U.S. Ambassador Gary Locke Outlines Initiatives to Strengthen U.S.-China Economic Ties before American Chamber of Commerce in Shanghai
(SHANGHAI) Oct. 17 – U.S. Ambassador Gary Locke outlined initiatives that will strengthen U.S.-China economic ties, increase U.S. exports and ensure the world’s two largest economies contribute toward global economic recovery in a speech to the American Chamber of Commerce in Shanghai on October 13.
“Three years after the financial crisis, the global economy has yet to return to full strength. And too many people back home are still looking for jobs. It’s at times like these when leadership really matters – and as the two largest economies in the world, the United States and China must step up,” said Locke.
Locke laid out three goals for his tenure in Beijing that are designed to match the new directions China is taking in its latest five-year plan. Those goals include:
- Helping to double U.S. exports by providing high-quality products and services of great interest in China,
- Increasing Chinese investment in the U.S. so that both countries prosper, and
- Ensuring U.S. companies compete on a level playing field in China, equivalent to the environment Chinese companies enjoy in the U.S.
The full text of the Ambassador’s remarks as delivered follows below:
U.S. Ambassador to China Gary Locke
to the American Chamber of Commerce in Shanghai
Ritz-Carlton Portman Hotel
October 13, 2011
Thanks very much, Robert, for the introduction, and Brenda, for helping facilitate this breakfast meeting. It’s great to be back and to see a lot of old friends. I’ve been back here, as Robert indicated, on many occasions in a variety of different capacities — as Governor, a private citizen working for one of the law firms that’s here at the Chamber and a member of the Chamber, as Commerce Secretary, and now as United States Ambassador.
I’m wearing a new hat, but my fondness for the city and our friendships have not changed.
First of all I do want to congratulate the Chamber on a very successful door-knock campaign in Washington, D.C. last month. We very much appreciate your support for our efforts to increase U.S. exports, to promote greater understanding of what’s happening here in China with the policymakers in Washington, D.C, and all of your efforts, quite frankly, to help improve the economy of the United States of America and to create more jobs back at home in America.
I also want to note that our Consul General, Robert Griffiths, has been here for just a few months, very much enjoying the great warm reception that you all have given him. Our principal Commercial Officer, Bill Brekke and the entire team at the Consulate here in Shanghai are absolutely committed to a robust, cooperative arrangement and partnership with the Shanghai AmCham. Our goals are the same.
I’m looking forward to returning many more times over the next several months. We’re looking forward to the dinner here in December. But as many of you know, my wife Mona’s parents live here in Shanghai part of the year, so we intend to be down here frequently, bringing the children so that they can spend time with their grandparents, but really, we want to bring the kids along to really explore China so that they get to discover the China of their father’s father.
We in Beijing, of course, always welcome more direct contact with Shanghai AmCham, and we hope that you can visit us in Beijing also whenever possible, to offer your ideas, your perspectives on trade and investment initiatives, and how we can move the China-U.S. relationship forward.
As I said last month in Beijing, the U.S.-China economic and trade relationship is of immense importance to both countries and indeed to the entire world.
Three years after the financial crisis the global economy has yet to return to full strength, and too many people back home are still looking for work. It’s at times like these when leadership really matters. As the two largest economies in the world, the United States and China must step up and provide that leadership. Of course everything that happens here in Shanghai is so critical to the success of the economy of China and to the world economy.
I have to tell you, I remember very very well, still very vividly, we were chatting about this a little bit earlier at the breakfast table, my very first visit to China. It was actually to Shanghai. We came in late in the evening from the airport in 1988. We took a bus in from the airport late at night, the headlights of the vehicles, the bus, were very very dim. I think there was this thought that you could somehow save on the battery if you kept the headlights super low. [Laughter]. Everywhere around us were just millions and millions of bicycles. I remember seeing young men, teenagers and young men with their girlfriends or dates on the handlebars, a lot of parents with their children clinging tightly to their backs. Everywhere we went, bicycles. I was always afraid that the bus was going to hit people on the bicycles.
Shanghai then was an industrial city filled with low-rise buildings, although from our — I think 12-story — hotel we could see all around us all these cranes. I think the story in the headlines at that time was that all the major cranes in the world were in China.
Today’s Shanghai skyline is dotted with more than 400 skyscrapers, some of the most imaginative, breathtaking examples of architecture you can find in the world. The bike paths, the roads that we saw filled with bicycles, have been replaced by elevated freeways, trains, subways, mag-levs, shuttling people and commerce at a very frenetic pace.
Shanghai and the delta region have been at the forefront of an economic transformation of historic proportions and the people here in the Shanghai region, indeed throughout China, have every right to be proud of all that they have accomplished in such a short period of time. Hundreds of millions of people have been lifted out of poverty and into a rising and ever-growing middle class.
So let me reiterate that the United States welcomes this transformation. We welcome a strong and prosperous and successful China that also plays a greater role in world affairs. Because it’s good for the people of China and the United States. It’s good for the global economy. And it’s critical to creating jobs back home in America.
President Obama has made clear that creating more jobs for Americans is the foremost priority of his administration, and more jobs in America and a faster and stronger economic recovery and a strong American economy overall will mean more trade an investment opportunities and stronger economic growth and indeed more jobs for the people of China.
The United States also has an interest in a prosperous China because as more Chinese become members of the middle class the demand for American-made goods will increase. We know that America makes great products and services that are highly valued and in great demand here in China that can also help meet the needs of the Chinese people, whether it’s feeding its people, to environmental services, to technology, to software, to medical devices. The more that American companies can export and sell their products and services to China, the more American companies produce, and the more American companies produce, the more people they need, and that means more jobs for the people back home. These are the win/win opportunities that we seek.
In support of President Obama’s leadership let me just tell you what I’m here to do. We’re going to continue working to meet the goals of the National Export Initiative which seeks to double U.S. exports by 2015, which will create more jobs in the United States and provide more high quality made-in-America products and services which, as I said earlier, are in great demand and highly valued here in China.
We also want to increase Chinese investment in the United States. Now is the time to invest in America. As Chinese companies do so, they will prosper, and at the same time they will create jobs in America.
The third issue we want to focus on is to ensure that U.S. companies can compete on a level playing field here in China and operate in the same open and fair environment that Chinese companies enjoy in America.
You’re all witnesses to the miracle of China’s economic transformation. You all know that China has prospered because it has unleashed the drive and the ingenuity and the talent of its people.
Beginning with the economic reforms under Deng Xiaoping in 1979 and continuing through China joining the WTO in 2001 China has made its economy fairer, freer and more open to international competition. The reforms of course are far from complete, but the key to success is clear. The more China has opened up, the more it has benefitted from the rules-based international trading system established in the post-World War II era.
But it’s a different world now than 30 or even 20 or 10 years ago. Premier Wen Jia Bao has observed that with an over-reliance on low-cost exports the Chinese economy is, these are his words now, that the Chinese economy is “unstable, unbalanced, uncoordinated, and unsustainable”. The need for change is reflected in China’s latest five-year plan with its focus on expanding domestic consumption, reducing energy and carbon intensity, expanding the services sector, and fostering innovation in newly emerging industries.
To be successful we believe that China will need to rely even more on what has made it successful in the past — opening up markets, welcoming foreign participation in the economy, implementing transparent rules and regulations based on accepted international norms. So we look forward to working with China as it works toward its goals and we want to make sure that U.S. companies are full participants and indeed enjoy a level playing field.
In the United States we’re also continuing to refine our policies to improve the long-term sustainability and strength of our economy. President Obama, for instance, has ordered a total reform of our export control system to enhance our national security, strengthening controls on some of our most critical technologies while eliminating unnecessary obstacles to the export of less critical technologies, especially those that are already readily available from around the world. There reforms will make U.S. companies more competitive within a world market and bring to the market in China new and valued U.S. products.
We’re also committed to improving our visa processes. We know that if want to strengthen our commercial relationship with China and create jobs in America we need to make it easier for the Chinese to travel to the United States for business and for leisure.
Actually, foreign visitors to the United States, whether from China or from Europe is considered an export. It’s considered an export because it’s foreign money, foreign transactions, purchases of U.S. goods and services, although the transaction occurs back home in the States. It’s no different than selling that product to someone in Europe or China, it’s just that this is occurring in the United States when they go to a restaurant, when they book a room in a hotel, or they travel.
In fact reducing the wait times to obtain visas to travel to the United States is a top priority for me as an ambassador. I’ve long heard of the concerns that many of you have had in trying to invite business folks from China to visit your operations in the States or to encourage tours in the United States. It was a priority for me as Governor; as Commerce Secretary; it will be a top priority now as Ambassador.
But we actually have done a good job in the last several years of reducing the wait times for visas throughout all of our Consulates and at the Embassy here in China. They’re down substantially, but we can still do better. We want to work with AmCham here in Shanghai to create some new innovative approaches on how to approach these applications for visas.
I want to note that visa applications or processing, adjudications is the term, topped at one million just this last year. For the first time we’ve topped one million. But that’s still a fraction of the potential visitors from China to the United States. It’s estimated that if even one percent of the Chinese wanted to travel to the United States for study, for business or travel we would have to process some 14 million visa applications a year. Right now we’ve just topped one. We’re not going to be able to add or multiply the staff by 14 or build enough facilities to handle that volume. So we’ve got to look at efficiencies, internal processes, and procedures.
We need your help here at Shanghai AmCham.
As President Obama said, our number one priority in the United States is job creation. Over the next year I’m committed to leading five trade and investment missions to China’s emerging cities. We simply cannot wait for the Commerce Department or the Energy Department and other governors and mayors to lead trade missions here to China. There is no reason why the Embassy and the Consulates here can’t initiate these trade missions on our own.
For these missions, our Embassy and Consulates will recruit trade delegations with a focus on specific high growth sectors such as clean and renewable energy, transportation, health care, aviation, information and communication technologies. Our missions will provide U.S. companies, many of you are here today representing those companies, with better access to provincial and local governments and to potential buyers and customers. And needless to say, however, close cooperation with you, the U.S. companies who know how to get things done here, will be key to the success of these efforts.
Let me also mention a bit about our efforts to encourage more Chinese investment in the United States. And you may find that you would like to be part of this as well. Indeed, any sensible international investors should be looking at the United States market where they will find the richest large consumer market in the world, an educated workforce, strong intellectual property protections, and very dynamic capital markets.
Already more than five million Americans are directly employed by foreign companies in the United States ranging from Japanese carmakers to Russia steel plants to Indian energy and industrial companies, to Brazilian juice processors. We’re already welcoming more Chinese companies every day as China’s foreign direct investment in the United States increased by 400 percent between 2008 and 2010.
To help understand the variety of tax structures, tax incentives among the different 50 States, just to inform Chinese companies that we have 50 States with totally different incentives and tax structures, as well as how to navigate multiple federal agencies regarding permits and other requirements.
The White House recently announced a new initiative called Select USA. It’s the first coordinated federal effort to aggressively pursue and win new business investment in the United States while cutting red tape and removing barriers to new investment.
The United States is doing everything it can to open trade and create fair opportunities for all, and to make our investment and our commercial environment as open and as appealing as possible. We’re going to be doing our part to unlock the full potential of the U.S.-China relationship and we look forward to China fully joining us to realize that potential.
But we need to partner with organizations like Shanghai AmCham because we need you to be giving out the stories and relaying the stories about the successful Chinese investment in the United States. For all the misperceptions that there are, there are so many dozens more success stories, not well known. So we at Select USA and at the Embassy and the Consulate and the folks back home, in America want to partner with AmCham, and the private organizations, the private sector, to get the story out about the investment opportunities in the United States. That’s why I note that Brenda and Robert indicated to me that you’re going to be creating a special program for small and medium sized enterprises. Really geared at helping small and medium sized enterprises throughout America understand the export opportunities here in China. But the Chinese government has approached Shanghai AmCham to really help provide information to the Chinese companies on how to invest in the United States. So this is great news and a great accomplishment for Shanghai AmCham. It shows the significance of your role here in the region and the great potential you have to really promote further cooperation between the commercial and trade interests of the United States and China.
There’s much to be proud of here in China. Much to be proud of in terms of the presence of U.S. companies, the millions of Chinese that U.S. companies employ in China, and the great corporate social responsibility that American companies are engaged in throughout China, spreading American values, introducing the Chinese people to what America is all about and how we operate.
So we look forward to working with all of you as you try to promote closer, stronger U.S.-China relations — economically, diplomatically, culturally, simply people to people.
We know that only by working together can our two countries not only solve the issues and the challenges facing each of our countries, but indeed working together China and the United States can provide the leadership that can solve so many of the challenges and the problems facing the entire world. We look forward to your contributions, your active engagement. Keep up the great work. Thank you very much.