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Improving Supply Chains by Enhancing U.S.–China Relationships

Seeking advice on how to improve the delivery of goods, a delegation from China met with Department of Commerce officials in November.

by Ana M. Guevara and Bruce Harsh

Connecting businesses and customers around the world, moving hundreds of thousands of shipments of goods and documents efficiently, and employing numerous workers worldwide will take better communications and improved supply chain management processes. Such improvements are particularly important for the U.S.–China commercial relationship, which is a significant percentage of world trade, and are vital to the economic growth for businesses in both the United States and China. To nurture this relationship and to improve market conditions, the Department of Commerce has been meeting with delegations and business representatives from China for the past several years. The delegations have come to the United States to learn more about improving the ability to move goods more efficiently. U.S. companies, with the aid of Department of Commerce officials, have also been providing workshops in China to better educate government officials and business representatives about logistical matters.

Logistical Issues Influence All Goods and Services

Logistical issues affect all goods and services that move to and from the United States and markets abroad. An efficient and well-developed transportation and freight infrastructure is essential to the continued competitiveness and economic growth of U.S. industry. However, costs and delays associated with logistics services are increasing competitive pressures on U.S. firms. Infrastructure pushed beyond its capacity erodes both the efficiency of U.S. imports of production inputs and the global competitiveness of U.S. exports.

With the growth of China as a consumer market, the development of a more robust logistics system in China will be very beneficial to the economies of both countries. The goals of U.S. companies seeking to sell their goods inside China will be facilitated by an open and transparent regulatory regime for logistics.

Commerce Experts Supply Important Links

In November 2006, a seven-member delegation of officials from the Chinese People’s Political Consultative Conference (CPPCC) visited the Department of Commerce to learn how the U.S. government addresses supply chain and logistical matters. The CPPCC is a political advisory body to the Chinese government that makes recommendations on a variety of topics. China is considering drafting more logistics regulations and wants to determine whether its proposed regulations are addressing the right issues.

The delegation received detailed information from Ana M. Guevara, deputy assistant secretary for services, and her staff in the Office of Service Industries, as well as from the Department of Commerce’s Office of China, regarding major U.S. government rules that regulate the U.S. logistics industry. The delegation also received information on how to develop more open and transparent regulatory systems. Enhanced cooperation between the United States and China will reduce regulatory burdens that decrease the efficiency of supply chains, transform logistics infrastructure to world-class standards, and help U.S. companies better compete in China.

Building for the Future

The Department of Commerce will continue to advocate for other governments to make their regulatory practices transparent, and it will share its understanding of governments’ involvement in the supply chain process around the world. That sharing will allow U.S. companies to better manage their supply chains, thereby lowering costs while helping prepare for more contingencies as the companies move goods and services across longer chains.

Ana M. Guevara is the International Trade Administration’s deputy assistant secretary for services. Bruce Harsh is the International Trade Administration’s specialist for distribution services and supply chain matters.