AEI with Sec . Lew on US-China Economic Relationship
American
Enterprise Institute
Treasury
Secretary Jacob J. Lew on the US-China economic relationship
Thursday,
June 16, 2016
Key
Topics & Takeaways
-
Advancing U.S.
Interests in China: Lew explained that the Administration
has “aggressively” advanced U.S. interests through the bilateral Strategic and
Economic Dialogue (S&ED), such as by raising its significant concerns with
China’s draft information and communication technology (ICT) regulations for
the banking sector, which he said resulted in a their suspension. Lew
acknowledged that the scope of China’s national security reviews remains an
area of concern to U.S. policymakers, but stated that progress had been made in
securing commitments from Chinese policymakers to narrow their scope.
-
Commitment vs. Action:
On numerous occasions, Lew mentioned China’s commitment to cultivate a more
open economy and deepen its engagement with the global economic institutions.
While he remained confident in the intentions of the Chinese leadership, he
stated that the future of the relationship hinges on three questions, whether
China will: 1) fully implement the ambitious economic reforms that it announced
in a way that decisively embraces the market, leads to greater openness and
produces sustainable growth; 2) view foreign businesses as a partner in
advancing its economic reforms and development; and 3) collaborate
constructively with the U.S. on global governance issues.
Speakers:
Keynote Speech
Jacob
Lew, Secretary of the U.S. Treasury Department
Lew
highlighted the importance of the U.S.-China bilateral economic relationship
and touted the progress made in transforming routine bilateral engagements into
a mechanism that delivers concrete results. Specifically, he pointed to
U.S. efforts to reform the International Monetary Fund’s (IMF’s) governance structure
and the World Trade Organization’s Information Technology Agreement as critical
agreements that deepened the bilateral economic relationship between the U.S.
and China. Lew also explained that the U.S. Administration
has “aggressively” advanced U.S. interests through the bilateral Strategic and
Economic Dialogue (S&ED), such as by raising its significant concerns with
China’s draft information and communication technology (ICT) regulations for
the banking sector, which he said resulted in their suspension. Lew
acknowledged that the scope of China’s national security reviews remains an
area of concern to U.S. policymakers, but stated that progress had been made in
securing commitments from Chinese policymakers to narrow their scope.
Lew
expressed concern about the deteriorating business climate for foreign firms
operating in China, and explained that Chinese policymakers should want to
resolve international investors’ concerns to continue attracting foreign
investment, which is essential to cultivating an innovative society and
sustainable economic growth. He argued that a high-standard bilateral
investment treaty (BIT) would strengthen the business climate for foreign firms
operating in China. He called on Chinese policymakers to put forth a
robust, ambitious proposal to add impetus to the negotiations; without which he
indicated that the agreement will not come to fruition in the remaining seven
months of the Obama Administration.
Lew
also noted the progress made in addressing exchange rate policies over the last
few years. He explained that shifting to a market-based exchange rate
would help rebalance China’s economy and contribute to more a sustainable,
balanced global economy. Lew noted that Chinese policymakers have allowed
the renminbi to appreciate against the U.S. dollar and that its current account
surplus has declined to approximately 3 percent of GDP, and concluded that the
U.S. and China have “come a long way” on exchange rate issues.
Overall, Lew stated that the future of the U.S.-China
bilateral economic relationship will come down to three themes, whether China
will: 1) implement the economic reforms it announced in a way that embraces the
market, leads to greater openness and produces sustainable growth; 2) view
foreign businesses as a partner in achieving such reforms; and 3) be willing to
collaborate with the U.S. on global governance issues.
Question and Answer
Grep
Ip of the Wall Street Journal moderated a question and answer session with Lew.
Bilateral
Investment Treaty
Lew
explained that the size of the BIT is enormous and reaches a large part of the
economy. He praised the progress made as China transitioned to a negative list
system for investment agreements, but caveated the statement with a reminder
that the negative list put forth by China has not been sufficiently ambitious
to complete negotiations. Lew explained that China’s revised negative
list was received by U.S. negotiators within the last 24 hours that it is under
ongoing analysis, and as such he could not yet comment on the latest proposal.
Market
Economy Status
In
response to a question regarding the review to determine whether China should
be treated as a “market economy” by U.S. trade policy officials, Lew explained
that the Department of Commerce leads that review process and will determine
whether that change should occur. He also reiterated the importance of Chinese
policymakers continuing to implement economic reforms to achieve a market
economy status for certain.
Puerto
Rico Crisis
In
response to a question regarding the Puerto Rican debt crisis, Lew explained
that the House-passed bill includes a stay on litigation that will enable the
Puerto Rican control board to put a financial plan in place to avoid
insolvency. Lew cautioned that the significant bond payment due on July 1st
added impetus to the Senate passing the bill. He also lent his support
for the bill and characterized it as the “only chance to save Puerto Rico.”
Brexit
In
response to a question regarding the UK referendum vote on June 23, Lew
explained that he “sees only positive economic arguments for [the UK]
remaining” part of the EU. With that said, Lew reiterated the importance
of the U.S.-UK bilateral relationship which he said will continue whatever the
outcome of the referendum on June 23rd.
Additional
information about this event can be accessed here.
,Blog Tags:,Blog Categories:,Blog TrackBack:,Blog Pingback:No,Hearing Summaries Issues:International/Trade,Hearing Summaries Agency:Special Event,Publish Year:2016
American
Enterprise Institute
Treasury
Secretary Jacob J. Lew on the US-China economic relationship
Thursday,
June 16, 2016
Key
Topics & Takeaways
-
Advancing U.S.
Interests in China: Lew explained that the Administration
has “aggressively” advanced U.S. interests through the bilateral Strategic and
Economic Dialogue (S&ED), such as by raising its significant concerns with
China’s draft information and communication technology (ICT) regulations for
the banking sector, which he said resulted in a their suspension. Lew
acknowledged that the scope of China’s national security reviews remains an
area of concern to U.S. policymakers, but stated that progress had been made in
securing commitments from Chinese policymakers to narrow their scope. -
Commitment vs. Action:
On numerous occasions, Lew mentioned China’s commitment to cultivate a more
open economy and deepen its engagement with the global economic institutions.
While he remained confident in the intentions of the Chinese leadership, he
stated that the future of the relationship hinges on three questions, whether
China will: 1) fully implement the ambitious economic reforms that it announced
in a way that decisively embraces the market, leads to greater openness and
produces sustainable growth; 2) view foreign businesses as a partner in
advancing its economic reforms and development; and 3) collaborate
constructively with the U.S. on global governance issues.
Speakers:
Keynote Speech
Jacob
Lew, Secretary of the U.S. Treasury Department
Lew
highlighted the importance of the U.S.-China bilateral economic relationship
and touted the progress made in transforming routine bilateral engagements into
a mechanism that delivers concrete results. Specifically, he pointed to
U.S. efforts to reform the International Monetary Fund’s (IMF’s) governance structure
and the World Trade Organization’s Information Technology Agreement as critical
agreements that deepened the bilateral economic relationship between the U.S.
and China. Lew also explained that the U.S. Administration
has “aggressively” advanced U.S. interests through the bilateral Strategic and
Economic Dialogue (S&ED), such as by raising its significant concerns with
China’s draft information and communication technology (ICT) regulations for
the banking sector, which he said resulted in their suspension. Lew
acknowledged that the scope of China’s national security reviews remains an
area of concern to U.S. policymakers, but stated that progress had been made in
securing commitments from Chinese policymakers to narrow their scope.
Lew
expressed concern about the deteriorating business climate for foreign firms
operating in China, and explained that Chinese policymakers should want to
resolve international investors’ concerns to continue attracting foreign
investment, which is essential to cultivating an innovative society and
sustainable economic growth. He argued that a high-standard bilateral
investment treaty (BIT) would strengthen the business climate for foreign firms
operating in China. He called on Chinese policymakers to put forth a
robust, ambitious proposal to add impetus to the negotiations; without which he
indicated that the agreement will not come to fruition in the remaining seven
months of the Obama Administration.
Lew
also noted the progress made in addressing exchange rate policies over the last
few years. He explained that shifting to a market-based exchange rate
would help rebalance China’s economy and contribute to more a sustainable,
balanced global economy. Lew noted that Chinese policymakers have allowed
the renminbi to appreciate against the U.S. dollar and that its current account
surplus has declined to approximately 3 percent of GDP, and concluded that the
U.S. and China have “come a long way” on exchange rate issues.
Overall, Lew stated that the future of the U.S.-China
bilateral economic relationship will come down to three themes, whether China
will: 1) implement the economic reforms it announced in a way that embraces the
market, leads to greater openness and produces sustainable growth; 2) view
foreign businesses as a partner in achieving such reforms; and 3) be willing to
collaborate with the U.S. on global governance issues.
Question and Answer
Grep
Ip of the Wall Street Journal moderated a question and answer session with Lew.
Bilateral
Investment Treaty
Lew
explained that the size of the BIT is enormous and reaches a large part of the
economy. He praised the progress made as China transitioned to a negative list
system for investment agreements, but caveated the statement with a reminder
that the negative list put forth by China has not been sufficiently ambitious
to complete negotiations. Lew explained that China’s revised negative
list was received by U.S. negotiators within the last 24 hours that it is under
ongoing analysis, and as such he could not yet comment on the latest proposal.
Market
Economy Status
In
response to a question regarding the review to determine whether China should
be treated as a “market economy” by U.S. trade policy officials, Lew explained
that the Department of Commerce leads that review process and will determine
whether that change should occur. He also reiterated the importance of Chinese
policymakers continuing to implement economic reforms to achieve a market
economy status for certain.
Puerto
Rico Crisis
In
response to a question regarding the Puerto Rican debt crisis, Lew explained
that the House-passed bill includes a stay on litigation that will enable the
Puerto Rican control board to put a financial plan in place to avoid
insolvency. Lew cautioned that the significant bond payment due on July 1st
added impetus to the Senate passing the bill. He also lent his support
for the bill and characterized it as the “only chance to save Puerto Rico.”
Brexit
In
response to a question regarding the UK referendum vote on June 23, Lew
explained that he “sees only positive economic arguments for [the UK]
remaining” part of the EU. With that said, Lew reiterated the importance
of the U.S.-UK bilateral relationship which he said will continue whatever the
outcome of the referendum on June 23rd.
Additional
information about this event can be accessed here.