Remarks at the CEO Roundtable

John Kerry
Secretary of State
Secretary of Treasury Jack Lew, Chinese Vice Premier Wang Yang, and Chinese State Councilor Yang Jiechi
Diaoyutai State Guesthouse
Beijing, China
June 7, 2016

VICE PREMIER WANG: (Via interpreter) Secretary Kerry (inaudible). (Inaudible) welcome to all of you. Welcome to this breakfast meeting. It is a feature of the S&ED program. We have this every year. I always believed that for us to participate in the S&ED, we need to stand high and also be down to earth. Stand high, we mean that we need to look at the overarching long-term and strategic issues. And down to earth, we mean that we need to connect more with the business community. We need to listen to them so that the dialogue can be more result-oriented and pragmatic. I hope that our business people can freely share with us what’s on their minds and provide some suggestions as to how we can promote our business cooperation.

And now, according to our program, I will invite Secretary Lew to speak.

SECRETARY LEW: Thank you and good morning. Vice Premier Wang Yang, I appreciate your remarks. And on behalf of President Obama and all of my U.S. colleagues, thank you for the warm welcome we’ve received here in Beijing and for our constructive discussion yesterday.

As you say, it’s fitting that we begin today’s discussions with leaders from our respective business communities. After all, it’s the businesses on both sides of the Pacific that drive commercial cooperation and provide new opportunities for workers in our two countries. Against the headwinds of lackluster global growth, trade and investment between the United States and China continues to thrive. Direct investment from China to the United States was the fastest-growing source of foreign direct investment in the United States in 2014.

The total Chinese FDI stock in the United States stood at $10.2 billion in 2014, facilitated by the longstanding U.S. open investment policy. We know Chinese firms are making valuable contributions to U.S. growth and employment, and we encourage them to continue to invest in U.S. communities.

Similarly, U.S. firms continue to make significant contributions to China’s economy, bringing with them valuable technologies, ideas, and technical expertise. This is evident in the range of sectors represented here today, including financial services, quality assurance, consumer goods, logistics, and metals manufacturing. Companies such as these help to improve the quality of life of people in both our countries.

However, concerns about the business climate have grown in recent years with foreign business confronting a more complex regulatory environment and questioning how welcome they are here. Our two governments have a responsibility to foster conditions that facilitate continued and increased investment, trade, and commercial cooperation. This means enacting policies that encourage healthy competition, ensuring predictability and transparency in the policymaking and regulatory process, protecting intellectual property rights, and removing discriminatory investment barriers.

These policies are vital as China seeks to build on its economic progress in recent decades. I understand that one of the goals of China’s supply-side structural reforms is to improve the quality of goods and services to meet ever-more sophisticated demands of Chinese consumers. I can think of no better way than to open the door wider to foreign investment so that world-class American firms can bring their expertise and participate more deeply in China’s growth.

Thank you very much for the warm welcome here, and we look forward to the discussion in the hour to come. Thank you.

MODERATOR: (Via interpreter) Now State Councilor Yang.

STATE COUNCILOR YANG: (Via interpreter) (Inaudible.) Secretary Kerry and Secretary Lew, Vice Premier Wang, dear friends, (inaudible) hear from the leaders (inaudible) industries and also the pioneers in advancing the China-U.S. economic and trade cooperation. So I sincerely thank you for the positive contribution you have made to our business (inaudible) and bilateral relations. Since we established diplomatic relations, our two-way trade soared from 2.5 – soared from $250 million in 1979 to 505 – $58.4 billion in 2015, an increase of more than 200 times. Last year China has become America’s largest trading partner. Our business cooperation (inaudible) affordable quality goods and services to people of our two countries and given a strong boost to the growth of our bilateral relations, and our business people should take credit for that. As we work together to build a new model of major country relationship, we hope the entrepreneurs can step up your efforts and play a bigger role. We need to seize the opportunities China actively pursues innovative, coordinated, green, open, and shared development.

We are comprehensively deepening reform, expanding, opening up, and our economy is expected to maintain long-term medium-high growth rates. The U.S. is advancing reindustrialization and cementing its economic recovery. At the same time, our two governments are advancing the BIT negotiations, and this would open up more space and create better conditions and cooperation between our businesses.

I hope you will continue to explore new areas, foster new growth areas (inaudible) cooperation, such as working together in third markets and (inaudible) for new breakthrough (inaudible) in our cooperation. We need (inaudible) but more importantly with results. In a market economy there will always be competition between our businesses, and I hope you can seek cooperation through competition and seek win-win results through cooperation and learn from each other and jointly build a stable business cooperative relationship. We need mutual interests but also friendship. We hope you will always keep your social responsibilities in mind. Businesses need to create more and better products and services for our peoples and expand all efforts to enhance mutual understanding, and serve as the bridge on – for our people-to-people exchanges.

I hope you can make the most of today’s roundtable, have thorough discussions, and contribute ideas to our business cooperation and the bilateral relations. Thank you.

MODERATOR: (Via interpreter) Now next, Secretary Kerry.

SECRETARY KERRY: Well, Vice Premier Wang and State Councilor Yang, Jack Lew, our ambassadors, and distinguished business leaders all, it’s a privilege to be here again and we appreciate very much your joining us here today. Thank you for that.

The S&ED, above all, is an opportunity for us to exchange ideas about how we function more effectively together both on the security side and the strategic side – the security and the economic side, but they really go hand in hand. There’s no way in today’s world of increased globalization, increased competition, a much faster-moving marketplace, voracious appetites and competition – there’s no way to stand still. And I don’t think anybody could have imagined necessarily that 35 years ago, when we really began this relationship in full, that we’d be where we are today doing about half a trillion dollars’ worth of business.

And we talk the talk pretty regularly about the importance of the friendship, the importance of the relationship. The two largest economies in the world are sitting around this table, and they will be the two largest economies, whether it’s in the same order or not, over the course of the next 20, 30 years or more.

So we have a major role to play with respect to global – global economic benefits for people everywhere, obviously. And we have to work through – we really – the need for this is to work through with discussion – with open, candid discussion what the barriers are to being able to fully enjoy all the benefits of this relationship. We’ve made huge, huge leaps and strides forward, no question about it, and this relationship grows stronger. And part of the thesis of this is that as we become more entwined in each other’s shared – and that’s the meaning of shared prosperity – as we both experience the shared prosperity, we have a little more skin in the game from both of us with respect to all the other aspects of the relationship.

So we have to work on the intellectual property. We have to work on transparency and accountability. We have to work on the certainty of the rules of the road. And as every businessperson at this table knows as CEOs, certainty, clarity, evenhandedness, really understanding what the rules of the road are for everybody and equal application of the laws to everybody is critical to the confidence that the marketplace needs for investment and for growth.

So our hope is here today we want to listen to you, and I invite you to be as candid as you need to be if there are things that – I mean, we all know that there are some concerns. For instance, Mr. Vice Premier and Mr. Minister, Mr. State Councilor – we talked about it yesterday about the new NGO law and how that NGO law may have an impact negatively on some people trying to do business – certain kinds of businesses that rely on the input. I think the Mayo Clinic is here as one of the examples of that. In health care there are ways for us to advance, and we want to make sure we have the ability to do it.

So bottom line – we’ve got a lot of colleagues here who are experts who can talk about various parts of this, but we’re here to strengthen the relationship. We’re here to try to get the barriers out of the way and move this process forward as rapidly as we can. And we’re very grateful to experienced, significant business leaders who are here to share their thoughts with us. Thank you.

MODERATOR: (Via interpreter) I want to thank the three representatives for your remarks. Now I will give the floor to our business leaders.