Myron Brilliant
Former Executive Vice President and Head of International Affairs, U.S. Chamber of Commerce


September 10, 2019


U.S.-China Economic Dialogue Remarks by Myron Brilliant
Beijing, China
September 10, 2019

As prepared for delivery

Good afternoon. We are meeting at an important time, this being the 70th anniversary of the People’s Republic of China and the 40th anniversary of normalization of U.S.-China relations.

I want to begin by offering words of thanks on behalf of the U.S. Chamber to Chairman Zeng and his colleagues at CCIEE—not only for their kind hospitality for this discussion, but also for their longstanding intellectual contributions to international economic issues.

Mr. Chairman your broad vision, thoughtfulness, and frank expression of views has set a positive tone for every meeting we have held between the Chamber and CCIEE. In addition, you have devoted decades to serving as a bridge between China and the rest of the world.

For this we all owe you our gratitude.

In the past, we have often said that we were meeting at a critical moment in the U.S.-China relationship. That indeed may have been true, but if so, we are meeting today at a “super critical” moment, not only for the bilateral relationship and our economic growth, but also the global economy.

A global slowdown is now evident and the IMF recently revised its projected growth for 2019 down to 3.2%. The uncertainty produced by U.S.-China trade tensions and other geopolitical risks such as a hard Brexit has created an increasingly complicated and challenging external environment.

As a result, both our economies are under pressure. China’s growth is facing headwinds and slowing down.

The U.S. economy, which has been going strong with low unemployment and low inflation, faces increasing risks, and we are seeing downward pressure in key metrics, such as business confidence and monetary policy.Against that backdrop, let me offer a few thoughts that I hope can serve to help frame our discussions.

From the earliest days of our dialogue, participants have generally agreed that more open trade and investment— multilaterally, regionally, and bilaterally—is an important goal. We have spent many sessions discussing the importance of the multilateral trading system and win-win ways to help achieve greater bilateral synergy, including the possibility of a free trade agreement, investment treaty, or investment and trade treaty.

But today, the U.S., China and the broader global economic environment are moving in the direction of greater government intervention and zero-sum strategies, pushing us farther away from the goal.

Current protectionist trends risk tipping an already weakened global economy into recession, or worse.Given this increasingly challenging context, let me share with you where the U.S. Chamber stands on this set of issues, including U.S.-China economic relations.

We continue to believe that agreements or other measures that create more open, market-driven trade and investment flows, and innovative technologies, are beneficial to the economies undertaking them.

Moreover, we are opposed to protectionism of all kinds and unilateral tariffs, in particular. We have consistently opposed the use of such tariffs by the United States over the past two years, and retaliatory measures by China. We are deeply concerned about their damaging impact on the U.S., China, and global economies.

We have been the unquestioned leaders in expressing such views publicly and privately to the U.S. Administration, the Congress and the American people.

With regard to U.S.-China economic relations, I’d like to highlight the following:

First, as our track record over many decades demonstrates, the Chamber is a strong supporter of, and an advocate for, the significant two-way opportunities in the bilateral commercial relationship.

Second, we have done, and will continue to do, all in our power to advance dialogue and negotiation between our two governments to resolve differences; we reject tit-for-tat, unilateral actions that exacerbate them.

Third, we believe there is vast untapped potential in our relationship, and we continue to promote significant efforts to see it realized in areas ranging from healthcare to services, to energy.

Fourth, we strongly support people-to-people exchanges and positive-sum partnerships between our two business communities.

These four points underpin the Chamber’s work on China and our unswerving commitment to helping the two governments cultivate a positive, constructive, and mutually beneficial relationship.

At the same time, we recognize certain circumstances that have given rise to the frustration that underlies the U.S. Administration’s approach.

The multilateral trading system operates on a common set of principles, including transparency and strong rule of law; relatively open markets; strong protection of intellectual property; and reliance on the market.

For the United States, and despite recent suggestions to the contrary, these are the overwhelming drivers of our economic growth and innovation.

In recent years, there have been questions raised about the momentum for economic reform and opening in China, and the country has seemingly moved toward an approach emphasizing state direction and control.

As we have discussed at this forum in the past, the Chinese government has long recognized that subsidies for the state-owned and state-supported sectors, including down to provincial and local levels, are costly, inefficient, and counterproductive.

However, these subsidies and state support are still very much a part of Beijing’s policy playbook.

Similarly, China’s restrictions on data transfer, requirements to localize data, and innovative use of big data to rate companies, are increasingly limiting opportunities within its own borders, and undermines its ability to participate in the global digital economy.

These restrictions also serve to devalue the benefits of potential market access openings currently being negotiated.

Additionally, as the EU Chamber of Commerce in China notes in its informative report on the Corporate Social Credit System, there is a bevy of new measures emerging in data, cyber and other arenas, that “enhance the government’s ability to steer companies’ behavior.”

The report also suggests that this system of regulatory ratings is a prerequisite for economic opening up, and that even were China to undertake reforms that have long been discussed, the Corporate Social Credit System would effectively limit the significance of such opening.

These issues illustrate our differing approaches to achieving growth, promoting innovation and competing in a global economy. They are fundamental and at the heart of the tensions in the trade relationship.

It’s not surprising these negotiations are so complex. This is particularly the case in the context of transformational technological change.

Technologies such as AI, facial recognition, use of “big data”, and IoT are remaking companies, supply chains, our workforce, and our very way of life.This is an area, like so many others, where U.S.-China cooperation—between our governments and private sectors—could make a great contribution to our two great countries and the world.

Regrettably, technology and innovation are also increasingly flash points for conflict in the relationship.We urgently need more work to highlight the opportunities for positive-sum cooperation in advanced technology areas, as well as joint efforts to highlight the costs to our economies of policies that attempt to draw borders around innovation.

Healthcare is an excellent example. We both recognize the importance of health, and its impact on our economic growth. We should pursue opportunities to expand cooperation around issues of mutual concern—from chronic diseases and worker resiliency to innovation in health care technology and delivery.Energy is another example.

The U.S. shale gas revolution has transformed the United States into the largest producer of natural gas, and its production is expected to continue to grow.

Meanwhile, China is transitioning from coal to alternative forms of energy, and is slated to become the world’s largest importer of LNG. The potential for partnership and cooperation is both promising and significant.I hope that in our discussion tomorrow on the impact of technology, we can also exchange ideas about possible cooperative activities, perhaps under the umbrella of this dialogue, which can benefit both sides.

So, in the current economic situation, what is way forward?

To start, we urgently need a lowering of friction and a return to greater normalcy in bilateral economic relations. The Chamber is very pleased that both sides last week agreed to return to the negotiating table and will soon hold staff-level and principal-level talks.

In the current environment of instability and uncertainty, confidence-building measures will help. Ultimately, what we need is for the negotiations to translate into a high-standard, comprehensive agreement. From the U.S. perspective, that means China must tackle tough issues including subsidies, market access, protection of intellectual property, forced technology transfer, and digital trade and regulation. Any such agreement should also provide for the concurrent removal of punitive, and retaliatory, tariffs.We are not naïve, and realize the obstacles that exist to such an agreement. That said, without a truly effective agreement, we don’t see an alternative path to reestablishing bilateral economic stability.

We simply cannot afford any further delay or escalation of tensions.

In the absence of progress in the negotiations, we face the risk of severe damage to our economies, with the possibility of contagion spreading worldwide.

We are already seeing spillover effects that are undermining other aspects of the bilateral relationship—from education exchange to clean tech cooperation.

Meanwhile, global supply chains disruptions are impacting trade and business confidence.With the U.S.’ presidential election cycle about to intensify, there is also increasing risk that the U.S.-China trade war could become further politicized. Further escalation of tension is in neither country’s interest and time is of essence.

We are therefore rooting for the success of the two governments in the upcoming talks.

In closing, let me again express my admiration and thanks to Chairman Zeng and CCIEE for their kind hospitality and hard work in organizing this important dialogue. Mr. Chairman, I think you would agree that this platform has never been more critical, since its inception 8 years ago, to bringing our business communities together to help shape a positive, constructive and mutually beneficial U.S.-China economic relationship.

As the two most powerful nations, we have shared responsibilities to foster global peace, prosperity and stability. There are no winners in a trade war, only losers, with more than enough pain to go around. We therefore call upon the leaders in both countries to intensify efforts to conclude a meaningful, comprehensive and enforceable bilateral trade and investment agreement in a timely way.

The American business community, led by the U.S. Chamber of Commerce, stands ready to support and assist in this effort.

Now more than ever, we must work hard to help the two governments get our economic relationship back on a positive track.

I believe this dialogue will help us take steps towards these goals. Let’s get the conversation started and we look forward to a frank and lively exchange.

Thank you.

About the authors

Myron Brilliant

Myron Brilliant is the former executive vice president and head of the International Affairs Division at the U.S. Chamber of Commerce.