Is China's Slowing Growth Good for U.S. Companies?

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July 19 (Bloomberg) -- Michael Spence of New York University and John Sculley, former Apple CEO and partner at Sculley Brothers, talks about slowing growth in China and why it turns out to be a good things for U.S. companies. They speak on Bloomberg Television's "Bloomberg Surveillance."

Oh, there's definitely a slow down.

No question.

It's coming from the export sector and it's caused, the primary cause would be europe because of the negative growth, zero to negative growth in europe.

The good news is the chinese authorities have decided that they're serious about making the structural change in the growth pattern, and they're going to let it happen.

I wouldn't be surprised if growth went down to 7%. if most people think that's bad, i think it's good news.

Why is it good news?

It's good news because they don't do something stupid like overlever the economy or overinvest.

Is it good news for companies like g.e. operating in china to go to a consumer led model?

Oh yeah.

The projections are that the 230 million will go to 630 million consumers, that's a mammoth business opportunity for multinational companies including -- including apple john scully and this has been a big push.

Been a very hot growth area if you look at a chinese slow down right now and you're the c.e.o. of apple do you invest more in the united states or do you keep going into the emerging story?

I think it's pretty saturated about 70% penetration and you see programs now with at&t and t-mobile saying we'll let you refresh your smartphone every year, that this is not a high growth market.

If you go to china it's a totally different price point, so that emerging middle class that mike suspense talks about isn't willing to pay $800 for an unsubsidized phone.

They don't subsidize phones over here.

Means apple will have to think about very different entry point if it wants to grow at the rate of samsung and others.

John, let me start with you on this question.

If you're a multinational, do you project from a base in the united states, or do you have to put the whole project, trans nationally over to china, or over to australia, or over to south africa?

I mean, when you deploy leadership assets, you really got to move the whole thing over there, don't you?

Well, i think the observation i would make is that multinational companies really don't think about being a u.s. company.

They think about having resources and choices all over the world.

If they can do their research and development outside the u.s. in a more effective way they will.

Michael suspense, you are known as an authority on this issue, you call on corporate leaders worldwide.

What are you hearing from those leaders?

What are the questions they're asking you?

Well, they're obviously interested in where there's sustainable growth going on and where there's trouble brewing.

But what i hear is what john is saying, and that is that they find human talent that's accessible all over the world.

So you find multiple location, r & d facilities, multinational companies and so on.

Quite interesting.

The other company we're waiting to hear reports from is honeywell.

David cote, when he took over, there was a lot of infighting.

But using a lot of the lessons he learned from g.e., he adopted these conservative accounting methods.

John scully, when you think about corporate leadership and what david cote has accomplished, is thinking small and really digging into the details a way to get to a bigger vision, to bring together an industrial giant like honeywell?

Well, i think he's done a superb job.

He obviously was trained in the jack welch school of business, and he brought those skills with him when he went to honeywell.

You see those same things being applied at g.e. today.

They're restructuring themselves -- yet the company's not doing as well.

Improving its performance in the manufacturing sector.

When i look at this.

And i know this is something you've written a lot about, i kid you about it.

Is it important what a corporate officer does, or for that matter, what we do, is it more important what we do not do?

This idea of the genius corporate decision is not saying go do that, wait, we don't want to choose to do that.

Which is more important?

I guess, tom, they're both pretty important.

You would balance them?

I would balance them.

What i see in companies that do very well, i see also in countries.

They put economic stuff in the right place.

Right?

When eastern europe comes along, the german companies move the right things to eastern europe around keep the right things in germany.

It's an enormously important skill.

And then they bring that to the immediacy, what did detroit not do?

They became a one company town, and the company moved out to the suburbs.

That's exactly right.

And this, i'm sorry to repeat myself -- that's ok, it's surveillance, and it's friday.

Ok.

this does require government business, the educational institutions to come together and build a vision around what the next economic -- what the next detroit looks like.

Michael suspense, john scully with us on g.e., honeywell, detroit.

This text has been automatically generated. It may not be 100% accurate.

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