Under Secretary of Commerce For International Trade Francisco SÁnchez
U.S.-China Business Forum
Wednesday, January 19, 2011
As prepared for delivery
Thank you, Erin for your gracious introduction.
As President Hu and President Obama meet at the White House to discuss bilateral and global challenges, I am pleased to participate in this event. It is an honor to speak at the gathering of such business and governmental leaders from our two nations.
Please allow me to start off by thanking the U.S.-China Business Council and the China Council for the Promotion of International Trade for hosting this public forum. I am grateful for the opportunity to be here today.
I would also like to take this opportunity to welcome back to Washington my friend and counterpart at China’s Ministry of Commerce, Vice Minister Wang Chao. I have had the distinct pleasure of working closely with Vice Minister Wang since his appointment last August. He brings to the job an extensive knowledge of the U.S.-China bilateral trade relationship, and I hold his professionalism in high regard.
Vice Minister Wang has been very busy – leading a distinguished Chinese private sector delegation to a number of American cities. This delegation is interested in increasing both trade and investment in America. They have visited a number of important commercial centers in the United States and have signed a number of contracts. It is in this way – city-to-city, company-to-company and transaction-to-transaction - that we build a solid foundation for the U.S.-China bilateral commercial relationship. Vice Minister, thank you for bringing this distinguished delegation to our shores.
We warmly welcome all of our Chinese visitors.
In an arc of progress seldom seen in the history of humankind, the Chinese people have rocketed into this century with a fury of accomplishment that has brought China to the forefront of nations. China has a long and glorious history, and that history seems to be moving especially rapidly over the last several decades. I have been to China four times in the last sixteen months, and each time I am impressed by the pace of change there. China has experienced 10 percent or more growth on average for 30 years. We welcome China’s dynamic economic growth and prosperity. We welcome the emergence of a large middle class in China and the consequent growth in domestic consumption, greater openness and the development of a more sophisticated service industry.
The American and Chinese economies are now the two largest in the world, and our discussions on global commerce do have consequence. Our countries exist in a constantly changing world, and we must adjust to the forces of change. As the world changes, we both need to adapt our policies in a manner that fosters economic development and regional economic integration.
This begs for our mutual cooperation and for the speedy resolution to potential areas of conflict that could affect the larger relationships between our two countries.
A few weeks ago, Commerce Secretary Gary Locke and U.S. Trade Representative Ambassador Kirk welcomed Vice Premier Wang Qishan and other leading Chinese officials for the 21st Joint Commission on Commerce and Trade.
Each year, the JCCT meets to pick up the mantle of the concerns of both the American and the Chinese business communities. Our negotiations are generally divided equally between discussing the concerns of either side. I am proud to lead these discussions with Vice Minister Wang, at the Vice Ministerial level.
The United States has a number of concerns that were addressed at the JCCT. These would include indigenous innovation policies, protection and enforcement of intellectual property rights, government procurement, standards and a number of other sector-specific issues.
Regarding indigenous innovation, we support China’s interest in becoming a society that relies on innovation for more of its economic growth and prosperity. But, we feel that innovation policies need to be carefully crafted so that they help to increase global integration and international trade in goods and services, rather than favor the intellectual property or products of domestic producers. The best products from around the world should compete freely in the Chinese market. Some American companies have expressed concerns about some of China’s policies to increase innovation, and the Chinese side took steps at the JCCT to address some of these issues.
Also, at the December JCCT, we made some progress on the protection and enforcement of intellectual property rights. China made a number of commitments in this area, and we look forward to quick implementation of these new policies – which will provide many benefits to American software companies, media firms and trademark owners.
Improvements in the implementation of Chinese IPR law will not only go a long way to attract foreign investment, it will help China to strengthen its domestic innovation. Chinese artists, scientists and engineers need effective IP protection to enjoy the fruits of their labor and mitigate the risks of investing in research and development.
Government procurement is another area where the Chinese government is taking steps toward establishing a firm foundation for the future. At the December JCCT, the Chinese government committed to submitting a revised offer to begin the process to enter the WTO Government Procurement Agreement. In its revised bid, it will consult with the Provinces. Given that China’s government procurement market is more than $88 billion a year, this is a big advance for all parties.
Similarly, the United States and China agreed at the December JCCT to step-up cooperation on the development of industrial standards – especially in the case of new or emerging technologies, such as smart grid. We look forward to increasing our cooperation on the subject of standards in the months and years ahead.
Let me also say a word about investment. To date, the bilateral investment portfolio is heavily weighted in favor of the United States. American companies have invested an estimated 50 billion dollars in China, and Chinese companies have invested less than 10 percent of that in the United States. This will change.
While U.S. companies will continue to invest in China, Chinese companies will probably dramatically increase their investments in the United States over the months and years ahead. We welcome Chinese investment in the United States. We want our Chinese friends and colleagues to know that the United States has the world’s most transparent, safe and dynamic business environment. At the same time, the United States is intensely competitive in every way.
On a more practical level, Invest in America, a program within the International Trade Administration of the U.S. Department of Commerce, stands ready to assist Chinese companies that seek to learn more about how to invest in the United States.
The U.S.-China commercial relationship is complex and evolving quickly. Both governments are anxious to listen to their own business communities to understand their needs. Fortunately, the needs of Chinese business and the needs of American business are usually complementary. Both sides want to expand commerce in a transparent, predictable and open manner.
When the Chinese and U.S. governments come together to discuss our respective trade and commercial policies, we are greatly informed by the businesses and trade associations which we seek to represent. We especially appreciate the efforts of the U.S.-China Business Council and the China Council for the Promotion of International Trade for your tireless efforts to expand the bilateral relationship in a manner that will benefit all of our peoples.
When we speak of fair trade, when we speak of the protection of intellectual property, when we speak of unfair dumping, what we are really speaking is how we can fully capitalize on the intelligence, creativity and ability of our two peoples to progress quickly to the next level of human development, taking the world with us.
This audience has the ability to affect the very trajectory not only of any particular economic interest represented here this morning but the history of humankind itself. It is an exciting time for us to work together and it should be a personal privilege for all of us to have an opportunity to undertake such important work.
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