnership
For many years I have heard of a Chinese curse that "we live in interesting times." In my research I found this saying was really first reported in Robert F. Kennedy’s speech in Cape Town, Africa, in June of 1966. Regardless of its origin, the statement is true. We do live in very interesting times.
Good relationships and partnerships that exist between China and the United States and Kansas and Henan Province are not long in the scope of Chinese history but are very important. The United States has been living better off than we should. Our total consumption is greater than our total production.
China, on the other hand, has been living far worse than it could. China consumes only half of what it produces. As a result China was saving U.S. consumers more than $100 billion in creating 4 million new U.S. jobs a year prior to the economic downturn. China was also heavily investing in the United States. In 1996, China’s investment passed $1 billion. By 2008, China had invested over $1.4 trillion of its $1.95 trillion of world investment in the United States.
Meanwhile the United States was heavily investing in China. Since 1995 the United States has invested close to $50 billion in China's growth and economic prosperity. The impact of this economic relationship on the United States has been significant. China's stock purchases have propped up our retirement programs and investments. It has also significantly held down interest rates and reduced the need for increased taxes.
The impact of the U.S. investment has been equally important. The growth of the presence of U.S. multinational corporations in China significantly increased the export capacity of the country. At the same time, it has helped China improve the quality of life and standard of living of its citizens.
In his recent publication "The $1.4 Trillion Question," James Fallows summarizes the China-U.S. relationship as "an unofficial and yet mutually beneficial bargain. China will keep creating new jobs and thus reduce its own social tensions and create new opportunities for its rural poor. The Chinese will look better year by year, though not as well as they could. And they will be protected from the risk of potentially catastrophic hyper-inflation."
The United States, in exchange, will encourage the Chinese government to hold much of its nation's wealth in our assets in America, thereby preventing a run on the dollar and shoring up and cementing the relationship between China and America.
As I stated in the beginning, we live in interesting times and our world is changing. The old economic models will not work any longer for China or the United States. Let me explain what I mean. Among the five primary commodities in the world, China has now surpassed the United States in the consumption of all but oil. In the first part of our new century, China has become the leading consumer in grain, meat, coal and steel.
Just think about what will happen in another 20 years or so. By 2030, China will have 1.45 billion citizens and an economy as strong and active as the U.S. economy was before the world economic crisis began.
In 2030, if we use the same utilization and consumption formulas that apply to the 2008 U.S. economy, China will use 99 million barrels of oil when the current world production is at 85 million barrels. China will have around 900 million automobiles and currently there are only 860 million worldwide. China will need an amount of grain equivalent to two-thirds of the world's current production.
As you can see, the likelihood of these things becoming realities is non-existent. That brings us to the importance of the relationship between China, the United States and Kansas. It is clear China is going to need more grain, but its grain harvest has fallen by 34 million tons between 1998 and 2005. China is also going to need more clean water, as the demand for water has tripled in the last 10 years. There is a direct relationship between the availability of clean water and China's ability to produce grain.
The United States currently exports 40 percent of our grain production and Kansas is the leading U.S. exporter of grain. China's need for grain and our ability to produce abundant quantities makes our relationship very important. China also is going to need more oil and gas. Currently China needs about 5 million more barrels of oil per year. Oil is becoming scarce and we know where about 95 percent of all the oil is in the world. Oil prices are being driven by supply and demand. Kansas currently ranks eighth in U.S. oil production, and oil and gas is produced in 89 of our 105 Kansas counties.
China depends heavily on air transportation due to the size of the country. As China opens its airspace to private planes, much like the rest of the world, the role of Kansas is going to become even more important as we are the world's leader in private airplane production.
The key to this relationship and the ability of both our countries to go and prosper is going to be tied to the education and creative energy of our citizens. In the last 10 years, China has opened its doors and asked for more educational partners. Only about 20 percent of China's youth pursue higher education today. The value of having a U.S. degree in China has been significant and has changed the lives of many of its citizens.
Fort Hays State University is very proud to be one of the largest providers of undergraduate higher education in China. In addition, the University of Kansas has the No. 1 ranked Confucius Center in the world. Our history of educational partnership is significant.
Fort Hays State University’s presence in China is based on the dual-degree model, committing Chinese students to have access to both a Chinese degree and an American degree. Currently we have four active partnerships.
The largest partnership, our first partnership, is at Sias University. We also have active partnerships at Shenyang Normal University, the University of International Business and Economics in Beijing, and Tak Ming University in Hong Kong. We also have four developing partnerships at Tianjin University, Hangzhou Normal University, Beijing Normal University Zhuhai Campus and the Northwest University of Politics and Law in Xi'an.
The enrollments in our active partnerships started in Sias with the pilot project in the fall of 2001. By fall of 2005, we were approaching 2,500 students enrolled in our degree programs in China. At that point, working with the Ministry of Education, we evaluated and made some changes in our programs and concentrated on quality and stabilization until fall of 2007. Since that time our programs are again growing and now we are serving around 2,700 students.
The future of our two countries not only depends upon the education and creativity of our citizens, but also on understanding what can come about through these kinds of educational partnerships. The individual student benefits substantially from the degree program. We have over 25 graduates who have very important jobs all over China. The real winners are our two countries. Because now we have developed an understanding and appreciation for our culture and the way we do business. These kinds of partnerships will not only permit us to grow, but permit us to overcome the challenges of a changing economic model and the demands of scarce commodities and resources in the future.
I have a great deal of confidence that together our two countries and our citizens will be able to work together to create a better world for our children and for our countries' futures.
As Secretary of State Hillary Clinton recently said on her February trip to China, "the fact is, China and the United States have conducted many good cooperations and we are ready to continue to talk," and develop new cooperations and ventures that will benefit both of our countries. While there are definitely challenges, our future looks bright and we at Fort Hays State University in the state of Kansas are happy and proud of the role that we can play working side-by-side with Sias in Henan Province.