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Remarks from U.S. Commerce Secretary Penny Pritzker on the Importance of Stronger U.S.-China Economic Ties

Wednesday, December 17, 2014
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On the eve of the 25th Session of the U.S.-China Joint Commission on Commerce and Trade (JCCT), U.S. Secretary of Commerce Penny Pritzker delivered keynote remarks at the Shared Vision for Global Economic Partnership event hosted by the Chicago Council on Global Affairs.

U.S. Trade Representative Michael Froman and Chinese Vice Premier Wang Yang also spoke at the event. Following their remarks, the three co-chairs of the JCCT participated in an armchair discussion with Ambassador Ivo Daalder, President of the Chicago Council on Global Affairs about the opportunities for further trade and investment between our two nations.

Secretary Pritzker’s remarks focused on the importance of the U.S.-China commercial relationship and the need to strengthen that partnership. She also spoke about the decision to “reimagine” the JCCT this year to involve the private sector. The Shared Vision for Global Economic Partnership event is one of several events today aimed at bringing American and Chinese private sector leaders together with government leaders to share their expertise and experiences operating in one another’s respective markets.

Earlier today, Secretary Pritzker highlighted the productive relationship enjoyed by the U.S. and China with respect to the travel and tourism sector during a speech at the Travel and Tourism Cooperative Program hosted by the U.S. Travel Association. Her remarks are available here.

Secretary Pritzker pointed to the recently announced U.S.-China Visa Validity Agreement as proof of the success of this relationship. Last month, President Obama and President Xi announced an agreement to extend the validity of tourist and business visas from 1 to 10 years and student visas from 1 to 5 years. With this change in visa policy, 7.3 million Chinese visitors are expected to travel to the U.S. by 2021 -- contributing nearly $8.5 billion per year to the economy and supporting as many as 440,000 jobs.

Secretary Pritzker also highlighted the need to take additional steps to support the increased travel demand that will accompany the visa validity extension, including the expansion of airline capacity and infrastructure investment.

Remarks As Prepared for Delivery

We are here to discuss the U.S.-China economic relationship, and we will. But there is significant news from the Administration today about our ties with Cuba. I want to take a moment to say a few words on this announcement before addressing the business at-hand:

These historic actions by the President chart a new course for our country's relationship with Cuba and its people.

It will improve the lives of millions and will help spur long overdue economic and political reform across the country. 

Expanding economic engagement between the Cuban people and the American business community will be a powerful catalyst that will strengthen human rights and the rule of law.

President Obama and I believe deeply in the power of commercial diplomacy to change lives and economies for the better.

Everyone deserves an opportunity to increase prosperity for themselves and their families, and to that end, I look forward to visiting Cuba to lead our efforts to expand our commercial diplomacy as part of the President’s initiative to encourage positive change in Cuba.

I am proud that the Department of Commerce is playing an integral role in this historic policy change. This is a moment of opportunity for our country, but so is the reimagined JCCT.  Notwithstanding this remarkable news, our economic partnership with China is our focus today. Thank you, Ambassador Froman, for your introduction and for working so closely with me and our team at the Commerce Department to make this year’s re-imagined JCCT a reality. Thank you to Vice Premier Wang Yang for your partnership, for your friendship, and for your commitment to strengthening the U.S.-China economic relationship. And thank you to Ambassador Ivo Daalder and the Chicago Council on Global Affairs for hosting this event and for your work to educate and influence the public discourse on today’s most pressing global issues.

The success of the U.S.-China commercial relationship is critical to global economic growth and stability.

  • Our two markets are the largest on the planet – we account for nearly 35 percent of global GDP.
  • Together, our populations total more than 1.6 billion people – just shy of a quarter of the planet.
  • And combined U.S. and China trade in goods and services add up to about one-fifth of all international trade.

If you step back and consider these statistics, it is difficult to overstate the importance of our bilateral economic relationship – to each other and to the global economy. That means there is pressure on us – on Ambassador Froman, on Vice Premier Wang, and on me – to deliver.

To quote Confucius, “our responsibility is heavy and our road is long.” For us, that long road must guide us toward a deeper, more effective U.S.-China relationship. Meeting here in Chicago – in the “City of Broad Shoulders” – the responsibility falls on OUR shoulders to lead: to deepen strategic trust and build a stronger partnership between our countries and our respective business communities. That partnership demands mutual respect – and must produce tangible results that yield mutual benefits. That partnership requires action – because, as my mother used to tell me, “actions speak louder than words.”

This year’s JCCT represents a moment of extraordinary opportunity. But it is also a moment for us to be honest and frank about the challenges before our governments and our business communities. Friends and partners do not always agree, but they do speak candidly to each other. For the past 20 years, we have witnessed an unabashed rush to invest in China. Businesses saw a massive market for American goods and services, a growing middle class, and affordable production platforms. Recently, though, that rush has slowed. Foreign companies are starting to approach the Chinese market with greater caution. This fall, foreign direct investment into China slumped to a four-year low.

The question is, what has changed?

The market has not suddenly dried up. Demand still exists and China’s economy is growing. But concerns about sanctity of contracts, transparency, rule of law, intellectual property protections, and other issues are beginning to take their toll. To some extent, the challenges facing China are not unique. Global competition for investment has become more intense. Foreign companies need to know they are on equal footing with domestic companies if governments want to draw their capital. None of us can rest on our laurels and expect future prosperity. None of us can assume that just because our country was an attractive place to invest five years ago, it will remain an attractive destination five years from now.

Vice Premier Wang, Ambassador Froman, and I understand these dynamics. We understand that the JCCT is a forum where we can convey the concerns of our private sectors to each other and where we can take steps that help both of our countries enhance our competitiveness. This ambition is what prompted the three of us – during a tea break at last year’s JCCT in Beijing – to begin re-considering how the JCCT works. We all recognized the need to bring this event into the 21st century. I believe the Vice Premier captured the sentiment well in a recent letter to Ambassador Froman and me, where he said, “both sides need to determine how best to improve the JCCT and thereby unleash its full utility.”

Our re-imagined JCCT will continue to serve as a cornerstone of our bilateral economic relationship, but it will also serve as a platform for government leaders to hear from the business community. To that end, we have asked American and Chinese private sector leaders to join us here in Chicago for a number of events – to share their expertise and to tell us about the opportunities and obstacles to doing more business together. This will be a broader dialogue than ever before.  It will feature government-to-government, business-to-business, AND business-to-government discussions.  It is only the second time this event is being held outside Beijing or Washington, DC. By listening to the voice of business, we are putting the “commerce” back into the Joint Commission on Commerce and Trade.

Notwithstanding all of these changes, our basic goal remains unchanged: promoting more openness, trade, and commerce between the United States and China. Over the course of three decades, we have seen what is possible as China opened its doors to global commerce: in that time, approximately 600 million Chinese people have been lifted out of poverty. That is nearly twice the total U.S. population. American companies have contributed to China’s extraordinary economic success by working hand-in-hand with Chinese partners. From improving water filtration processes to assisting low-income farmers to delivering state-of-the-art equipment to Chinese hospitals, the technology and expertise of U.S. firms helped improve the lives of millions of people across China.

The benefits of openness have not just flowed in one direction. In recent years, Chinese investment in the United States has grown dramatically, and we want to encourage even more. Over the last few years, Chinese investment in the United States has grown more rapidly than from any other country. Today, Chinese direct investment supports more than 14,000 American jobs. So…with so many Chinese business leaders here this evening, let me say ‘thank you.’

The JCCT should be the setting for us to build on exactly that kind of progress. But it is not the only vehicle to strengthen our relationship. Another opportunity will come in April, when U.S. Energy Secretary Ernest Moniz and I will lead what some are calling a ‘super trade mission’ to China.  This will be the first Commerce trade mission featuring two cabinet members in over a decade. Our visit will focus on expanding U.S.-China clean energy cooperation. We will explore opportunities for American businesses to support smart cities and smart growth in China, through areas such as green building and transit, energy retrofitting and energy efficiency, clean air and water technologies, and more.

It is hard to imagine this particular trade mission coming at a more opportune moment in our history. Just a few weeks ago, Presidents Obama and Xi reached a landmark agreement to tackle climate change through mutual commitments to reduce emissions.

This was not the only break-through announcement from the president’s recent trip to China. Our presidents also agreed to extend the validity of tourist and business visas from 1 to 10 years, and student visas from 1 to 5 years. This visa agreement will:

  • Increase travel and tourism between our countries;
  • Produce extraordinary benefits for our economies; and
  • Enhance personal connections between our young people, our families, and our communities.

Both of these accords will have ripple effects for many years to come. They will leave behind a positive legacy for this generation of Chinese and American leaders.

In many ways, our reimagined JCCT is an opportunity for us – the JCCT co-chairs – to build a positive legacy as well. It is an opportunity for us to create a legacy of cooperation, respect, and stronger U.S.-China economic ties. Leaving this legacy will require a tremendous amount of work – this week and going forward. But if we succeed, I believe we can make the JCCT into a more effective mechanism. We can use the JCCT to promote more commerce; to deepen trust; and to address real business challenges.

This is an opportunity; now, it is up to us to seize it.

Thank you for joining us.  I look forward to a productive meeting tomorrow and to the continued evolution of the Joint Commission on Commerce and Trade.

Now, it is my honor and privilege to introduce our partner in the effort to take our countries’ relationship to the next level, and someone I consider a friend: Vice Premier Wang Yang. In his previous post in Guangdong, the Vice Premier built a legacy of transparency in local government. Now, as China’s point person on commerce, trade, tourism, agriculture, and more, he is working to establish a national legacy – of greater openness and engagement in the global economy.

Ladies and gentlemen, please join me in welcoming a great leader and champion for a deeper U.S.-China economic partnership: Vice Premier Wang Yang.