After nearly 40 years of rapid growth, China's economy is bigger in size but not sturdy enough. China is still at the lower ends of the global industrial chain, lagging far behind the United States. The Chinese and US economies do have a competitive dimension, but there is far greater complementarity than competition. The two countries have seen the space for cooperation expanded rather than narrowed.
The Chinese economy will continue to grow at a medium-high speed and climb higher on the value chain. As China's traditional industries are transformed and upgraded at a faster pace and emerging industries flourish, there is huge market potential to tap for US exports of advanced technologies, key equipment and critical parts to China. Unfortunately, American businesses have not had their fair share of the "cake" due to outdated US regulations on export control. In 2001, US high-tech export to China accounted for 16.7 percent of China's total import of such products, while last year the percentage dropped to 8.2 percent. For instance, China's import of integrated circuits (IC) amounted to a whopping $227 billion last year, more than the import of crude oil, iron ore and primary plastics combined. But only 4 percent of China's IC import came from the United States. According to an Op-Ed by the Carnegie Endowment for International Peace last April, if the United States were to liberalize its export barriers against China to the same level as those applicable to Brazil or France, the US trade deficit with China would narrow by up to 24 percent and 34 percent respectively.
China now has 300 million people in the middle-income group. The pattern of residential consumption is shifting from basic livelihood to greater emphasis on quality, and from offline to online. Their demand for quality US goods and services is also swelling by the day. Last year, Chinese tourists made about 3 million visits to the United States with a per capita spending of over $11,000, which helped to create 150,000 local jobs. China's online-shoppers number over 460 million. Popular American products such as cherries, lobsters, sea crabs, nuts and health supplements can reach Chinese households within 72 hours. American export to China via e-commerce surged by more than 100 percent last year. The "Gateway ‘17" conference held by Alibaba Group in Detroit last month attracted over 3,000 American SMEs, as they are eager to get a fast ride of the Internet to tap into China's vast consumer market.
The US-China Business Council predicts that American export of goods and services to China will double to $369 billion in the next decade, and rise to $520 billion by 2050. I'm sure any business with vision would value such a huge market and any government with an ambition would value cooperation with China.
This brings me to my third conclusion: there is no limit to the growth of the Chinese market, and China-US business cooperation holds out a promising future.
Ladies and Gentlemen,
Business cooperation is about the give and take of interests, and it's only natural that differences may arise from time to time. There are people both in the Chinese and American business communities who want their own government to dismantle the "barriers" of the other side that block market access, and at the same time build "walls" to keep foreign goods out. We understand that quite a few Americans support "Buy American, Hire American," just as in China there is also voice for "Buy Chinese, Hire Chinese." But it is important that both sides come to realize with cool heads that given the depth of our business cooperation, neither Chinese nor Americans can do without goods from the other country. We both have a stake in the robust, balanced and healthy development of our business ties.
The first China-US Comprehensive Economic Dialogue is slated to open tomorrow. China stands ready to work in concert with the United States to find a solution that benefits both sides and reach the best deal. Both of my dialogue partners were once business leaders well versed in the art of deal-making. Getting down to the nuts and bolts of our dialogue may be painstaking. Hopefully, the outcome will be gratifying.