Secretary's Speech

Secretary of Commerce Carlos M. Gutierrez
Remarks to the Beijing American Chamber of Commerce and the U.S.-China Business Council
Beijing, China

Thank you for your kind words and hospitality. Good afternoon, everyone.

Let me begin by expressing our nation’s deepest sympathy to the families of those who suffered the loss of loved ones during the earthquake which hit central China. The United States is reaching out to the Chinese Government to offer disaster relief and assistance.

I was last in Beijing in December for the Joint Commission on Commerce and Trade and Strategic Economic Dialogue meetings.

I’ve traveled here more than to any other foreign city during my tenure as Commerce Secretary, a demonstration of the importance and priority this Administration has placed on the U.S.-China relationship.

On the subject of travel, I’m pleased to report that the U.S.-China tourism MOU signed at the last JCCT meeting is being implemented. Chairman Shao and I made the announcement this morning.

The first leisure travel group will be arriving in the United States in June. Their visit is being timed to coincide with the fourth U.S.-China SED being held in Washington, D.C.

America looks forward to welcoming many Chinese leisure travel groups in the future.

Three decades ago China opened its doors to the world. Since then, the United States and China have been building a strong and growing economic relationship.

Last year, China overtook Japan as our largest export market outside of our North American Free Trade Agreement partners. It also displaced Canada as our largest source of imports.

While U.S. exports to China grew 18 percent to $65 billion in 2007, U.S. imports from China were far higher, growing nearly 12 percent to $322 billion.

I’ll be candid. This $256 billion bilateral trade deficit is a problem. It feeds the appetites of those who would build walls around our markets.

In both our countries, there has been a rise of economic nationalism. This is a troubling trend. It threatens the progress we’ve made in increasing commercial partnerships—partnerships that benefit our citizens and our economies.

Protectionism doesn’t protect.

Markets that are open, transparent and predictable encourage commerce and investment.

Markets where intellectual property rights are honored and economies are protected from counterfeit and pirated goods encourage commerce and investment.

Markets where competition is open and playing fields are level encourage commerce and investment.

Through the JCCT and SED, we continue to work with our Chinese counterparts to ensure we both pursue policies of openness that have helped drive our growth.

I believe that in such an economic environment U.S. firms would welcome the opportunity to do even more business in, and with, China. And, in this way, expand consumer choices and drive growth and job creation. This would be to the mutual advantage of both the U.S. and China.

Foreign direct investment is another sector ripe for expansion. We’re seeing movement both ways in that direction.

For example: Citigroup is opening a new branch in Beijing’s financial district to offer products and services to multinational and local companies.

And China’s Suntech Power Holdings is locating its North American headquarters in San Francisco and plans to manufacture solar power systems in America.

These projects and other U.S.-China foreign direct investments support jobs and generate growth in both countries.

But, comparatively, Chinese FDI in the United States accounts for only 0.2 percent of the total investment by all Asian countries in the U.S.

As you know, the United States welcomes foreign direct investment. Not only do we welcome it, we encourage it.

Last year, we launched “Invest in America,” an initiative to promote the U.S. as the best market in the world for investment.

We applaud China’s “Go Global” strategy, which offers incentives to Chinese companies that are interested in investing overseas. And we understand that China’s outbound investment has experienced rapid growth since the strategy was initiated in 2002.

According to a report by China’s MOFCOM, China’s cumulative overseas investment was nearly $91 billion in 2006. And Asia is the largest destination for China’s outbound investment.

However, while U.S. companies have invested over

$22 billion in China, Chinese companies have invested only $550 million in the United States.

The United States is the number one destination for direct foreign investment in the world. FDI is a critical component of the U.S. economy.

We would welcome more Chinese companies exploring the multiple opportunities to set up shop in our 50 states.

A McKinsey & Company survey of China’s top 500 companies shows that most have not made any investments abroad. In China’s most active sectors such as technology, media and telecom, only 50 percent of the large companies have invested overseas.

As you may know, the Commerce Department is working with the American Chamber of Commerce in China to attract more Chinese investors to the U.S. market.

We’re producing a 10-city series of programs to introduce Chinese investors to a broad-range of FDI opportunities.

Additionally, we’re working to improve the efficiency and user-friendliness of the U.S. entry process. In November, I released a policy paper on supporting U.S. competitiveness by facilitating international travel.

I want to congratulate our U.S. Embassy Beijing and AmCham China for providing us with a great example of a successful business visa facilitation program.

We know that travel facilitation is a complex issue.

As part of our “Invest in America” initiative, we’re in the process of coordinating with our colleagues at the Departments of State, Homeland Security, and Treasury on a series of information seminars on the visa application and border entry process.

As China pursues its “Go Global” investment strategy, we encourage the exploration of the great opportunities for investment throughout the United States.

Trade and investment are strong building blocks for a prosperous and growing relationship.

We look forward to working with our Chinese colleagues and AmCham China and the U.S.-China Business Council to expand our commercial partnerships and to welcome more Chinese investors to the United States. Thank you.