8/8/2019 Chinese Ambassador Speaks Of Globalizations Promise

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The rise and fall of international energyand food prices also directly affect thelife of the Chinese people. AlthoughChina's GDP is one of the biggest in theworld, its per capita GDP is only 3,700dollars, less than 10 percent of the percapital GDP in the U.S. and rankingbehind 100 other countries. Every year,24 million people need jobs in Chinesecities. China faces challenges from anirrational economic structure, weak sci-entic innovation as well as environ-mental concerns and resource con-straints. The uneven developmentbetween urban and rural areas andamong different regions creates animbalanced economic and social devel-opment. These challenges are becomingmore acute in the context of globaliza-tion.

China And U.S. Alignment Of Interests

In this age of globalization, the inter-ests of China and the U.S. have neverbeen more aligned. We are oneanother's second largest trading partner.China has been the fastest growing mar-ket for U.S. export, and U.S. export toChina has grown by 330 percent over

the past decade. It grew by 33.8 percentin the rst three quarters of this year.The U.S. is the number one source of foreign investment in China, andinvestment from Chinese businesses inthe U.S. also has increased.

Economic and trade ties betweenChina and the U.S. are mutually bene-cial and include the following tangiblebenets to the U.S. First, the rapidexpansion of U.S. export to China hascreated many job opportunities in theU.S. According to U.S. Commerce Sec-retary Gary Locke, for every one per-cent increase in U.S. export to Asia,100,000 new jobs are created. It is esti-mated that between 2001 and 2007,U.S. export to China created 2.57 mil-

lion new U.S. jobs. Research by Mor-

gan Stanley concluded that four to eightmillion U.S. jobs are closely associatedwith China-U.S. trade.

Second, China's export of qualityand affordable commodities to the U.S.not only promotes China's economicgrowth, but also meets the needs of American consumers. A total of over600 billion dollars have been saved inthe past 10 years, according to one esti-mate. One study by the U.S.-ChinaBusiness Council shows that trade withChina has boosted economic growthand lowered the ination rate for theU.S., resulting in an increase of approx-

imately 1,000 dollars in real disposableannual income per U.S. household.Third, investment by Chinese com-

panies in the U.S. has helped to createmany local jobs. For example, ChinaOcean Shipping Company (COSCO)started direct service to Boston in 2002,which saved Bostons port from beingclosed down and preserved 9,000 jobs.

Fourth, for many American compa-nies, China operations are the highlightof growth and, for some, the only busi-ness generating prots. According toAmCham-China's 2010 White Paper onthe State of American Business inChina, 71 percent of U.S. companiesoperating in China made prots in 2009and 91 percent are optimistic about the

ve-year prospects. In 2009, GeneralMotors led for bankruptcy in the U.S.,but its sales in China went up by 67 per-cent, making China its second biggestoverseas market.

Trade RelationsGiven the fact that China-U.S. busi-

ness ties are growing so fast in so manyareas on such a large scale, problemsand frictions are hardly avoidable. Thekey is to address them properly throughdialogue and consultation. There aresome in the U.S. who believe that thetrade imbalance is caused by the under-valued exchange rate of the Renminbi(RMB). In fact, the root cause of thetrade imbalance is structural differences

in trade and investment, not the RMBexchange rate. It is precisely the resultof international division of labor andindustrial transfer in the era of global-ization.

China does not seek trade surplus.China has a surplus in trade of goods,but runs a decit in trade of services.China has a surplus in trade with theU.S. and Europe, but runs a decit intrade with Japan, Republic of Korea andASEAN countries. The majority of China's exports to the U.S. are labor-intensive, low value-added consumergoods. Many of them are no longer pro-duced in the U.S. and would have to be

Chinese Ambassador Speaks Of Globalizations PromiseProviding broad perspective to our cov-erage of China, the Editor offers recent comments from the Hon. Zhang Yesui,

Ambassador of the Peoples Republic of China to the United States.

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History Of The Peoples Republic of China

China has gone through an extraordi-nary journey since it was founded, par-ticularly during the past 32 years of reform and opening-up. Overall, theeconomy has grown signicantly, result-ing in greatly improved living standards,better educational levels and enhancedcultural sophistication for the Chinesepeople.

The average life expectancy is upfrom 35 to 73 years. Illiteracy is downfrom 80 percent to below 3.5 percent.Between 1978 and 2009, China's percapita GDP has grown by over 12 times,with more than 200 million people inrural areas being lifted out of poverty.Globally, China is playing an activeinternational role as never seen before.

Please turn to page 36

Hon. Zhang Yesui

The Globalization ProcessIn spite of the heavy blow to the

world economy by the internationalnancial crisis, the main trend of eco-nomic globalization is unchanged dueto the persistence of three major dri-vers: scientific and technologicaladvances, cross-border trade andinvestment, and international industrialrestructuring. Technological advanceswith environmental protection, newenergy and low-carbon economy, aswell as technology at its core, will con-tinue to drive the new round of global-ization. Response to the international

nancial crisis has given rise to a pro-found industrial restructuring andglobal reallocation of resources.

The effects of economic globaliza-tion as a double-edged sword havebecome more obvious. On the onehand, the worldwide ow and distribu-tion of elements of production hasundoubtedly lowered costs, increasedefciency and further improved overallproductivity. On the other hand, global-ization has aggravated world economicimbalance. There is growing public dis-content and suspicion in many coun-tries, and the mood for trade and invest-ment protection is on the rise. Thus, werecognize the risks of excessive nan-cial globalization.

While pursuing positive develop-ment within China, we also are makingcontributions to the global economy.The Chinese economy has become anincreasingly important engine for worldeconomic growth. It is estimated thatChina will account for more than 30percent of world economic growth in2010. In the wake of the internationalnancial crisis, China was one of thefirst to recover and has played animportant role in promoting an earlyrecovery worldwide.

Integration Into The GlobalEconomy

Since the policy of reform and open-ing up was adopted in 1978, China has

actively participated in internationaldivision of labor and cooperation,attracted foreign capital, advancedtechnology and management expertise,upgraded industrial structure andimproved economic patterns. China'seconomic development over the past 30years essentially is attributable toreform and opening up, but at the sametime, it has also beneted from oppor-tunities presented by economic global-ization.

As China's economy integrates withthe world economy, it is exposed to therisks and challenges associated withglobalization. Fluctuations in the inter-national nancial market have signi-cantly decreased the assets of many

Chinese companies and individuals.

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examines a wide range of legal issuesrelating to India. A few years ago wehosted in Washington, DC a major con-stitutional law conference involvingIndia that featured leading lawyers fromIndia, including Fali Nariman, Abishek Singhvi, and Prashant Bhushan, as wellas lawyers and academics from theUnited States. The center will pulltogether and manage the many differentaspects of our Indian activities, such as

student moot court competitions, stu-dent exchanges, conferences and othercollaborative activities with our Indiancounterparts. Gauri Rasgotra, a lawyerfrom India, served as the rst head of our India Project, and we are delightedthat Rina Pal has now taken over. Thecenter will also look for more opportu-nities for our students in India. Forexample, last academic year, we senttwo of our students to Gujarat NationalLaw University to compete in its mootcourt competition and the team won.Members of the winning team weregiven the opportunity to intern at thelaw rm of Lakshmikumaran & Sridha-ran in New Delhi and Jocelyn Bond of the team is at the rm now. We are send-ing another team this coming year to theGujarat National Law University aswell as a team to the K.K. LuthraMemorial Moot Competition at the Uni-versity of Delhi, Faculty of Law.

Editor: What was the effect of Presi-dent Obamas trip to India?

Karamanian: President Obamasrecent visit heightened the focus onIndia. Mind you, President WilliamClinton and President George W. Bushwere also both highly engaged withIndia, so it is nice to see that PresidentObama is building on the previouslyestablished momentum. An importantaspect of the U.S.-India relationship iseducation. Both the United States andIndia, the worlds two largest democra-cies, have very strong institutions inhigher education. Over the past year,Indias Minister of Human ResourcesDevelopment, Kapil Sibal, has visitedthe United States to discuss collabora-tive educational opportunities. GW Lawhas built meaningful relations withleading Indian law faculties over the lastseven years. We measure our progressby the outstanding Indian students wehave enrolled at GW Law and the qual-ity of the programming and other col-laborative activities we have held withIndian law faculties and lawyers.

Editor: What are your plans for thefuture?

Karamanian: On the IP front, we arelooking in 2011 to host a roundtable thatwould allow for a wider range of partic-ipants with the expectation of a moreacademic treatment of some of theissues. Our hope is that the roundtablewill lead to published papers. We willcontinue with our outreach to the busi-ness community, legal professionals,the universities and other constituen-cies, including members of the NGOcommunity. Also, we are organizingmore activities with our counterparts atIndian law schools, such as exchanges,moot court competitions, and joint pub-

lications.

businessman Vinod Gupta, was instru-mental in establishing the IIT Kharag-pur business school, which is namedafter him. Vin shared in the vision of educating the brilliant graduates fromthe IIT and other scientists and engi-neers from around India in the eld of law, with an emphasis in IP law, so thatthey could be equipped to work aslawyers on IP matters. Once the ideawas dened, we were asked to helpidentify topics for the curriculum at thenew law school and also to help in otherrespects, such as identifying coursematerials and aiding in the establish-ment of the library.

Editor: How has Indias legal profes-sion changed owing to the inux of foreign investment?

Karamanian: This is a very interestingand timely issue due to a recent legalchallenge to the role of foreign attor-neys in India. We are watching with

interest the developments concerningliberalization of the legal market inIndia for U.S. lawyers. India has a veryestablished, sophisticated and large bar.Lawyers in India, like lawyers in theUnited States, are well-versed in manyaspects of business law. A recent articlenoted that the focus on IP law in Indiahas led to the rise of Indian law rmsand lawyers specializing in IP law, andit seems some of them are doing verywell financially. Also, the increasedow of trans-border transactions has ledto a greater interest in arbitration andother forms of alternative dispute reso-lution. We are seeing more of our LLMgraduates from India gravitatingtowards the major law rms in India andworking on matters relating to foreigninvestment. It remains to be seen howthese developments will affect foreignlawyers.

Editor: Based on Raj Davs recom-mendations, a mock trial wasarranged in India with presentationsby U.S. lawyers presenting a patentlaw case before a U.S. judge and juryunder U.S. law and another trial byIndian lawyers before an Indian

judge under Indian law.

Karamanian: Nearly every year wehave held a mock trial the day beforethe IP summit. The audience consists

largely of students from Indian lawschools. The trial is a useful educationaltool as it allows for the comparison of the presentation of a case under U.S.law by U.S. lawyers and then underIndian law by Indian lawyers. It hasbeen interesting to see the similaritybetween the two systems, particularly asto the cross-examination of witnesses.The U.S. delegates have also enjoyedwatching the outstanding arguments bysome of Indias leading advocates.

Editor: Please describe the IndianStudies Center at GW Law and howit interrelates with the India Project.

Karamanian: Its important to have a

full-edged center at GW Law that

GW Law School

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Page 36 The Metropolitan Corporate Counsel December 2010

Chinese Ambassador

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purchased from other countries. Appre-ciation of the RMB will not solve theissue of trade imbalance for the U.S.,nor will it noticeably reduce the U.S.unemployment rate. From 2005 to2008, the RMB has appreciated by 21.1percent against U.S. dollar, but the U.S.trade decit continued to grow duringthis period. This proves that the RMBexchange rate is not the cause of tradeimbalance. China will further advancethe reform of its exchange rate regime,but external pressure can only be coun-terproductive.

The Importance Of Robust China-U.S. Relations

China-U.S. cooperation has assumedgreater international significance. Inresponse to the international nancialcrisis, China and the U.S. have steppedup macro economic coordination,worked together within the G20 frame-work, and made important contributionto economic recovery in both countriesand in the world. We have also had pro-ductive consultation and cooperation ona series of regional and global issuessuch as counter-terrorism, non-prolifer-ation, climate change, the Korean andIranian nuclear issues.

President Hu Jintao and PresidentObama have agreed to work together tobuild a positive, cooperative and com-prehensive China-U.S. relationship forthe 21st century. This has set the direc-tion for our bilateral relations. TheChina-U.S. relationship will grow moresolid and stronger as our two countriesshare more common strategic interestsand cooperate with each other in moreareas.

Core Strategies For China-U.S.Relations

We stand for a comprehensiveapproach to ease the trade imbalancebetween China and the U.S. Both sideswill be losers in a trade currency war. Inmy view, it is of vital importance for usto cooperate in three areas.

First, we must continue to supporteach other's economic restructuring.China seeks to achieve economicgrowth through boosting domesticdemand. The 12th Five-Year Plan,which is being drafted, lays emphasison continued effort to expand domesticdemand, transform the mode of eco-nomic development and embark on thepath of balanced development. The sizeof China's domestic market is expectedto surpass two trillion U.S. dollars thisyear, far more than China's total export.At the same time, the U.S. is changingits high spending, low saving mode of growth. We should support oneanothers restructuring efforts andexplore cooperation in such areas asclean energy, energy conservation andemission reduction, environmental pro-tection, infrastructure and modern ser-vices industry.

Second, we need to increase U.S.

export of hi-tech products to China.China is prepared to further increase itsimport from the U.S.; however, amongour 2008 hi-tech product imports, only6.9 percent were from the U.S. This isout of proportion, considering the U.S.is the leading nation in science andtechnology. U.S. export to China will begreatly enhanced if restriction on high-tech export to China is eased and realefforts are made to promote free trade.

Third, we should encourage Chinesebusinesses to invest in the U.S. ManyChinese companies face obstacles anduncertainties when making investmentin the U.S. We must create a level play-ing eld and encourage more Chinesecompanies to invest in the U.S., whichwill be conducive to job creation andeconomic growth.

Broader Opportunities ForCooperation

Educational and cultural exchangescan serve as an important bridgebetween China and the U.S. At present,120,000 Chinese students are studyingin the U.S. Currently, there are about20,000 American students studying inChina. The U.S. government haslaunched a 100,000 Strong Initiative bywhich it will send 100,000 Americanstudents to China in four years. We wel-come more American students to studyand conduct research in China. I waspleased to learn that University of Nebraska (UNL) president, James Mil-liken, is visiting China. His rst trip toChina represents a major step toenhance exchanges and cooperationwith Chinese universities. I hope thatthe Joint PhD programs, the Joint R&Dprojects and the Confucius Institute thatthe UNL has in partnership with Chi-nese universities will be more and moresuccessful, thus making fresh contribu-tion to the growth of our educational

and cultural exchanges and friendshipbetween our two countries.

Globalizations PromiseGlobal efforts are needed to address

the challenges of globalization. It isnecessary to make globalization moreuniversally benecial, coordinated andbalanced. Global governance withcorresponding rules, regulations andmechanisms that can rise to global chal-lenges needs to be improved. Theestablishment of the G20 provided aunique platform for enhanced globalgovernance. The reforms of the IMFand World Bank are also necessarysteps to improve international coopera-tion.

The Chinese Embassy embraces thecommitment to fostering expansive andproductive China-U.S. relations. Weencourage exchange and dialogue at alllevels, and it is our sincere hope to serveas a bridge for friendship and deepermutual understanding between the Chi-nese and American people. I welcomeall to visit the ofcial website of theChinese Embassy in the United States:http://www.china-embassy.org/eng/,and I encourage all interest in China andChina-U.S. relations.

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