12/01/2010 04:07 pm ET Updated May 25, 2011

Spend, Baby, Spend to Create Jobs, Jobs, Jobs!e

The solution to the complex challenge of rebalancing China's trade surplus and massive foreign currency reserves can be summarized in three simple words: "Spend, Baby, Spend!" Only this time, it must be the Chinese who are spending, and the US that is selling. And all that Chinese spending can result in "Jobs, Jobs, Jobs!" for the US.

Larry Summers recently stated that the US relationship with China "will be the central American challenge going forward." He is correct, but as a Chinese American specializing in cross-border business with both countries, I would urge my fellow Americans to discover the tremendous opportunity in this challenge.

Simply stated, the insatiable American consumer demand for low cost goods has led to a steady stream of imports from China, and steady outbound flow of US dollars to China. Conversely, the Chinese penchant for saving, combined with its still emerging consumer market, has limited Chinese demand for US exports.

China has the largest concentration of foreign currency reserves in the world today. And, China is rapidly becoming the biggest consumer market the world has ever seen.

Through careful planning and a rejection of growing US protectionist sentiment, we can finesse the current situation to our advantage so that China becomes a powerful engine for American job creation. The US needs to orchestrate a homecoming for the return of US dollars while simultaneously working to increase jobs for American workers.

Over the past 30 years, China has generally welcomed foreign investment. The Chinese government, however, has implemented policies that direct such investment to where it will provide maximum benefit. America needs to borrow this page from the Chinese playbook as we look to revitalize our own economy.

The world order has shifted and China now looks to open its vast holding of foreign reserves to global investment opportunities. This can be beneficial for both countries and the world at large. US policy should welcome this role reversal, which will result in a transfer of US dollars home from China and help recapitalize the American economy. And, just as Chinese policy has directed foreign investment where most needed, US policy can continue to recognize and accommodate concerns about national security and control of key domestic industries, but must do so in a responsible and rational manner.

Historically, the US has welcomed foreign investment. Recently, however, select members of Congress, backed by special interest groups, have discouraged Chinese investment. Fifty members of Congress recently objected to a modest Chinese investment in a Mississippi steel company on the grounds that it would threaten national security and result in a loss of American jobs. It is difficult to imagine how the manufacture of steel rods to strengthen concrete creates a national security concern. Xenophobia about China and the deliberate effort to instill fear in the American public has led to toleration of absurd arguments.

Approval of foreign investment in the US industrial sector, subject to appropriate government scrutiny, can only lead to increased employment of American workers. We must attract the right Chinese investment for the right industries where synergies can be identified and leveraged to create jobs. The American public will gradually recognize the impact such investment can have on job creation and the revitalization of our economy. As Americans, we should not fear Chinese investment, but welcome it.

China's rapidly expanding middle class consumer market represents another area of great opportunity for America. The Chinese covet American brands. Forward-thinking companies such as McDonalds and KFC offer a tantalizing preview of how the purchasing power of millions of eager Chinese consumers can increase American corporate profits. Earnings derived from American operations in China, once a mere footnote on financial statements, are now often a material component of corporate global profits. The vast, untapped Chinese consumer market is, quite literally, the new frontier for American business.

Despite the potential of its consumer market, significant challenges will prevent an overnight transition to a consumer driven Chinese economy. Geographical considerations, the lack of modern logistics and distribution systems, little experience in standardization to foster scalability, and the rural/urban income disparity combine to make China the single greatest marketing challenge of all time.

American marketers are second to none at enticing shoppers into opening their wallets. In 1929, the American marketer Bruce Barton said, "The American conception of advertising is to arouse desires and stimulate wants, to make people dissatisfied with the old and out-of-date and by constant iteration to send them out to work harder to get the latest model -- whether that model be an icebox or a rug or a new home." The stimulation of the Chinese consumer will trigger the next great Chinese economic transformation in proportions that are almost unfathomable.

Notwithstanding its new position on the global stage, China remains an emerging market. Social services in general are far weaker than what is needed and dissatisfaction with the pace of modernization, economic reform, and rampant corruption continue to provide a subtext to the government's policy-making activities. With the world's largest population, China must be careful not to reward the privileged few at the expense of the larger population. It is imperative to focus on the needs of an ever-expanding middle class as the US has done over the past 50 years with substantial success.

The US remains a world leader and example of free enterprise entrepreneurship and is best positioned to prosper from this once in a thousand years opportunity. By lending our know-how and time-tested ingenuity, we can help China along the path to a self-sustaining, ever-expanding domestic consumer economy. America must welcome Chinese investment and partner with the Chinese abroad. In short, "Spend, Baby, Spend!" there, can only lead to "Job, Jobs, Jobs!" here at home.