9th China Business Conference
THOMAS J. DONOHUE
President and CEO, U.S. Chamber of Commerce
Washington, D.C. May 1, 2018
Remarks as prepared for delivery.
Good afternoon, ladies and gentlemen, and thank you for being here.
I’m excited to introduce our luncheon speakers, who are going to engage in what’s certain to be a fascinating and thought provoking discussion.
Before I do that, let me briefly share a few thoughts about the current environment on trade, specifically our economic and trade relations with China.
We’ve all heard the old Chinese blessing—or is it a curse?—“May you live in interesting times.”
This is certainly an interesting—and turbulent—time for the U.S.-China relationship.
There’s a vigorous debate about its future at the highest levels of government, and increasingly, among the American people.
There are wide and varying viewpoints. So let me state what I think most of us can agree on.
First, the trade relationship—while far from perfect—has delivered substantial economic benefits to our economy, our businesses, and American consumers.
Trade with China supports vast numbers of U.S. jobs, and China’s growing consumer market is critically important to U.S. exporters and investors.
Most businesses would agree that, under the right conditions, the economic opportunities for American businesses in China are boundless.
Second, despite these manifest economic benefits, there are serious, growing, and legitimate challenges regarding a range of Chinese government policies and practices.
They include measures that restrict access to its market, force technology transfer as a condition of competing, and broadly seek to undermine the value of intellectual property.
And it’s not just Americans who are complaining—these concerns have been echoed by stakeholders from around the world, including members of the EU, Japan, Korea, and others.
Let me be clear: no one is afraid of fair competition from China. No one is afraid of a Chinese company succeeding on the global stage if that company isn’t playing with a stacked deck.
What American business and the U.S. government are concerned about is state capitalism, and how it creates an un-level playing field and distorts markets around the world.
It’s problematic for China to employ significant state support for industries and to restrict competition from foreign companies in its domestic market—while it enjoys better access and better treatment in foreign markets.
It undermines the full potential of the bilateral relationship, and it is increasingly eroding its foundation.
Put simply, it’s just not sustainable, and, ultimately, not in China’s long-term interests.
Let me underscore this last point: Building non-competitive industries is bad policy and bad business, and it has no place in fair global commerce. It is ultimately self-defeating.
So, now would be an excellent time for China to move forward aggressively on significant, systemic reforms that produce a truly level playing field. I know there are going to be some conversations about this topic later in the week in Beijing.
Third, we are deeply concerned that the proposed tariffs list and escalating tariff threats from the administration will not effectively advance our shared goal of changing these harmful Chinese practices.
Tariffs are hidden, regressive taxes that will be paid by U.S. businesses and consumers in the form of higher product prices.
We need the administration instead to work collectively with U.S. industry, Congress, and our trading partners to adequately address China’s unfair trade practices in ways that maximize the likelihood of real, enforceable solutions—and without inflicting collateral damage on businesses and consumers.
Finally, a respectful and mutually beneficial relationship between the United States and China is good for the world.
The U.S. and China constitute 40% of global GDP. We are the two most powerful and influential countries on the planet.
We share global responsibilities to foster peace, prosperity, and stability.
The whole of our relationship is not just trade and investment. We can and should take steps now to enhance commercial cooperation in sectors that are vital to both of our economies, such as agriculture, healthcare, and an efficient global transportation system.
Having said all of that, no one here is naïve enough to believe that China and the United States are going to stop competing for resources, talent, and market access around the world … or that either country will stop advancing its ideas about the best economic model and form of government.
So my bottom line on China is pretty simple: Compete we will, but cooperate we must. Not only for the good of our respective peoples, but for the benefit and wellbeing of the entire world.
If we all agree that a mutually beneficial relationship between China and the United States is the goal, the question is: How do we get there from here?
To have a conversation about that very question is Ambassador Robert Lighthizer—the 18th United States Trade Representative—and David Rubenstein, co-founder and co-executive chairman of The Carlyle Group, one of the world’s largest private equity firms.
As you know, the Ambassador is in the middle of renegotiating NAFTA. As I have told him many times, failure is not an option—we must have a positive outcome. We hope the Ambassador will give us a quick update on NAFTA, but, more importantly, we look forward to his thoughts on the U.S.-China relationship.
David Rubenstein is not only one of the most successful private equity firm managers in history, he’s a remarkable philanthropist. And, he’s begun something of a second career as a journalist, conducting fascinating interviews on Bloomberg TV.
He also has a long history of involvement in China and knows it markets and leaders very well.
Please join me in welcoming them now.
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