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Remarks at U.S.-China Commercial Relations Event, New York City, New York

Wednesday, February 2, 2011

Commerce Secretary Gary Locke
Remarks at U.S.-China Commercial Relations Event, New York City, New York

Thank you, Art, for that introduction and to the team at Bloomberg for inviting me here today.

I'm looking forward to sitting down with Al to discuss the U.S.-China trade relationship in greater detail.

It’s a critical conversation for policymakers and certainly for investors, because we are at a turning point in the U.S.-China economic partnership.

It is a partnership that in many ways, has been defined by the China price.

Over two decades, China became the workshop of the world, with its factories manufacturing and assembling low-cost goods and selling them all over the world.  It has been a mutually beneficial arrangement.

In America, consumers got an impressive array of inexpensive merchandise. And in its transition into the world's top exporting nation, China has lifted millions of its citizens into a fast-growing middle class.

But this past is not a sustainable future. The debt-fueled consumption binge in developed countries like the United States is over. And China realizes that there are limits and drawbacks to purely export-driven growth.

For the sake of stability and prosperity in both our countries – we need a more equitable economic partnership.

Both countries are taking positive steps in that direction.

The United States is already significantly increasing its exports – up 17 percent last year – with exports to China leading the way. They were up 34 percent between January and November.

Meanwhile, the private savings of U.S. consumers are increasing. 

At the same time, the Chinese leadership has made rebalancing its economy one of the cornerstones of its twelfth five-year plan, including measures to spur domestic demand like increased social spending and boosting the minimum wage.

The Chinese government is also putting an intensive focus on strategic emerging industries, with a greater focus on areas like healthcare, energy and high technology.

U.S. businesses have the technical know-how, the resources and the desire to help China develop these industries, if only the Chinese will let them in. 

Foreign businesses are restricted from participating in a variety of Chinese industries.  In others, the Chinese select national champions in key industries like mining, power generation and transportation, and effectively shut out foreign competition. 

This is hardly the only commercial concern in China.

When I talk to business leaders across America, they continue to express significant concerns – shared by business around the world – about the business environment in China, especially:

  • China's lax intellectual property protection and enforcement;
  • Lack of transparency in government decision-making; and
  • Numerous indigenous innovation policies that often preclude foreign companies from vying for Chinese government contracts.

The complaints are different, but the fundamental problem often boils down to the distance between the promises of China's government and its actions.

Even when Chinese leaders make strong statements of principle to take action on an issue of concern, those principles don't always turn into binding law.  And even if those laws are written, actual implementation at the local or provincial level is often left wanting.

Look at the issue of intellectual property. We have heard Chinese leaders condemn IP-theft in the strongest terms, and we’ve seen central government laws and regulations written to reflect that sentiment.

But American and other foreign companies – in industries ranging from pharmaceuticals and biotechnology to entertainment – still lose billions of dollars from counterfeiting and IP-theft in China every year.

Here’s a way to understand the scope of the problem:  In the United States, for every dollar in computer hardware sales, there is about 88 cents in software sales.  But in China, for every dollar in hardware sales, there is only eight cents in software sales.   

According to the Business Software Alliance, that discrepancy is largely explained by the fact that nearly 80 percent of the software used on computers in China is counterfeit.

At the Joint Commission on Commerce and Trade in December, we made some progress on the illegal software issue, with China agreeing to increase its budgets for software in government ministries and large state-owned enterprises. 

Of course, this dealt with a problem we thought we had solved in 2006, when China issued a regulation requiring government ministries to buy computers with licensed software pre-loaded.  They just never put any money behind the commitment.

Or look at what's been happening with the wind energy market in China.  For the last two years, the U.S. government has effectively been playing whack a mole to get rid of rules that discriminate against US companies who want to participate.

We knocked down one rule in 2009 — China committed to stop imposing domestic content requirements on wind turbines used on Chinese wind farms—and another popped up. 

The new rule required companies that wanted to build wind farms in China to prove they had previous experience operating in China.  Even if a company had ample international experience building wind farms, that would not count.  In December 2010, we got the Chinese to drop that rule.  

This type of behavior simply has to change. 

The fact is that China has benefited tremendously from a rules-based international trading system since it joined the WTO in 2001.

The United States and other foreign nations have every right to insist that China implements the market-opening policies it agreed to when it joined the WTO. 

For market reforms in China to continue, it will take constant vigilance from all countries and businesses around the world that benefit from rules-based trading. 

It will also require 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 Chinese economy continues to move up the economic value chain, where growth is created not just by the power of a country’s industrial might, but also by the power of its people’s ideas and their inventions.  

In the long run, economies with poor intellectual property protections and inconsistent application of market opening commitments will see one of two things happen:

Either its people will lose the incentive to innovate, or they’ll do that innovating somewhere else.

That does not need to happen.  If China becomes more proactive in instituting market reforms, it will help unleash the innovation that will be necessary to grow the Chinese economy, and provide jobs for hundreds of millions of that country's citizens in the years ahead.

The United States and its companies stand ready to help China in its ambitious development goals. 

Our companies have a lot to offer, and so long as China moves steadily down the road towards reform, there is almost boundless potential for this partnership.

With that, I’m ready to take some questions from Al.


AL HUNT, BLOOMBERG NEWS: Yes. Can everybody hear in the back? Thank you, Secretary Locke. I can't think of anyone who is better suited to address this overarching question than you, both you've been to China seven or eight times as Governor, as Commerce Secretary, and front-and-center in the Obama Administration. You are Chinese-American, your wife is, so it's really terrific to get your perspective.
    Let me just start off. I'm going to ask a couple of questions and then we'll turn it to you all and I'll suspect you'll ask better questions. So I'll be sort of the warm-up for that.
    The recent U.S.-China summit in Washington, very interesting, a lot of focus on the commercial and business enterprises, CEOs from both countries, and you called it a turning point in U.S.-China relations. Was it a bit disappointing, however, that the Chinese did not give more on currency and protectionism?
    LOCKE: I think as we heard from some of the other speakers this morning that the currency is effectively being revalued. Obviously, the United States has a very clear position that it ought to be able to float freely and we think it should do more. And Secretary Geithner, the Treasury Secretary, has spoken at great length about it. But it has moved; we think it needs to move more.
    HUNT: Let me just go back to 10 years ago because I think you can give us an insight into kind of where you think we've been, which may tell us where we're going to go. When China was entering the WTO, American businesses and the American public were told that that was really going to be good for American business. It was a fabulous -- it was going to be a huge economy, a great market.
    And yet, over those years it seems, if anything, China seems to have gotten more protectionist, the indigenous innovation, many requirements at the local level, companies were reporting a tougher and tougher time. Should that have been foreseen? Is that a surprise? Is it going to get worse, and did we overpromise?
    LOCKE: No. First of all, we need to understand just how well American companies have done in China in the last 10 years. And exports of American goods and services to China have grown exponentially, I think by a factor of 10 in the last 10 years -- I have to double-check those figures.
    But, of course, imports from China into the United States have grown even faster, because the reality is the United States is one of the most open societies and has one of the most open economies of the entire world. But we simply demand and expect some reciprocity.
    Nonetheless, U.S. exports have grown, as I indicated, 34% in 2010 over 2009. Exports of goods and services are already over $100 billion. And China's actually our largest export destination outside of Canada and Mexico. And, of course, China is the number one importer into the United States, or the United States is China's largest export destination as well.
    So we very much depend on this relationship. It is, however, not equal because of the protectionist policies and the barriers, whether tariff or non-tariff barriers that China has imposed, whether it's indigenous innovation, favoring innovation that occurs within their own country. And that, of course, is of great concern when companies want to vie for government contracts and so forth.
    So we need to continue to push. As I say, it cannot simply be from the United States government or the United States businesses. It has to be from world leaders, with the G-20 and others and businesses around the world pushing for more open markets.
    HUNT: There's been that push and there's still, I think, 10,000 regulations issued, industry regulations in China -- more than the rest of the world combined. Should we be doing something differently? Is there any sense that we've turned the tide, to use your term?
    LOCKE: No. I think it's going to require constant vigilance, and that's why we have various mechanisms for dialogue and for action. We have the strategic and economic dialogue that looks at the overall U.S.-China relationship from the strategic, economic, military, etc., etc. to the Joint Commission on Commerce and Trade, which meets every year, where we actually focus on the very discreet, rubber-hits-the-road issues that American companies face.
    Whether it's pharmaceutical companies or medical device companies concerned about which agency regulates them and is in charge of licensing or even a recall for defective products, to the things like local content requirements like on wind turbines and so forth.
    That JCCT form is the form by which we actually discuss and actually make progress and advocate on behalf of U.S. companies. So you're going to have to have multi-regimes or multi-fora for addressing these problems.
    HUNT: Anything else that you as a policy maker or that you would advise companies to do to increase the exports to China in this environment?
    LOCKE: Obviously, you need to be very careful any time you enter into China, especially if you have IP. You have to be very, very careful about that. You need to consult with patent lawyers and law firms and so forth in terms of how to approach that and make sure that you're registered there.
    One thing to note is that IP enforcement is improving. U.S. companies report that they've won about -- when they've gone to court, they've won about, I think, over two-thirds of the cases. Still, a lot more needs to be done. Oftentimes the penalties may not be sufficient. And when administrative actions are taken by the Chinese government, it still may not -- it may be more of a slap on the wrist.
    But we're seeing that progress, and there's a lot of joint seminars and exchange of legal scholars, judges, and so forth to really try to improve the legal system. And we also have attaches in China -- IP attaches from the Department of Commerce -- who are really advocating on behalf of U.S. companies and also addressing some of the very issues that U.S. companies face with respect to IP.
    HUNT: Let me turn around a minute. There's a great deal of interest in China investing more in the United States. But let me ask you to put on your political cap, as a two-term governor and former county executive and state legislator. You remember the backlash against Japanese investment back in the '80s, or the flap over CNOOC's proposed purchase of Unocal assets.
    Is there a risk politically in encouraging more Chinese investment here, or how is that going to play out?
    LOCKE: Obviously, there are certain industries or certain sectors that may be very sensitive, and there is a process to make sure that any investment of any country in the United States into a particular industry does not jeopardize any key issues involving national security.
    But in most cases, foreign investment is very much welcomed and approved in the United States. We're seeing Russia purchasing shuttered steel mills and reopening them, and I think that -- here in the United States, and I think that there's opportunities for Chinese investment to bring capital into and join up with U.S. companies to provide needed capital, which could then allow for expansion of those facilities and making products here, hiring U.S. workers.
    We see a lot of the Japanese auto dealers or auto makers now opening assembly plants here in the United States. BMW now has opened up an assembly plant, and South Carolina is making their 300 Series -- or their 3 Series automobiles, and 25% of those are actually being exported to other destinations around the world.
    So there is -- I think you're seeing even a lot of manufacturing by U.S. companies coming back to the United States when you're looking at the wage differential in the developing countries. It's not as significant a portion of the total cost of the product these days. Just-in-time deliveries, fuel transportation costs, all of that is helping to bring some manufacturing back to the United States, and so I think there are good opportunities for a Chinese investment here in the United States.
    HUNT: Let me ask one or two other political-related questions, then we'll throw it open. So start thinking about questions that you want to ask the Secretary.
    We're seeing anew in Egypt over the last eight days, the conundrum or contradiction of an authoritarian regime trying to promote markets while restricting the flow of information. The Chinese are proven masters at this so far. But is that sustainable over the long run? Can you really restrict the flow of information and really promote markets and promote commerce?
    LOCKE: I don't think that you can restrict the flow of information. The censors in China will always be one step behind all the creative folks out there. And whether it's fax machines and coded words that people might use to describe various topics, they'll always be a step behind.
    But I think the use of technology and just the people's appetite for basic freedoms and the flow of information, it will be almost impossible for the Chinese government to fully repress these ideas and thoughts and discussions.
    So I think the Chinese leaders are most concerned about stability, and yet there are just thousands of demonstrations and protests every day throughout China, whether it's on closure of a factory leading to greater unemployment, whether it's for  environmental reasons or safety reasons or when they close a factory down for making illegal or counterfeit goods or something like that, to confiscation of land and grievances about corruption and so forth.
    The Chinese government is most concerned about keeping that domestic tranquility. But as we've seen in the Middle East and elsewhere, that people have to have an ability to express themselves. And the more authoritarian you are or the more that you clamp down, sometimes that can actually have disastrous consequences. So I think the Chinese, most of all, do not want to see another Tiananmen Square.
    HUNT: As we mentioned, you've been to China in official capacity at least seven times; the last four times, I think, as Commerce Secretary. When you were there, you must have dealt with the United States ambassador to China, another former Western governor, Governor Huntsman of Utah, who announced just the other day he's resigning and there are reports he's coming back to run for President of the United States against your boss, Barack Obama.
    Did you and Governor Huntsman have a chance to discuss U.S. international economic policy or the Obama policy towards China while you were there?
    LOCKE: Well, actually, when I've been with Ambassador Huntsman, he's been to the United States several times as part of the meetings on the Joint Commission on Commerce and Trade and, of course, when President Hu was here in the United States in January, but then when we were back in China.
    So I've met with him, and he's been a very key member of the Administration in terms of helping develop China policy and giving us the insights on what's happening in China and working with us as we develop the agenda on the Joint Commission on Commerce and Trade. I've never heard any criticism by the Ambassador with respect to our China policy.
    HUNT: I'm sure that will help him with the Tea Party caucus a great deal in South Carolina.
    Let's throw it open to questions from the audience, and I think we have people carrying microphones. Is that correct? So, don't be shy; raise your hand if you have a question. Right there. If you don't mind briefly identifying yourself, it would be good.
    RICHARD WRIGHT, RBW CAPITAL: Richard Wright with RBW Capital. China has a trade surplus of $25 billion, or annualized $300 billion, with the United States and Japan is a large partner. One of the largest is the electrical machinery and power generation equipment being sold to China. How are we selling more of these technologies and what are we doing for speeding the process with patent trademarks and copyrights for the entrepreneurial growth?
    LOCKE: Well, first of all, we are selling a lot in terms of energy equipment. And GE, of course, is a huge producer/manufacturer of gas turbine engines to a host of different technologies to even locomotives, and has formed a lot of partnerships in China and has, in fact, formed a partnership to develop high speed transportation, a high speed rail, here in the United States with the Chinese.
    And so all that manufacturing is occurring in the United States, and so it's producing thousands of good paying jobs in New York and elsewhere around the country. And when the Chinese were just in town in January, we were able to announce about $45 billion worth of sales of U.S. goods and services to China that will result in supporting some 240,000 American jobs. So those are the positives. We also had about $3 billion of a Chinese investment into the United States that was also announced.
    But on a lot of these deals that were announced, these were joint ventures. Some of it is the sharing of technology in which U.S. companies are doing engineering work, whether it's in coal gasification or a whole host of high-tech work in energy, whether it's bio-fuels research for aviation and so forth.
    Again, it's very important that U.S. companies look at their core intellectual property, make sure that it's protected and that they have really tight agreements and that they're working with trustworthy partners. That's really always the key -- who are you working with?
    HUNT: Back there.
    PHELIM KINE, HUMAN RIGHTS WATCH: Good afternoon, Secretary. My name is Phelim Kine. I'm with Human Rights Watch. I'd like to start by thanking you very much for your intervention in July 2009 about the Chinese government's attempt to impose the Green Dam software. That was a wonderful intersection of rights of freedom of expression and trade issues.
    I want to ask you about another critical issue facing U.S. investors in China, and that is that of the State Secrecy Law, China's law on guarding state secrets. This is probably one of the most dangerously ambiguous laws anywhere in the world. As you're probably aware, there are four criteria for state secrets in China; the fourth being other matters, which is anything the Chinese government at multiple levels can declare a secret.
    And exhibit A for the danger of this law to U.S. citizens is a citizen by the name is Xue Feng, a U.S. citizen who is currently serving an eight-year sentence for buying a database on petroleum resources in China -- information that can be freely accessed anywhere else in the world. He was held for, I think, three years prior to his sentence after being grievously tortured.
    I just wonder, could you tell us, what are you concerns, what are your interventions with the Chinese government on the State Secrecy Law? And could you tell us what your interventions are for Xue Feng particularly? Thank you very much.
    LOCKE: Those matters are actually handled by the State Department, and those matters are also discussed at the highest levels between Secretary Clinton and the Strategic and Economic Dialogue and when Secretary Clinton was meeting with the Chinese leaders during the Chinese visit last month, and those human rights issues are of great concern.
    And you heard the President in public statements and in the press dialogue talking about the need for greater freedoms for the people of China and respect for internationally accepted human rights.
    And so this is a topic that I've heard the President speak directly to Hu Jintao in smaller setting meetings in which he's actually raised these issues as core values that the United States will continue to espouse and even publicly as well, as we saw the President, so that's all I can say at this point.
    HUNT: Any thoughts or news about the imprisoned American?
    LOCKE: No, I don't have the latest information about that.
    HUNT: Okay. Over here?
    SHAUN REIN, CHINA MARKET RESEARCH GROUP: Hi. My name is Shaun Rein. I'm from the China Market Research Group. I'm based in Shanghai. How would you respond to criticism from the Chinese government and people like me, that the RMB appreciation issue is more of a red herring. The fact is that American companies if the RMB appreciates aren't going to move jobs back to the U.S., but they're going to go to more lower cost areas like Vietnam or Indonesia.
    So the RMB appreciating isn't really going to save American jobs and isn't going to really create a lowering of the surplus and, in fact, that Bernanke's QE2 and debasement of the U.S. dollar is causing more volatility and inflation issues throughout the world than the RMB, because I think the Chinese and me personally are much more critical of American monetary policy than China's monetary policy.
    LOCKE: Well, first of all, I think on the Fed's QE2 policy, that while it's an independent arm of the United States government and independent from the executive branch and the President, we nonetheless support the overall objective of the policy, which is to stimulate the U.S. economy and to get us on sound financial footing as quickly as possible and to really revive our economy and create jobs.
    But it's actually in the economic self interest of other countries around the world to have a very strong U.S. economy, because that means a greater appetite for a purchase of those goods made around the world. And that benefits all countries, whether it's Europe or Asian countries.
    And we've heard from many leaders around the world, saying that they support that policy and how very much they want the U.S. economy to grow as quickly as possible and to rebound from the economic crisis. So I think it's in that spirit that we very much support the Fed policy.
    With respect to the appreciation of the currency, that is well stated. And it's not just a concern of the United States, but it's a concern of the G-20 leaders as well. But we have to have a rules-based market system, trading system, and that also includes not controlling your currency.
    Shawn Rein: Thank you.
    HUNT: I think we have a microphone coming. Good.
    CHRISTINE DIENNE, MORGAN STANLEY: Hi. Christine Dienne from Morgan Stanley Research. First of all, thank you so much for being here. I just had a quick question. One metric commonly used to address -- to look at trade imbalances is current account deficits and surpluses. And as we know, the U.S. has been consistently running a deficit and China has had a surplus.
    And recently we heard this brought up on the G-20 conferences in 2010, where Secretary Geithner actually called for countries to reduce their current accounts and balances with a possible target of, say, 4%.
    Going forward in the next five years, do you expect such sort of overarching current account guidelines to sort of actually be implemented on a policy level internationally? And, if so, what implications does that have for the nitty-gritty of trade that your department sort of oversees?
    LOCKE: I have to tell you that that's a question for Secretary Geithner. That's really getting into the details of the weeds and the strategy in which the financial leaders from the G-20 nations are involved in, and I'm not part of that.
    But we at the Department of Commerce are focused on helping achieve that equation, whatever the target is, by promoting exports. Here's the simple statistic -- only 1% of U.S. companies are involved in exports. That's a far cry from other industrial countries like Germany. And our exports make up only about 10% or 12% of our GDP, all right?
    Only 1% of U.S. companies export. But of those that do, 58% export to only one country -- typically, Mexico or Canada. And, of course, the big multi-national companies like Boeing and GE and DuPont and Dow and others, they export all around the world.
    But the 58% that export to only one country -- typically medium and small enterprises -- if we could just help them export to two or three or four more countries, we could grow our exports exponentially and improve our employment figures in the United States. Exports accounted for virtually half of the GDP growth of the last year and really help lead the economic recovery.
    And we certainly can do better, and that's what we in the Department of Commerce and the other agencies throughout the U.S. government have do a better job of -- informing those medium and small-sized companies of the vast array of free services that we offer to help them export.
    And we have, for instance, in our commercial service offices all around the world, in virtually every consulate, every embassy around the world, we have people whose sole job is the find buyers and customers for made-in-U.S.A goods and services.

And we in the Commerce Department have to do a better job of connecting those free resources to those businesses, and that's why this coming year we're launching a 12-month campaign with the export/import banks, Small Business Administration, and other trade agencies to really market the services that we offer and how we can engage and get those U.S. companies to export.
    We're even partnering up with companies like FedEx and UPS. Because, for instance, UPS has an incredible database. They can sort the number of their customers by destination, type of good, frequency of delivery, of shipment type, size, dollar value.
    And so we are working with the best UPS customers who are now exporting to only one or two countries and saying, "Wow, we think you have a great product. We want to help you export, let's say. If you're only exporting to Canada, why not Australia? If you're exporting only to Mexico, why not Latin America or even Asia or Europe?"
    And so we're not trying to do this on our own. We're trying to leverage and partner with the private sector.
    HUNT: Who's got a really good final question? Right here. Have you asked one before?
    GARETH HILL, BLOOMBERG NEWS: I haven't. I don't know how good it is; now you've put me on the spot.
    HUNT: Oh, this is a lot of pressure now, a lot of pressure.
    HILL: Gareth Hill (ph) from Bloomberg. Mr. Secretary, in the State of the Union address, the President mentioned the need for America to be really leading the world in innovation and specifically referred to students coming to this country to make use of the American education system and is currently losing them back to their original countries. We heard a discussion earlier about people coming here for an education and then returning to China.
    What kind of steps is the U.S. looking to take to retain these people? How much of an impact do we think they can have? And what, if any, was the reaction of the Chinese to what the President was saying?
    LOCKE: I haven't heard the reaction of the Chinese to the President's State of the Union address, which was only 10 days ago or a week ago. But let me just say that if you look at what China's doing and how they're focusing on core industries and putting all of their policy weight and financial resources into specific industries, they are moving. They are really moving and they're getting results. And they're much focused and they're very coordinated.
    We need a similar strategy with respect to U.S. education policy, with respect to clean energy, with respect to transportation, and you name it. We have to be much more focused because the Chinese with their different political system is able to do things that we're not often able to do, and we're much more collective and so much democratic.
    But we have got to be focused and we have got -- as the President said, we need our own Sputnik moment to rally American people and American businesses so that we can out-innovate, out-educate, and out-build the rest of the country. It's not really a zero sum game. It's just saying if we want to compete we've got to marshal our resources and have that greater focus.
    Just with, for instance, just energy. The Chinese are spending about $10 billion a month developing a clean energy sector, and it's not necessarily just to reduce their greenhouse gas emissions or cut down on environmental pollution. It's really to develop the industries of the future and the millions of jobs that will go with it and be the world's supplier of clean energy for the world.
    So many companies in the United States want to move into clean energy technology, and there are a lot of investors who want to get into this space, but they're not going to unless we have clear signals from the United States in terms of policy. Why put your money and R&D into technology A if U.S. energy policy eventually says that we really favor technology Z? So we have too many people sitting on the sidelines waiting for that certainty before they can really engage.
    And so in the meantime, the Chinese and other countries in Europe are racing ahead. And soon, in a few years, we're going to wake up and say, "How's it that they have become the Silicon Valley of clean energy?"  And we're left behind.
    And then what we're doing in terms of trying to create incentives for multi-nationals to not only bring their money back home and invest it in R&D and in manufacturing and job creation, but also what are the tax policies that will encourage investment here in the United States?
    And that's why the President has signaled that he's willing to look and wants to engage in corporate tax reform, but in a way that's deficit neutral, but in a way that also encourages investment here in the United States. So we've got to really focus on these issues.
    And, of course, education. Other countries are developing and graduating PhDs, they're graduating people with degrees in science and technology, and we're having a hard time filling the jobs that are opening up here in America. We have an education gap. We have a skills gap.
    And that's why the business agenda has to also include the education agenda.  What future do we want for our children and our grandchildren? And will they be able to compete in this global high-tech 21st century economy?
    So we've got to really focus on high academic standards in our public schools, so that our kids really are schooled in the basics of math, science, and critical thinking skills. And then, are our colleges and universities offering the courses that can really graduate the engineers and scientists that we need?
    And then, American colleges and universities are the best in the world and we attract people from all around the world. And when they get those advanced degrees, don't we want to take advantage of that incredible creative spirit and curiosity and drive and have the cutting-edge research occurring here and then spawning new companies -- the Intel's of the world and the Google's of the world and the Microsoft's of the world?
    Or do we want those great people that we have educated here to simply go back to their native countries, whether it's Singapore, Korea or China or Germany, and creating the companies there and creating the job opportunities there? And so we really need to think, and as the President said, we need to have a serious look at our immigration policies that send the best and brightest back to their home countries instead of keeping them here and creating jobs.
    HUNT: Mr. Secretary, we appreciate so much your interesting and insightful observations about subjects that are going to be so profoundly important to the lives of our children and grandchildren will lead. Thank you very much.
    LOCKE: Thank you very much. Thank you.