Under Secretary of Commerce For International Trade Francisco SÁnchez
The Joint U.S. Chamber and China Council for the Promotion of International Trade Breakfast
Thursday, January 20, 2011
As prepared for delivery
I am delighted to be here this morning, and I would like to welcome all of our friends from China. Good morning to you and to our host, the U.S. Chamber of Commerce, which has played a critical role in strengthening commercial bonds between the United States and China.
I am delighted that the vice president of the China Council for the Promotion of International Trade, Mr. Yu Ping, is here. We were together yesterday at the opening of the US-China Business Forum. It is good to see you again, sir.
Ours is a commercial relationship that has offered tremendous benefits to both the American and Chinese people. For much of the last few decades, American consumers got an impressive array of low-cost goods. And in its transition into one of the world’s top exporters, China was able to lift millions of its citizens into a fast-growing middle class.
But this approach of China largely producing and the US largely consuming is not sustainable. Developed-country consumers in places like the United States are tapped out, and China is beginning to understand there are limits to purely export- driven growth. So it is critical for us to build a more equitable commercial relationship.
One key part of that rebalancing will of course be increasing American exports to China. That is a major priority under President Obama's National Export Initiative, which aims to double American exports by 2015.
But equally important to building a more equitable U.S. China trade relationship will be adjusting the vast discrepancy between foreign direct investment that exists between our countries.
The total U.S. stock of FDI invested in China totaled almost $50 billion in 2009; the total stock of Chinese FDI in the United States, the world’s largest destination for FDI, equaled less than $1 billion that same year.
Recent decisions by the Chinese government on capital control reforms and increased interest by Chinese companies to expand their operations into foreign markets are expected to lead to increased Chinese outbound FDI in the coming years.
Chinese companies looking for investment opportunities are here in America this week. As party of President Hu’s trip, leaders and business representatives from China representing a wide spectrum of industries are meeting with U.S. exporters and exploring trade and investment opportunities in several U.S. cities, including Chicago; Houston; Raleigh; Boston; Frankfort, Kentucky; Franklin Lake, New Jersey; Indianapolis; Los Angeles; Memphis; Minneapolis; New York; and Washington, D.C.
The missions are opportunities for U.S. companies to showcase their products and services, and they offer cities and states the time to promote themselves as a destination for Chinese foreign direct investment, which is expected to increase significantly in the coming years.
Chinese companies looking to invest in the United States will find an open commercial environment unparalleled anywhere in the world. Many Chinese companies already operate here successfully. They have come here because they know the U.S. has fully transparent laws and standards that safeguard profits, intellectual property and, above all, a free and open market.
No state, no city, no region is closed to investment. Chinese investors, too, should know that the American economy is coming back and that the United States is beginning to think about how to reform its fiscal situation that will in the years to come abet further economic growth.
Time and time again, the American economy has bounced back from recession and depression. And it is doing so again. America is one of the most rewarding places to invest. We continue to rank at or near the top of global benchmarks for ease of doing business, and our workforce is one of the most educated and highly skilled in the world.
The U.S. market is open to new products, ideas, and innovations, and our intellectual property-rights regime rewards technological innovation as well as research and development. We have a very sophisticated marketplace with intense competition, and ultimately companies’ success depends on the quality and cost of their goods and services.
The bottom line is that foreign firms are welcome to participate in our economy. They are offered equal treatment free from discriminatory barriers when they do business in America. Chinese companies in many different sectors, including renewable energy, telecommunications and industrial equipment, have realized significant success after locating operations in the United States.
We have welcomed Chinese firms, continue to wish them well, and heartily hope that other Chinese companies will see their success and follow them to the United States.
For Chinese firms and investors who might need additional information on investing here in the United States, Invest in America is a program within the Department of Commerce that complements the efforts of individual states to promote foreign direct investment in the United States.
The program organizes outreach to foreign governments and international investors; serves as ombudsman for international investors on issues involving federal agencies; answers foreign investors’ inquiries; and advises on policies that may affect United States competitiveness in attracting foreign investment. It is also a source of information for members of this organization that has hosted us this morning.
I have always enjoyed the nuance of the name Invest in America. It encourages investors to look at the largest economy in the world for investment opportunities that can be highly rewarding. But the name Invest in America also reminds us of the essential role the America economy plays in the world.
The United States will continue to embrace this leadership role in the 21st century, even as we adjust to a global economy that is growing more interdependent every day.
We are ready to work with investors who see the value of the opportunities we believe will be available for years to come.
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