Sharing the Dream of Peace and Prosperity

Remarks By U.S. Commerce Secretary Don Evans to U.S. and Chinese business leaders and Chinese government officials

Beijing, China
April 22, 2002

Thank you, Ambassador Randt. I am honored to share this time with you on the first full day of our business development mission to China. Chinese government officials, the American Chamber of Commerce and U.S.-China Business Council, …and all the businessmen and -women with us today — thanks to all of you for coming ... you represent the best of the spirit of American entrepreneurship!

First, let me say, our agenda is your agenda. And we have made U.S. business interests in China a top priority. I very much look forward to hearing your comments during my visit this week.

As you know, I’m leading a business development mission here in Beijing and then on to Shanghai. This trip is all about sharing a dream. Not the American dream, but the dream of all people ... all mankind ... to have a world that lives in peace and prosperity.

As many of you know, I spent all my adult life in business. And I am honored to have this opportunity now to serve the public in the Bush Administration. …But as I consider the true meaning of public service, it occurs to me that each of you also is engaged in public service. You are stewards of capitalism — of the place where we pursue and fulfill our dreams.

Six billion people live on this planet. Three billion of them live on less than two dollars a day. That’s not good. Our responsibility is to do something about it. That’s our purpose, as those who have been blessed with so much. Our highest calling is to help and serve others.

How can we help? With one word: trade. Encouraging the free market system.

Expanded trade leads to greater economic development. It leads to a higher standard of living and quality of life. It leads to lifting people out of poverty. It leads to a world that lives in peace and prosperity.

So that’s why we’ve come to Asia, to expand trade relations and build a better world.

This is why we’re working so hard back in Washington to give President Bush the ability to negotiate new trade deals — and lead the world to free, open and fair trade.

Today China is clearly one of our most important trading partners.

Last year our exports and imports combined totaled some $120 billion ... compared to just $25 billion a decade ago.

We have more U.S. Commercial Service personnel and resources in China than in any other nation. We have 100 people in China ... including native Chinese ... 50 of them here in Beijing.

And the latest signs of the significance of the relationship are the business leaders from 15 world-class U.S. companies on this trade mission. Can you please stand?

They are the lucky ones. 85 companies from 26 states applied to come. We selected 15, but many others are eager to explore new opportunities in China.

They represent a broad spectrum of industries. They have considerable global experience, including here in China. And they all have the optimistic, American entrepreneurial spirit.

In fact, Tony Beyer, the CEO at Tek Pak (which makes special packaging materials for high-tech components) was recently inducted into the Chicago Area Entrepreneurship Hall of Fame. I visited his plant earlier this month. What an amazing facility!

As we’re all aware, the gap in U.S.- China trade is very large. Our trade deficit with China has risen steadily for nearly two decades, and now stands at $83 billion. U.S. exports to China rose sharply the last two years in a row, in what some are calling the “WTO effect.”

Many sectors are opening up. The companies with us this week are in sectors with great potential in China -- information technology (IT), telecommunications, engineering, construction, and medical technology.

2001 was a banner year for China.

China chaired the APEC meetings. It joined the World Trade Organization (WTO). And it was selected to host the 2008 Summer Olympic Games.

Coming from the host country of this year’s Winter Olympics, I wish China the best of success.

To stage the world's largest and most spectacular event, the Chinese government plans to spend some $23 billion on operations and infrastructure development.

That means new business opportunities for our American companies.

• For example, there will be an “Olympic Optical Internet” that will provide broadband, multimedia teleconferencing and other services to all Olympic locations.

American companies excel in telecommunications and information technologies, so I hope China will take advantage of what our companies have to offer.

In addition, our world-class transportation, environmental technology and other service companies can lend a hand in helping make the China Olympics a successful global event.

Trade in these sectors, as a part of the Olympics and the rapidly growing China economy, would have been tougher had China not joined the WTO.

We’re glad to have China as a full partner in the community of trading nations.

This is significant.

• WTO member nations account for 95 percent of global trade.
• And China ... as the 7th largest trading nation on the planet ... ought to be a member and play by the same rules. (Some say China could be the 4th largest trader by the end of the decade.)

New foreign capital is flowing into China.

• Foreign investment in China averages some $40 billion a year. China was the seventh largest recipient of foreign direct investment in the year 2000.
• By contrast, in Japan, foreign investment in 2000 was just $8 billion.

But to make sure these investments count and grow ... to make them improve the quality of life in China ... China’s financial and legal systems must continue on the path of reform.

There needs to be transparency. Companies operating in the global economy need legal protections. All parties must honor their commitments.

Macroeconomics is important, but microeconomics is essential for a successful free-market economy. It matters that the system insists on:

• the rule of law
• a transparent judicial system
• a transparent tax system
• a transparent accounting system
• the sanctity of contracts
• transparent and non-discriminatory regulations
• non-discriminatory standards, and
• non-discriminatory customs laws.

WTO requires legal consistency and fairness. This will help develop the rule of law in China. It will help give investors the certainty and confidence to keep investing in China.

This is why we’re pushing China so hard on living up to its WTO commitments, and we will continue to do so.

To drive home the point, I asked my Under Secretary for International Trade, Grant Aldonas, to come here earlier this month.

He told me after his meetings that the Chinese are committed to make good on their responsibilities as a WTO member. We have high expectations that the people of China will meet them.

We want to be supportive in every kind of way that we can, to work with China to help them fulfill their WTO commitments.

As a practical matter, this means two things: monitoring compliance efforts and providing technical assistance.

First, compliance is an absolute with me. I believe all companies should compete on a level playing field. It’s only fair to the people we serve.

I’ll be sure that one of our senior officials visits China once a month. The United States will work with the WTO ... with other countries ... and with the private sector ... to monitor compliance ... and to provide technical assistance.

I know the American Chamber here in China and the U.S.-China Business Council have already done a lot in this regard. And we look forward to doing even more with you now that China is part of the WTO.

We’re doing a lot in my Department, as well, and I will tell Minister Shi tomorrow about our continued interest in and commitment to working with China on technical assistance.

I may be an optimist. But I’m also a realist. I know there will be bumps in the road.

Our recent decision on steel imports has caused quite a stir — here in China and elsewhere.

But there has been some real misunderstanding about that decision. The fact is, this is a simple matter of enforcing U.S. laws, consistent with the rules of the WTO.

We went through a very thorough, transparent and legal process. The International Trade Commission found there was injury to our industry. So we took appropriate action, as allowed by WTO rules.

Furthermore, the 201 decision is just one piece in a comprehensive 3-part plan that President Bush launched...a plan that attacks the steel problem at its roots. A plan that leads to a truly competitive world market — where every producer of steel from every country competes on a level playing field.

America will honor the trade deals we sign around the world. But we will also enforce our trade laws. The American people have entrusted the Bush Administration with this responsibility. We would violate our trust with the American people if we failed to do so.

To me, this is critical. I believe when you make a promise, when you shake hands on a deal, a man’s word is his bond. I learned this early in my career as a Texas oilman. I call it handshake capitalism — where mutual trust matters.

And I’m not just talking about deals made with our trading partners.

I’m putting a lot of energy into telling the American business community that you can’t have genuine ethical leadership without trust ... that you will not prosper in the long run unless there is mutual trust.

It really gets down to the leaders of companies ... and the leaders of nations ... doing the right thing, for the right reason.

Honesty, integrity, good ethics and trust are basic principles and musts for a successful free-market economy.

During my trip, I also want to take a look beyond the commercial relationship.

As I said, trade can be a force for good, and a force for goodness. So I plan to visit some projects where U.S. companies have been good corporate citizens.

Tomorrow I’ll be visiting a school where IBM has donated computers for its Kid Smart program. It’s just one of 50 schools IBM is helping across China.

In Shanghai, Children’s Hospital is a place I will also visit. It’s a hospital for critically ill children, supported by major funding from U.S. firms.

Such companies as Johnson and Johnson ... Motorola ... and Applied Materials who are on our trade mission ... and many others are doing good works. These good works will continue because they are part of the heart and soul of the American volunteer spirit. America thrives and finds its strength in helping others.

Let me end on this. All of us are here because we see opportunity in China.

China’s economic progress in the last 20 years has been nothing short of remarkable.

• The World Bank said recently that China achieved in two short decades what has taken other nations two centuries to achieve.
• Over 200 million people lifted out of poverty ... a country that knew economic scarcity now boasts surpluses.

I believe the underlying problems that touched off the 9/11 terrorist attacks give open trade a new urgency. The need to integrate the world economy is more obvious than ever before.

There is too much poverty. There is too little freedom. And there is too little economic opportunity and too little hope in too many parts of world. All this breeds instability.

Open trade can change much of that. It can compel bad governments to change for the good.

Over the years, trade has helped nations as diverse as South Korea and Chile and China ... to replace despair with opportunity and hope for millions of their people.

Trade brings new technology, new ideas and new habits. And trade brings the expectation of freedom and opportunity.

Trade missions like this one point to the vision of how trade is about more than commerce. It is about fulfilling the dream of peace and prosperity.

What we do here this week ... the new relationships we forge ... the new investment we bring, will help make the dreams of more and more of the Chinese people come true.

And in turn, they, too, will be doing their part to foster a world of prosperity and a world of peace. I can think of no greater goal and no greater dream.

We came to China with great hopes. I know we won’t be disappointed.

Thank you very much.