Secretary Gutierrez Leads Business Development Mission to China
Secretary of Commerce Carlos M. Gutierrez’s recent visit to China saw the signing of several important trade deals with U.S. companies and a renewed push for progress on issues such as the protection of intellectual property rights.
by John Ward
Pressing for progress on a range of bilateral trade issues while witnessing the successful conclusion of deals for several U.S. companies, Secretary of Commerce Carlos M. Gutierrez led a business development mission to the People’s Republic of China this past November. The mission began in Beijing on November 13 and 14, 2006, and ended with a visit to Shanghai from November 15 through 17, 2006.
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Secretary of Commerce Carlos M. Gutierrez speaking at the ambassador's reception in Beijing on November 13 during the business development mission that he led to China.
The business delegation comprised 25 firms that represented a broad cross-section of U.S. industries. In the course of the delegation’s two-city visit, the participants had the opportunity to meet with Chinese government officials, including Chinese Premier Wen Jiabao and Minister of Commerce Bo Xilai, business leaders, and potential business partners.
An Important Commercial Partner
China is now the third-largest trading partner and fourth-largest export market for the United States. U.S. firms export some $50 billion in goods and services to China annually. Since China’s accession to the World Trade Organization in 2001, U.S. exports to China have grown an average of 20 percent a year. With its economy growing near 10 percent a year, China represents an important market for U.S. businesses. Total U.S. exports to China in 2005 were $41.8 billion, an increase of 20.5 percent over 2004. Through July 2006, U.S. exports have grown 35.7 percent over the same period last year.
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Members of the U.S. business development mission to China pose on the steps at Zhongnanhai following meetings with Premier Wen Jiabao and Vice Prime Minister Wu Yi in Beijing on November 13. The Zhongnanhai is a complex of buildings in Beijing, China, which serves as the central headquarters for the government of the People's Republic of China.
“Exporting More, Not Importing Less”
While in Beijing, Gutierrez remarked that one of the goals of the business development mission was to “address challenges and to explore opportunities for commercial partnerships and investment.”
Acknowledging the importance of the current trade imbalance between the two countries, and underlining one of the primary purposes for his visit, Gutierrez said to the press that “the way to narrow the trade deficit is by allowing the United States to export more … and we have to work together to avoid that the solution become ‘import less from China.’”
Aside from closing commercial agreements, one of the means for exporting more is through resolution of policy and commercial challenges that U.S. companies continue to face in the Chinese market, such as intellectual property rights (IPR) protection and enforcement, transparency, and the rule of law.
Intellectual Property Rights Focus of Roundtable
The protection and enforcement of IPR of U.S. firms was one of the key bilateral trade issues under discussion during the visit. According to figures cited by Gutierrez, an estimated 75 percent of the value of publicly traded U.S. companies—about $5 trillion—derives from intangible assets such as brands, copyrights, and patents. But piracy and counterfeiting, according to the National Chamber Foundation, cost U.S. firms $200 billion to $250 billion per year, with more “infringing” goods coming from China than from any other country.
At a roundtable held in Beijing on November 14 to discuss IPR issues, Gutierrez noted that “another victim of widespread [intellectual property] theft in China is American support for expanding our trade relationship.” He expressed the desire that three specific IPR challenges be addressed by China:
- Lowered criminal thresholds for prosecuting those involved in commercial piracy and counterfeiting
- Greater market access for U.S. audiovisual products
- Collaboration with countries that share their factories’ optical disc exemplars with international laboratories so that pirated discs can be traced to their source.
During the roundtable, Gutierrez also announced that the Commerce Department had added a second IPR attaché in Beijing and plans to add an attaché in Guangzhou early next year.
Environmental, Telecommunications Deals Signed
U.S. companies and Chinese buyers signed several contracts during the visit. China Telling Communications of Shenzhen signed an agreement with Motorola for the purchase of 12 million cellular telephone handsets in 2007, a deal valued at some $1.6 billion. Western Water Corporation, a unit of Han’s Technologies Inc., of Oakland, California, signed an agreement with the county government of Xiangshan for work on a major environmental improvement project. Another U.S. firm, Altec, of Birmingham, Alabama, was in discussions with the Shanghai Municipal Electric Power Company.
Next Step: December Economic Dialogue
The just-completed business development mission is but one piece in a continuing series of dialogues, talks, and negotiations that define the commercial and economic relationship between the United States and China. On December 14 and 15, 2006, Gutierrez joins Treasury Secretary Henry M. Paulson Jr. and other U.S. government officials for the inaugural meeting in Beijing of the U.S.–China Strategic Economic Dialogue. President George W. Bush and Chinese President Hu Jintao launched this dialogue in September 2006 as a forum for discussing ways the two countries can work together to ensure that citizens in both countries benefit fairly from the growing bilateral economic relationship.
John Ward is a senior editor in the International Trade Administration’s Office of Public Affairs.