Adding new dimensions to the U.S. - China trade relationship: achievements of the recent summit - June 1998

Business America, July, 1998 by Donald R. Forest

President Clinton's visit to China represented the second time in less than a year that presidents from the United States and China have met under the auspices of a summit on a broad range of issues. This is unprecedented in the history of U.S.-China relations. President Clinton's successful visit will expand mutual cooperation and nurture shared interests in a variety of areas. Secretary of Commerce William Daley, who accompanied the President, was responsible for introducing a variety of trade and other Commerce-sponsored initiatives which add new dimensions to our growing commercial and overall relationship with China.

Since the October 1997 Presidential summit, Secretary Daley and a number of senior Commerce officials, including General Counsel Andy Pincus, ITA Under Secretary David Aaron, and Bureau of Export Administration Under Secretary Bill Reinsch, have worked diligently to introduce initiatives in the context of this summit that broaden our commercial and economic focus with China. They also have endeavored to give greater focus and direction to activities under the U.S.-China Joint Commission on Commerce and Trade (JCCT), a commitment made by Secretary Daley and former MOFTEC Minister Wu Yi during the 11th session of the JCCT held just prior to the summit in October 1997. Each of these sub-cabinet Commerce officials has traveled to China and hosted counterparts in the United States during the past four to six months to advance the rule of law, greater market access for U.S. firms, and enhanced technology controls.

Other Commerce bureaus, including the National Telecommunications and Information Administration, the Patent and Trademark Office, and the National Oceanic and Atmospheric Administration, have contributed significantly to broadening our dialogue with Chinese counterparts on the growing importance of electronic commerce and other Internet applications, intellectual property protection, marine conservation, and air quality. The joint statement announced on June 27 by Presidents Clinton and Jiang includes eight areas of cooperation, ranging from non-proliferation to people-to-people exchanges, and more than 50 corresponding agreements and initiatives (see article beginning on page 13). The U.S. Department of Commerce is responsible for implementing 11 different initiatives in five areas, including:

(1) Under non-proliferation and security, end-use

checks; (2) under economic and commercial, offering

technical assistance and joint cooperation in the areas of

housing, social security, pension benefits, and insurance

programs; sponsoring the JCCT this fall; sponsoring a

state and non-state enterprise forum focusing on

China's massive reform efforts; leading an

infrastructure mission to China in the spring of 1999;

sponsoring seminars and technical exchanges in

electronic commerce and Internet applications; and

cooperating on an aviation infrastructure initiative;

(3) under energy and environment, sponsoring industry

forums on oil and gas and energy finance; (4) under

science and technology, sponsoring seminars on marine

resource conservation and natural disaster reduction;

and (5) under rule of law, sponsoring seminars under

the JCCT for Chinese officials on electronic commerce

and on corporate law.

All of these initiatives focus on growing our exports, sharing technical expertise, and developing long-term, mutually beneficial commercial and economic relationships that support the goals of both countries. The JCCT will play a significant role in implementing many of them. The focus of these initiatives and contact information for each are provided in the following section. Within the next several weeks, the Department of Commerce will be meeting with other U.S. Government agencies, industry associations, and companies to identify the next steps for each of the initiatives. Interested parties should contact individuals identified in the article beginning on page 6.

In developing these efforts, Commerce has been working closely with other U.S. Government agencies, private sector industry groups, and companies to forge new linkages that enhance market access for U.S. firms in key sectors, such as infrastructure, while bolstering current economic reform efforts in China. Our large and growing deficit with China, which could approach $60 billion this year if current trends continue, demands a more open market for U.S. goods and services in China. While U.S. exports are up almost 6 percent as compared to the same period last year, China represents about 1.8 percent of U.S. total exports to the world, a trend which has remained virtually unchanged since 1985.

As we focus on achieving greater market access, we also observe the direction and pace of China's unprecedented economic reforms with considerable interest. These reforms are among the most far-ranging economic reforms ever undertaken by China since the founding of the People's Republic in 1949. Transforming 300,000 state-owned enterprises, 100,000 of which are debt-ridden; evolving a sound banking system; and ensuring that there is an adequate social safety net as China's society and economy adjust to reform measures, are daunting tasks for any economy. As China intensifies reforms, one of the concerns for U.S. trade officials will be to ensure that China's markets remain open to U.S. goods and services.