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Remarks of
U.S. Secretary of Labor Elaine L. Chao
Asian American Business Development Center Dinner
New York, New York
Friday, June 22, 2007
Thank you.
And let me recognize the Counsel Generals who are attending this evening.
And congratulations to all the awardees!
It is a pleasure to be here tonight among so many business leaders, who are doing so much to strengthen our community and our country. You are creating jobs and opportunity for others. And you have a tremendous role to play in world affairs by building bridges of understanding between America and Asia. Cultural understanding is so important as our country becomes part of the worldwide economy. That's especially true for our community, as Asia rises in importance as a key trading partner of the United States.
Tonight, permit me to touch upon how the U.S. economy is creating opportunity, and a few other issues of importance to our community.
Today, the U.S. economy is healthy and resilient. Despite a bumpy housing market and rising energy prices, the fundamentals of our economy remain positive. Job growth is healthy and wages are rising.
The U.S. national unemployment rate remains low at 4.5 percent. That's more than a full percentage point lower than the average 5.7 percent unemployment rate of the 1990s. And our economy has created 8 million net new jobs since August 2003. That's more jobs than Eurozone countries and Japan combined have created.
Our economy is very large and diverse. The weakness in any one sector is offset by the strengths of the other sectors. And it is interesting to note that while consumers may report pessimistic feelings about the economy, consumer spending remains strong. So the best barometer of how the economy is doing is not what people say, but how they actually behave!
Last week, I represented our country at the International Labor Organization in Geneva and traveled to Helsinki, Finland to meet with members of the new government. And it was interesting to note that wherever I traveled, the United States economy is admired. Its strength and resiliency are the envy of the world. Finland, for example, is a model Nordic country. Yet its unemployment rate is much higher than ours at 7.7 percent. And the unemployment rates of other European countries are even higher. That's why many of these countries are moving towards America's economic model.
As I mentioned, the critical development for our country today is that it is part of a growing worldwide economy. China is now America's second largest trading partner, behind Canada. The tremendous growth in U.S.-China trade has created new opportunities for both countries, and many challenges as well.
So in 2006, President George W. Bush and President Hu Jintao created the Strategic Economic Dialogue, or SED, as a framework to help manage this economic relationship in a more comprehensive way.
In our two SED meetings — in Beijing in December 2006, and last month in Washington, DC — high-level U.S. and Chinese officials discussed key issues. These included investment, energy, the environment, financial services, and growth and innovation. Progress was made on many issues, including commercial aviation, tourism and intellectual property.
During these discussions, the U.S. has focused on the growing trade deficit with China. There is now a growing realization that the root cause of this imbalance is structural and ultimately cultural. The Chinese economy is growing at a remarkable rate — 11 percent in the first quarter of 2007. Westerners have been disappointed that this high rate of growth has not been accompanied by an explosion in consumer spending. This means lost opportunities for the West to sell goods and services to China.
But China spends less because they must save more. And the Chinese, as true with other Asian cultures, save largely in order to provide for parents in their old age. The family is the safety net.
So one of the goals of the U.S. in the SED is to encourage China to build a stronger social safety net, so workers will have the confidence to spend more and develop a vibrant consumer economy. And that would mean a larger market for U.S. produced goods and services in China.
In working through these and other issues in the SED, both China and the U.S. are gaining a new appreciation of the differences between the two cultures. As you know, American and Asian cultures are very different, so it's easy for cultural misunderstandings to take place.
Let me mention one example from last month's SED II meeting.
In some American, a photo was shown of the head of the Chinese delegation, Madame Wu Yi, appearing to tug on President Bush's arm as she stood with him and Treasury Secretary Paulson in the White House. The caption seemed to imply that there was conflict. But in reality, the President, observing western manners, insisted that, as the only woman, Madame Wu Yi should stand between himself and Secretary Paulson. But Madame Wu Yi, observing Chinese custom, insisted that the highest ranking person — the President of the United States — be in the center of the photograph. That's why she had her hand on his arm. But the American captions seemed to imply that Madame Wu Yi was jostling the President.
As Asian American entrepreneurs, you have an important role to play in helping Americans and Asians understand one another and avoid cultural miscommunications. You can also help dispel fears about Asia in this country by sharing information about the contribution that Asia makes to strengthen our economy. And you can help Asia understand that America seeks to create a win-win situation for both our countries through free trade.
So thank you for all that you do and congratulations once again to all the award winners!
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