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Speech by Consul General Zhang Ping at the Export & Trade Round Table

It gives me great pleasure to attend this Export & Trade Round Table. This round table is held under the initiative of Congresswoman Napolitano with the aim to promote sub-national trade and investment ties between the 32nd congressional district and China. I am pleased to see the presence of a variety of business institutions from both sides, including some of the well known companies of China such as ICBC, Minmetals, Hazen, Greenland and two e-Commerce companies, Netease Koala and JD.com. I hope through the discussion today, we will be able to find some synergies and the right road paths that will lead to the further expansion of economic and trade ties between our two sides.

As everyone knows, China-US trade relations are going through some difficulties as a result of US administration’s unilateral imposition of tariff measures on Chinese imports,despite the agreement and consensus reached earlier by the two governments. At present, the trade war involves 34 billion USD of Chinese imports, yet faces a possible escalation if the US administration takes further tariff measures on Chinese imports. We have made it very clear that we don’t want to fight a trade war with the US. However, if it is imposed on us, we have to fight back.

The current trade war is causing negative impact on the normal trade relations between our two countries. It is hurting business interest in many states, particularly those small and medium-sized enterprises that rely on Chinese market both for export and supply of intermediate products or raw materials. As the trade war goes on and the negative impact unfolds, more people are feeling the pinch. Two weeks ago when I was in New Mexico for the NGA summer meeting, I heard many governors expressing concerns over the “instability and uncertainty” which tariff measures have brought to their states’ economy and foreign investment. Similar concerns can also be heard from the business community as well as in the US Congress.

China-US trade relationship is mutually beneficial in nature. This is most noticeable on the sub-national level. Over the last ten years, according to the statistics of the US-China Business Council, 49 US states have increased their exports of goods to China, of which 17 states experienced triple-digit growth. Every US state had triple-digit growth in service export to China, and 31 states had service export growth of more than 300 %. Chinese investment has covered 46 US states, accounting for 98% of the congressional districts. Chinese investment in the US, together with the US exports to China created or supported over 1.14 million jobs in the US.

China is California's largest trading partner, the third largest export destination for goods, and the fourth largest export destination for service. Last year trade volume between China and California reached over 170 billion USD, which accounted for 28.7% of California's total foreign trade. Exports of goods to China accounted for nearly 10% of California's total exports. Over the last ten years, California attracted nearly 30 billion US dollars of Chinese investment.

As far as the 32nd congressional district is concerned, China was the district’s third largest export market for goods in 2016 and the 4th largest export market for service in 2015.

Facts have shown that the trade and investment ties between China and US have brought tangible benefits to many states and helped the economic prosperity and well-being of the local communities. There is too big a stake in China-US economic and trade relationship that we can hardly afford to see it going downward.

What shall we do in the present situation of our two countries’ trade and economic relations?

I think, first and foremost, is that we should voice our concerns and let those who advocate trade war understand the mutually beneficial nature of our economic and trade relationship. Trade war is in nobody’s interest and benefits no one. There will be no winners, only losers. Once the market is gone, it is difficult to get it back. It is better to stop the trade war before it is too late. China will not yield to pressure and coercion. The only way to solve the trade friction is through dialogue and negotiation on the basis of mutual respect, equality, rules and credibility.

Secondly, we need to ensure that the momentum of China-US sub-national exchange and cooperation remains strong and stable. Chinese investment creates jobs and the increase of the states’ export helps the growth of the local economy. It is important that we maintain a friendly environment on the local level where trade and investment opportunities are felt welcomed. In this regard, firm support from the constituency to a better China-US relationship is essential.

Thirdly, we need to be forward looking. We should keep in mind that even if there are many differences between our two countries, we still have extensive common interests. We need to get along with each other in peace and find ways for win-win cooperation.

Looking into the future, China-US economic and trade cooperation has great potential for development. China now is the world's largest automobile market, the largest source of overseas tourists and international students, the largest importer of agricultural products and energy, and the second largest market for medical care and pharmaceutical products.

The further opening of China presents tremendous opportunities to US business community. President Xi Jinping announced in April this year that China would significantly broaden market access, create a more attractive investment environment, strengthen protection of intellectual property rights, and take the initiative to expand imports. Since then, some of the major steps have already been delivered. Tariffs for automobiles and many consumer products been lowered considerably. The revised negative list for foreign investment released late last month substantially eased market access restrictions for foreign investors. In November, China will host the first China International Import Expo in Shanghai. This will be a good opportunity for US companies to promote export of their products and services to Chinese market.

Fourthly, we need to diversify our relationship by putting more substance into it. Trade and investment is just one aspect of the relationship that the 32nd congressional district has with China. Being a culturally diverse place with the presence of large Chinese community, the district has much more to offer. We should develop more exchanges and collaborations in areas of culture, education, tourism, sports, youth and many others, encourage more people to people interactions so as to cultivate friendship and mutual understanding between our two peoples. We welcome Hon. Congresswoman Napolitano, elected officials and friends of various circles in the district to visit China more often.

I hope through our joint efforts, we can achieve more fruitful results from our bilateral exchanges and cooperation. My colleagues and I look forward to working with you.

Thank you.

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