Ambassador's Speeches and Articles
Jon Huntsman
U.S. Ambassador to the People’s Republic of China
Press Conference
Shenzhen
Wednesday, June 23, 2010
Ambassador Huntsman: I’m here with Brian Goldbeck, our Consul General at Guangzhou who oversees this region. We just finished a rather unprecedented conference on intellectual property rights in which we had participants from the American business community, the Chinese business community, the South China Chamber of Commerce for a conversation about [inaudible] intellectual property rights protection and what it means to innovation.
I’ll just go ahead and open it up to the floor for any questions you have at this time.
Press: [Question about minimum wage and rising labor costs]
And another point is we’ve seen the Chinese currency gaining more and more value recently. Do you have appreciation [inaudible] pressures on Chinese exports? This will also probably affect the recovery of world economy. What do you think of it? Thank you.
Ambassador Huntsman: I’m going to leave the currency question to the Treasury Department.
On the labor front, this is an issue that management and labor are going to have to work out with individual companies. But I think it also speaks to the reality that you’ve got a new generation of workers coming up in China who are for the first time accessing things beyond your borders with respect to fair labor practices, labor rights, and wage rates. I think with the in-flow of this kind of information, access to information, with 400 million internet users in the country, there is probably a much more robust [inaudible] today about expectations on shop rules and management. And those who run the manufacturing facilities, the businesses, are going to have to be tuned into that, and no doubt those conversations are taking place.
Press: [Question about U.S.-China interaction at G20 Summit in Canada]
Ambassador Huntsman: We’ll have to wait until the press conference from the G20 in Canada, but I’m guessing a bilateral will be held between President Obama and President Hu Jintao. They’re going to cover a range of issues including the respective economic transformations that are taking place here in China for which the currency adjustment, the exchange rate flexibility, will be a big part. Also the economic transformation that is taking place in the United States and our desire to export more. And increasingly we’re seeing our exports on the rise coming to the China market, quite a bit more than say the rest of the world.
But I suspect in their bilateral meeting they’re also going to touch on North Korea and the way forward in the UN Security Council. And I suspect they’re going to touch upon a range of other bilateral issues. Clean energy and climate change.
But we’ll have to wait for a read-out from that bilateral as soon as they’ve had it. I wouldn’t want to guess in advance what might be covered in that meeting. Having attended the most recent bilateral during the Nuclear Security Summit, they had a very robust and frank discussion for 90 minutes on things that many people might not have predicted. They’re developing a very good relationship based on respect, where all the issues have been talked about and we’ll have to see what [inaudible].
Press: Ambassador, Tom Mitchell, Financial Times.
With respect to the labor strikes we’ve seen recently, I was wondering whether or not you think this shows the need to have independent trade unions in China, independent of the ACFPU. And also whether or not the State Department is doing anything in terms of exchange programs to, I don’t know, bring sort of labor and union exchanges, American unions to China to meet with ACFPU and other workers.
Ambassador Huntsman: I’m going to ask Brian to take a cut at the answer here because this is the area that he represents, but most of all this is an issue that we’re tracking through our economic sections, trying to see the extent of it, if it’s isolated in just a facility or two, or whether it’s more widespread. We really don’t have an answer on that.
But we will provide whatever tools might be needed, whether there are some offices within the Labor Department recently here to attend the Strategic and Economic Dialogue that might be used, the Chamber of Commerce here, the South China Chamber of Commerce, would be part of looking at the situation, making recommendations as well, based upon what some of the member companies are looking for.
But I think this is realistically a situation that does speak to workers who are accessing information from the rest of the world and increasingly are demanding, based on where the Chinese economy is going, and that is a message that managers and owners are increasingly going to have to tune into.
Brian, let me turn it over to you, if there’s anything specific you’d like to say.
Consul General Goldbeck: Thank you, Ambassador. I don’t have too much to add to that, but I guess what I would just say is that for U.S. invested firms here, they bring with them the requirements that they have in our home nation and those traditions of respect to relationships with labor, between labor and management.
The U.S. firms that I’ve met with here in the southern part of China, they talk about the relationship that they have, the dialogue they have with their labor organizations. And as the Ambassador said, there’s I think going to be increased interest on the part of employees looking at the whole range of things from their direct compensation levels, but also things like safe working conditions, environmental protection. These are all the kinds of concerns that American firms embrace as part of their tradition from the United States and bring with them to the factories here in South China. Thank you.
Press: Thank you, Mr. Ambassador. Welcome to Guangdong Province. I am from TV 7.
A few days ago the People’s Bank of China decided that RMB exchange rates should not only [be tied] to the U.S. dollar, it should be tied to a basket of currencies given its close ties to a number of treaty partners. So what is your view on the exchange rate issue? Thank you.
Ambassador Huntsman: I’m just not going to comment about the decision made on the currency. I like my job, I want to keep it a little bit longer.
The decision was just made after a lot of careful deliberation, consideration on what best serves the needs of the Chinese economy longer term. Let’s let this play out. As Secretary Geithner has said, he welcomes this policy announcement, and it’s all going to be in the implementation from here. People are going to watch it very very closely to see the short term impact, the long term impact, and if certain imbalances might be addressed over time. Thank you.
I’d like to say something about intellectual property protection, because that’s the reason that we’re here. I gave a speech yesterday at Beijing University Transnational Law School. It’s been on our minds for quite some time.
The reason we’re here is that Shenzhen, being the remarkable city that it is, coming out of nowhere [after] 30 years, has an opportunity to really engage in best practices as a destination that protects intellectual property rights in the name of future innovation. What is unique about our approach this time, and again this is an issue that I’ve worked on for a very very long time, having been in a number of positions in government. We’ve made incremental progress over the years, but I think we have an opportunity now to make significant progress during a short period of time by engaging local Chinese entrepreneurs and local constituencies that simply didn’t exist 20 years ago.
So in a most unprecedented fashion this morning we got together, members of the American business community and the Chinese business community, to talk about something that’s never been talked about before between the two groups. It’s typically where the American trade negotiators come in and they knock on the door of Chinese officials and try to get movement on intellectual property rights. And it’s been incremental, to be sure, from the beginning, but today’s discussion really did reflect a desire of Chinese businesses and entrepreneurs to begin taking up this issue, reflecting their desire to want to move forward under the banner of innovation which will be a very very important future chapter of China’s economic history.
So we hope that through what we have started this morning we’ll be able to create a pilot project that includes both Chinese businesses and American businesses to work with the Shenzhen government on some of the issues that are outstanding on the enforcement side. And if we can get something here to work on a local basis, then maybe leverage up this idea in three or four other destinations around China to do the very same thing.
Press: Mr. Ambassador, Steve Toloken with the trade magazine Plastics News.
I have a question following up your IP talks. Following up what David Han said this morning regarding his bicycle company, to what extent do you think he’s representative in the concerns he raises about IP and China’s representative of American manufacturers’ experience? And he actually was talking about withdrawing R&D investment because of concerns that are so severe.
So do you get a sense that other American companies are reluctant to put significant R&D investment in China because of IPR concerns?
Ambassador Huntsman: I’m going to ask for you to repeat -- I can’t hear a thing in this room with this echo. I’m going to ask you to repeat it one more time, and I’m going to stand a little bit closer.
Press: [Repeat of previous question]
Ambassador Huntsman: I think the sense is, this may be somewhat isolated. I visited a couple of businesses yesterday that are in a relatively high level of research and development technology. The sense is that there is incremental progress that is being made and the trajectory has been pretty good over the last many years. But enforcement has lagged behind.
When you start getting companies that want to move their research and development facilities offshore, that’s a message loud and clear that there must be improvement, particularly on the enforcement side. Investment capital is a coward. It’s going to flee where it perceives there to be risk in the marketplace and it’s going to find a safe haven eventually. I think intellectual property is no different. It’s going to flee where it perceives there to be a risk, and it’s going to land in a safe haven. Sometimes there is not enough of a safe haven in certain Chinese destinations.
So what can we do to move this agenda forward? I think we have a very unique opportunity that is rather unprecedented with the coming forward of a new generation of Chinese entrepreneurs who all of a sudden care about this issue. They care about it because they’re innovators and part of the Chinese creative class themselves, whether filmmakers, whether writers, whether entrepreneurs, they care about how their ideas and their intellectual property is handled and respected.
So I think we have a very unique opening here, and I think historically it’s very good, to begin looking differently at how we proceed with the whole intellectual property rights agenda. And that is not unilateralist driven by the United States, but rather with multiple stakeholders represented by the future of China’s economy as well, who all of a sudden are going to see the importance of intellectual property protection.
But the case you cited, I have not run across many of those examples, but rather people who say that there is enough progress year over year to keep them here. And increasingly, they’re finding a listening ear at the local government level. That’s why I think also you’re going to see the dialogue move perhaps more to the localities. The municipalities and the provincial governments perhaps even more so than ever before, where this discussion has always taken place pretty much at the central government level.
(Speaking in Mandarin) Thank you.
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