Good morning. I am so pleased to be back in Guangzhou. In April, I was here with 24 American clean energy firms for a Presidential trade mission. On that trip, I had the opportunity to enjoy an early morning run through Tianhe Park and along the Pearl River, plus I had the opportunity to visit the Guangzhou Opera House, designed to resemble two pebbles on the banks of the Pearl River designed by the Pritzker Prize winning architect Zaha Hadid. Yes, you heard me right, Pritzker Prize winner, an architectural prize given by my family. It is a small world! It is no wonder that Vice Premier Wang takes pride in this area and chose to invite our delegation here, to Guangzhou, for the 26th session of the U.S.-China Joint Commission on Commerce and Trade.
Today, we have come together to focus on deepening relationships between our cities and municipalities, our states and provinces. We refer to this as subnational cooperation, and we are confident that forging ties between our localities will open new avenues for trade and investment between our two nations.
Before focusing on the benefits and potential of greater subnational collaboration, I want to spend a few moments discussing the reinvigorated forum that brings us together today – the JCCT. Frankly, this dialogue is essential to supporting deeper commercial ties between our private sectors, to building a stronger relationship between our governments, and to addressing difficult policy issues we face.
Last year, Vice Premier Wang, Ambassador Froman, and I decided to “re-imagine” the JCCT in recognition of the dramatically-increased size and scope of the U.S.-China economic relationship. Thanks to more than 15 years of reforms and dramatic growth, China has become an exporting powerhouse.
Since 2000, our total bilateral trade has grown exponentially, from $116 billion to $590 billion last year– a fivefold increase. To put that in perspective, our trade with China today is larger than our trade with every country in South America and in Africa combined.
Despite the economic transformation in China and the related changes in our bilateral relationship, the JCCT had not fundamentally changed in over a decade. The reimagined JCCT is our effort to construct a dialogue that better reflects the scale, dynamism, challenges, and opportunities of the modern economic relationship between our two countries.
This year, as in years’ past, our government-to-government meetings will be substantive and focused on important issues related to competition policy, cyber and technology policies, agricultural biotechnology approvals, the role of non-governmental organizations, and specific industry challenges.
Given that President Xi has said often and explicitly, including this past week at APEC and during his recent visit to the United States, that China is committed to letting the market play a more decisive role, we are optimistic that our talks will lead to important outcomes.
But the JCCT is no longer solely about these critical negotiations. In an effort to focus more energy on market opportunities, we have invited private sector representatives from both countries to become our partners in the JCCT. Last year, your input guided us toward cooperative events focused on issues like cross-border investment, travel and tourism, and agriculture.
This year, input from the private sector has focused us on subnational cooperation, healthcare, food safety, and corporate governance. These are all areas of opportunity where we can be doing far more business together.
Industry has also helped us identify the significant policy impediments that prevent us from developing closer ties. This input has helped us focus our government to government dialogue.
Last year, at our first reimagined JCCT, the business-to-business engagements produced strong outcomes on priorities including investment and tourism, and formed the basis for our leaders’ announcement in September that 2016 would be the “US-China Tourism Year,” a commitment of programs that will improve the travel experience for our visitors into each of our countries and will significantly increase the number of travelers between the U.S. and China for years to come.
Working together on this type of broad opportunity is only possible if we strengthen our subnational cooperation. Our Mayors, our Governors and our business leaders are the ones who can make our national aspirations a reality. You are the folks who will create new opportunities for our businesses and tie our countries closer together.
I have seen how the relationship between the Mayor in my hometown of Chicago and business leaders from China has benefited both countries. In the last 2 years alone, China has committed to investments in Chicago of over $1.3 billion.
And we have seen provincial cooperation here in Guangdong, where the Guangdong Department of Commerce has signed a memorandum of understanding with the State of Washington, State of Michigan and State of California. As a result, Guangdong and these states have deepened their ties through many trade, business, investment and cultural exchange programs.
The civic and business relationships between our cities and municipalities, states and provinces, whether in Guangdong and across China or in Illinois and across the United States, have paid dividends for both our countries, which is why I am pleased that our Department and MOFCOM will sign an MOU tomorrow to expand these efforts.
Another reason to encourage more subnational engagement and cooperation is that in both countries, our local governments tend to be at the vanguard of policy innovation.
Mr. Vice Premier, I suspect you would agree with what Justice Louis Brandeis of our Supreme Court famously said – and I quote: “A [U.S.] state may serve as a laboratory, and try novel social and economic experiments without risk to the rest of the country.” He could have said the same of Chinese provinces.
Many reforms – including free trade zones and intellectual property courts – were first piloted at the subnational level. When done right, these innovations can create the conditions that promote greater trade and investment flows, which benefit localities by creating more jobs and generating greater tax revenues, local residents by providing a higher standard of living and access to goods and service, and companies by providing them with new market opportunities. This is truly a win-win….win.
Mr. Vice Premier, you know this first hand from your time as Guangdong’s Party Secretary, when you and your colleagues designed and tested the creation of a new negative list management system. Outside companies in sectors not on the list were invited to invest in the province without central government review.
This innovation at the subnational level created incentives for companies to invest in Guangdong and contributed to major economic growth across the province.
Today, Guangzhou has been named the best place to do business in China by Forbes Magazine. This experiment worked so well that the State Council has announced it will implement the negative list system in additional localities, and then adopt it nationwide in 2018.
Fundamentally, our goal with today’s event is to promote more commerce between us. And we know that means our business and our local government leaders must be given the opportunity to build relationships and learn how they can help solve each other’s challenges.
I look forward to hearing your thoughts on how our two countries can expand our trade and investment relationships. Thank you.
Source: U.S. Department of Commerce
