Assistant Secretary of Commerce and Director General Suresh Kumar
U.S. and Foreign Commercial Service
American Chamber of Commerce in Hong Kong
Monday, November 15, 2010
As prepared for delivery
Thank you, Rob [Chipman], for your words and for all the work you continue to carry out on behalf of the community on the AmCham Board of Governors. It is always wonderful to be back in Hong Kong. This is a vibrant business-oriented city and AmCham as a pillar of the business community has helped make Hong Kong a preeminent commercial hub.
I also thank TDC Executive Director Fred Lam for his vision in developing the “Pacific Bridge Initiative” or “PBI,” and the Commerce and Economic Development Bureau, represented today by Principal Assistant Secretary Candy Yeung, for their support. The Intent we signed just a few minutes ago formally links the PBI to President Obama’s National Export Initiative. Harnessing the power of the Hong Kong trade dynamo, and with allies such as TDC, AmCham and the other major chambers whose logos you see on this backdrop, is what will help make us double U.S. exports and likely treble exports to Hong Kong in five years. Thank you for your support and for your recognition that growing U.S. export transactions in and through Hong Kong is good for Hong Kong’s economy, good for the macroeconomic rebalancing we all seek – AND good for employment in the U.S. and here in Hong Kong.
I arrived in Hong Kong in the midst of the President’s Asia trip, where he has worked extensively with U.S. firms in India and elsewhere in support of his National Export Initiative – which aims to double American exports by 2015. I, myself, am coming from three stops in the mainland where I led a U.S. aerospace trade mission and three stops in India where I led a Renewable Energy Mission. Six months almost to the day, Secretary Locke kicked off a China Clean Energy Mission with some two dozen innovative firms from the USA, who seized the chance to network with many of you in this room. These visits demonstrate the eagerness of U.S. firms to engage in Asia and the Obama Administration’s commitment to inspire and support such engagement particularly amongst our small and medium exporters.
This is my first official trip to Hong Kong as the Assistant Secretary of Commerce and Director General of the U.S. and Foreign Commercial Service. I am delighted to contribute to further strengthening our already important trade relationship.
Trade and investment are areas where this Special Administrative Region excels. They are also the ingredients for prosperity and the palpable energy that all of us see here. While much attention is understandably directed at economic developments on the mainland, the distinct customs space of Hong Kong ranks it as the United States’ 13th biggest export market. Hong Kong is our largest export surplus market, at about US$18 billion in 2009. Extraordinary for a city of 7 million residents.
Our history of collaborating with each other, our track record of export success, and our shared values make Hong Kong a key trading partner and a major part of our NEI strategy.
Today, I would like to share some thoughts about the Obama Administration’s short and long term economic strategy; how the economic recovery policy is serving as a catalyst for significant change across our economy; and how exports is an integral part of this strategy.
The Obama Administration is creating a cycle of innovation with its economic recovery policies: a cycle that focuses first on much needed job creation, but also plants the seeds for investment in technology, education, and sustainability – always with an eye towards enhancing our competitiveness especially for SMEs, so that the best ideas and performers rise to the top. The Administration’s overarching policy aims to transform the American economy, by spurring the innovation that will allow us to create technologies that can build and sustain our competitiveness over time. The Administration’s approach to innovation helps inspire and create newer technologies. Our education policy with programs like Race to the Top, and initiatives from K-12 to community colleges and universities help develop the skills necessary to ensure our long term competitiveness. And to assist American companies commercialize their technologies, the President announced the NEI. Innovation, education and commercialization are the three priorities that will help American enterprise to become more competitive in the years ahead.
My responsibility as Assistant Secretary of Commerce and Director General of the US&FCS is to help achieve the President’s NEI goals by assisting American companies to export to more markets, to reach the 95% of consumers who live outside the U.S., and to expand our global footprint. In other words help America commercialize its technologies, products and services.
I am responsible for trade promotion, and lead a team of 1,500 trade professionals working in 109 offices across the U.S. and 127 offices in 79 countries. These professionals work with companies day in and day out to identify and consummate market opportunities. Here in Hong Kong, they work with business chamber members and the TDC and with the private sector to connect them to the international marketplace, through many of the trade shows here and in Macau. We provide research, counsel companies, advocate on behalf of U.S. business on public procurement projects, and help ensure that our trade agreements are followed and that U.S. companies have free and fair access to markets.
Through Commercial Diplomacy initiatives, we help remove barriers to exporting, something I am pleased to say is less in demand in Hong Kong, one the world’s most open economies. The Commercial Service also leads U.S. federal efforts to attract Foreign Direct Investment or FDI through our Invest in America program. We provide valuable information to foreign investors for all 50 U.S. states. I know that Hong Kong already plays an important role in supporting and facilitating “red chips” and other mainland firms eyeing international expansion. As this trend continues to grow you will want to reach out to our US&FCS teams who can help outbound investors and assist in preparation of seminars or missions.
The National Export Initiative is designed to achieve the President’s goal for America to double exports over five years, to support 2 million jobs in the U.S. and several more worldwide. Executing the NEI calls for collaborations such as the one with the TDC at EcoExpo Asia two weeks ago: this brought 30 U.S. exporters under one “Partner Country Pavilion” that showcased U.S. technology, products and services and produced initial export orders of over $700,000, with prospects of more to follow.
Creative technologies and solutions for today’s urban challenges was at the core of market entry efforts facilitated by US&FCS for a small West Coast firm, Brammo, Inc., to secure “type approval” for a novel, environmentally friendly, all-electric motorcycle. The effort will likely establish the world’s first supplier of electric motorcycles to a police force here in Hong Kong help combat roadside pollution and create several jobs back in the USA.
The Administration’s focus on economic programs and the NEI has helped turn around the worst economic downturn in living memory, but unemployment in the U.S. continues to be unacceptably high. The Obama Administration’s immediate focus continues to be putting Americans back to work even as we strive to transform our economy to be more innovative, competitive, and sustainable. This two-pronged recovery strategy – with immediate focus on jobs and longer term innovation to create sustainable transformation that enhances our competitiveness has been consistent since the passage of the Recovery Act.
The Obama Administration is funding programs to finance and accelerate innovation that may have been considered too risky for industry to undertake independently. For example, the U.S. Department of Energy has awarded the first round of funding for a program to develop 37 transformative research projects in the energy sector. These projects include grid-scale energy storage and ways to harness bacteria to produce automotive fuel from sunlight, water, and carbon dioxide.
America is known for its innovation: our private sector created automobiles and computers that changed the world. Other transformational game changers, the internet and GPS were developed at government laboratories at the DOD. The 37 transformational programs that I reference are currently being developed by private sector companies with government support and stimulus funds.
As President Obama recently said, “part of the promise of America is the idea that if you’ve got a dream and you’re willing to work hard, you can succeed.” To continue to move the U.S. economy forward, U.S. small businesses must innovate, create jobs and expand their global reach to new markets. Hong Kong can be the gateway to some of these markets with its efficient networks, comprehensive and well endowed service sector, and superior IP protections.
To ensure that the U.S. economy moves forward in its recovery, President Obama launched the National Export Initiative. Through the NEI, the Administration has called on Federal Agencies to work together to assist companies by providing access to credit, advocating on behalf of U.S. businesses and connecting them with International Buyers by enforcing our trade agreements and ensuring a level playing field that leads to free and fair trade.
In the first eight months of this year exports have grown by 18% as compared to the same period last year. But, U.S. exports are just 12 percent of GDP – well below that of nearly all of our major economic competitors: Germany exports are over 40 percent of their GDP, Canada’s is 30 percent of GDP, and China’s exports are 25 percent of their GDP.
Through the NEI, we will connect businesses to global consumers and market opportunities. Less than 1 percent of America’s 30 million companies export, and of those companies that do export, 58 percent export to only one country. Clearly we can, and must, do more to ensure that U.S. businesses capture the full potential of economic opportunities that exist internationally.
In the 21st Century economy – technological development, innovation, global trade, and domestic job creation are interdependent. Doubling our exports in five years is both an attainable goal and the right thing to do.
Trade between China and the U.S. has grown 26% to $285 billion in the first 8 months of the year; exports to Hong Kong have grown 29% to 19.4 billion during the same time. There is robust growth but there is more that we can do: American businesses are keen to engage in this region. The Administration is committed to supporting them by connecting them to business in China, Hong Kong and beyond. We have the technology, products, and services that Asia needs to improve lives and livelihoods.
Together with partners in China and Hong Kong, we must explore all avenues to tap this opportunity: from setting up distribution arrangements, to supply and value chains, to newer business models that explore Pearl River Delta arrangements. This is what the Pacific Bridge Initiative that we signed allows us to do.
Expanding global trade through the National Export Initiative provides consumers across the globe access to American products, services and technologies. Through our trade relationship with China, and via frameworks for collaboration, such as the NEI-PBI, which we celebrate today, we can better execute NEI programs to realize mutually rewarding goals particularly in key sectors like renewable energy, healthcare, and information technologies that stimulate job growth in the United States, Hong Kong and China.
The PBI Agreement demonstrates our commitment to work together to achieve the NEI goals that President Obama announced this January. Our collaboration will help connect buyers with sellers, and U.S. technologies, products and services with world markets. By doing this, we serve consumer needs and help improve lives and livelihoods everywhere.
Thank you for having me join you today.
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