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Remarks at the U.S.-China Economic and Trade Cooperation Forum, Chicago, Illinois

Friday, January 21, 2011

Commerce Secretary Gary Locke
Remarks at the U.S.-China Economic and Trade Cooperation Forum, Chicago, Illinois

Thank you, Governor Quinn, for those remarks and for bringing this visit to Chicago to showcase the growing links between Illinois companies and China.

Chinese investment in Illinois, and throughout the United States, is growing quickly, and it is not hard to see why.

The U.S. is the number one investment destination in the world because we have:

  • A secure environment for investment;
  • An open market system with an embedded rule of law culture;
  • The most productive and best educated workers in the world; and
  • Vast natural resources. 

For Chinese companies, investing in the U.S. also means being closer to customers in your most important market.

And I’d like to note that the Department of Commerce’s International Trade Administration is helping to bring even more investment here. 

Our Invest in America program is the lead government effort to promote and support foreign direct investment; and our trade specialists are eager to assist Chinese companies that want to invest in the United States. 

Of course, our Commerce Department trade experts are also involved in promoting American exports abroad, with our efforts gaining even more urgency under President Obama's National Export Initiative, which aims to double U.S. exports by 2015.

China will obviously play a huge role in helping us achieve that goal.

China is the United States’ third-largest export market -- only our exports to North America are larger.  And exports to China are up 34 percent in 2010 over 2009. 

In fact, our exports to China are on track to exceed $100 billion dollars in 2011. 

That trend will be helped along by some good news we got earlier this week.  During President Hu’s visit, we completed dozens of deals that will increase U.S. exports by more than $45 billion and also increase China’s investment in the United States by several billion dollars. 

As President Obama noted: “From machinery to software, from aviation to agriculture, these deals will support some 235,000 American jobs.” 

I think this is yet another positive sign that “Made in the USA,” still means something abroad.  It’s a hallmark of quality and innovation that is demanded the world over.

Being here in Illinois, we are in the home of some great manufacturing companies that have played such a significant role in the U.S. expanding our exports to China. 

Much of Caterpillar’s production here in Illinois is exported, with China as one of its largest markets.  Motorola has been a participant in the mobile communications revolution in China for over twenty years.  And Boeing aircraft has been integral to developing China’s civil aviation market into the second largest in the world.

But the true impact of these American companies on U.S.-China relations can't be measured by export sales alone.  Over time, Caterpillar, Motorola and Boeing’s operations in China have helped upgrade the capacity of China’s domestic companies and markets -- and they have helped to dramatically transform the way China interacts with the world.

U.S. multinationals have demonstrated the power of innovation and the benefits of increased trade and investment between China and the United States.

Increasingly, that is helping to create a more equitable partnership between our countries, one defined less by China making and U.S. consumers taking and more by empowered Chinese consumers buying more goods and services from U.S companies; and by Chinese and American innovators working side-by-side to develop breakthrough technologies.

Just look at what's happening with General Electric, which has formed a joint venture company with China’s Shenhua Energy Company to advance cleaner coal technology solutions for industrial chemicals, fuels, and power generation.

Or look at the agreement that was just signed this week to establish a U.S.-China Public Private Partnership on Healthcare. 

The partnership will draw its strength from U.S. and Chinese companies working together to help China achieve its goal of making more quality healthcare for its people and it will open new export markets for U.S. companies that are world leaders in healthcare innovation. 

These are but a few of many examples of America's and China's best minds working together on breakthrough technologies that could open up hundreds of billions of dollars in new commercial opportunities in both China and the United States -- opportunities that could create millions of good, middle-class jobs in both countries.

The Obama administration has put great emphasis on fostering a positive U.S.-China relationship.  Whenever possible, that means building on the type of cooperation I just talked about. 

And China has made great strides as well, by creating a business environment that is much freer today than it was when it first joined the WTO in 2001. 

But as a trading relationship matures, it is also important for the United States to be frank and assertive when we are discussing frictions that exist in our bilateral relationship.

In my travels across the country, I continue to hear stories of exasperation from American business leaders concerned about the commercial environment in China.

These concerns are shared by businesses around the world, and the most frequent complaints revolve around lax intellectual property protection, lack of predictability and openness in government decision-making, and a series of policies that unfairly discriminate against foreign companies operating in China.

The United States understands that making progress on these issues can be difficult. When China has millions of people coming in from the countryside looking for work, it isn't necessarily an easy decision to close down a factory producing counterfeit goods when it is providing badly needed jobs.

So these are real and significant challenges. For market reforms to continue in China, it will take constant vigilance -- not just from the United States, but from all countries and businesses around the world that benefit from rules-based trading.

We'll also need vigilance from Chinese business and government leaders, who themselves have a strong stake in ensuring that China is friendly to global innovation and international competition.

The bottom line is that improved implementation of China’s WTO commitments will lead to a more balanced trade relationship that will create countless benefits for both of our countries.

A more balanced relationship will ensure China’s growing middle class has access to the world-class brands, products and services America has to offer.

It will mean more opportunities for Chinese companies to invest in the United States. 

Numerous Chinese companies are already successful in the United States, and their success enables them to employ U.S. workers, re-invest their earnings to expand their U.S. operations, and contribute to the economic vitality of our nation. 

These are win-win opportunities for China and the United States.

And you can be assured that the Obama administration is working diligently to keep things moving towards a freer and more open business environment in China, which will be good for the Chinese people and it will be good for the people and the businesses of Illinois and the United States who are providing such critical goods and services for the Chinese marketplace.

We need to realize the opportunity that our two countries have to not only build on our own rich histories, but to write an entire new chapter.

You look at Chinese history and see thousands of years of world-changing innovations: the abacus and the seismograph; silk and cast iron; the compass and the clock; gunpowder and fireworks; paper and the printing press; acupuncture and herbal medicine. 

The United States is much younger, but our own history is no less impressive.  We built on some of these Chinese innovations and created many of our own to help lead an unprecedented industrial and information revolution in the 19th and 20th centuries.

Today, in 2011, the history of our nations has converged.  It can be U.S. and Chinese companies that lead the way forward in the 21st century.

That discover medicines that conquer some of the world’s worst diseases.

That discover new ways to generate energy that can help beat back climate change.

That discover new ways for people to communicate and integrate into the world economy.

These are the opportunities in front of us.  We just have to seize them.

Thank you.