Last Friday, January 27, the Global Business Dialogue hosted an event at the National Press Club on the topic
China Trade: 5 American Views.
Erin Ennis, senior vice president at the U.S. China Business Council, led off the discussion. Today's featured quote weaves together an observation she made at the beginning of her remarks and the closing sentence.
Those bookends had some heft to them. Ms. Ennis cited, for example, the facts that U.S. exports and investments in China supported some 2.6 million American jobs and added $216 billion to U.S. GDP in 2015. As for America's imports from China, they significantly lowered the cost of living for American shoppers, saving the average household about $850 in 2015. These and other figures she quoted can be found in a report the U.S.-China Business Council released earlier this year on
Understanding the U.S.-China Trade Relationship. One statistic that caught our eye in that report was the assessment that
"U.S. factories are still 90 percent more productive than Chinese manufacturers." Perhaps the most important, however, is the fact that China's middle class is now seen as larger than the entire population of the United States. In short, success in the Chinese market is critical to the long-term success of American business.
Ms. Ennis had her concerns, however, a lot of them. And those concerns were not simply about the issues that bedevil any large trading relationship. They were concerns about the direction of China's policies. The hopeful moment was the fall of 2013, when a critical gathering of China's top leaders - the so-called Third Plenum - produced a document promising significant reforms. "Our analysis," she said, "and the experience of our companies that are doing business in the market is that, by and large, the reforms have not been implemented. And
in some sectors, China has even become more restrictive, particularly in technology and cyber related sectors."
The things that need to be done in China, at least from the perspective of American business, are not things the U.S. government can force China to do. They are things the Chinese will have to decide to do on their own and for their own reasons. That is not to say that Ms. Ennis didn't have some suggestions. She did. Here are a few of them. China could:
- Reduce the restriction on foreign ownership in China. (In many sectors, she said, China is quite open, with no restrictions but in autos, for example, and in many service areas restrictions apply.);
- Make licensing requirements the same for foreign and domestic firms;
- More broadly, eliminate the distinction between Chinese and foreign companies;
- Keep regulatory decisions non-political;
- Cooperate in bringing the WTO Environmental Goods Agreement to a Conclusion; and
- Address the issue of overcapacity in steel and other industries.