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Forum: overcoming investment challenges between China, US

By LIU YINMENG in Los Angeles | chinadaily.com.cn | Updated: 2019-10-14 05:11
Mike Walter, news anchor for CGTG-America (left), moderates a panel discussion featuring (from second left to right): Martin Maciak, head of the Asia Origination and RMB Internationalization; Lewis Liu, vice-president of business development and strategy at Karma Automotive; Judy Zhu, vice-president of Synear Foods USA; and Stephen Cheung, president of World Trade Center Los Angeles, in an event organized by CGCC in Los Angeles on Thursday. [LIU YINMENG / CHINA DAILY]

Chinese and American business executives, think tank experts, and policymakers tackled obstacles facing smoother bilateral relations at a recent forum.

The Thursday forum, "Chinese Investment in the US: The Path Forward", organized by the China General Chamber of Commerce-Los Angeles, China General Chamber of Commerce-USA, and the CGCC Foundation, emphasized the importance of a stable US-China relationship to the global economy.

The CGCC is the largest and most influential nonprofit organization representing Chinese enterprises in the US.

Even as some attendees addressed the opportunities and challenges in the "up and down journey" of conducting cross-border trade, both sides said they desired continual cooperation and believe there's abundant growth potential.

The two countries did reach a preliminary trade agreement Friday in Washington. The agreement includes China purchasing more American agricultural products, such as soybeans. Other areas of agreement in the 18-month trade dispute include intellectual property, financial services and currencies.

Mike Walter, news anchor for CGTG-America (left), moderates a panel discussion featuring (from second left to right): Martin Maciak, head of the Asia Origination and RMB Internationalization; Lewis Liu, vice-president of business development and strategy at Karma Automotive; Judy Zhu, vice-president of Synear Foods USA; and Stephen Cheung, president of World Trade Center Los Angeles, in an event organized by CGCC in Los Angeles on Thursday. [LIU YINMENG / CHINA DAILY]

"Cooperation is the only choice for China and the US, and a better future could only be achieved through win-win cooperation," said Yuan Hao, commercial consul for the Chinese Consulate General in Los Angeles, who spoke at the event.

Citing statistics from the CGCC 2019 Annual Business Survey Report, published in June, Yuan noted that Chinese companies are committed to supporting growth in the US long term.

Eighty-three percent of the survey respondents cited "growing existing business" as the primary objective in 2019. CGCC's Chinese member companies employ more than 200,000 people in the United States, and nearly half of the respondents said they intend to increase hiring in the next two years, Yuan said.

Kevin Klowden, executive director at the Milken Institute's Center for Regional Economics and California Center, said he is "short-term pessimistic, long-term optimistic".

Klowden, who also spoke at the event, said "many of the main concerns that the US has involves structural change in China".

Yuan Hao, commercial consul for the Chinese Consulate General in Los Angeles, emphasizes the importance of cooperation at a CGCC event on Chinese investment in the US in Los Angeles on Thursday. [LIU YINMENG / CHINA DAILY]

"It's something that is going to involve a lot of back-and-forth, and part of the problem is that, you have President Trump, who is somebody who is very used to strong, intense negotiation. It's who he is, and he likes results quickly. And unfortunately, it's hard to have both a comprehensive agreement and to have an agreement that produces results quickly," Klowden said.

The economist urged both sides to spend more time to try to understand the other: "It's much more important when it's these two countries, because they are the two largest economies in the world, and what the US and China do affects everyone else".

Stephen Cheung, executive vice-president of the Los Angeles County Economic Development Corporation and president of World Trade Center Los Angeles, said that although the US remains a key partner for a lot of Chinese businesses, Chinese investors could look for other trade partners in other nations.

"That is the way that market works; you will find an easier solution, you will find better partners, but really, once you lose your partners, it's very hard to get them back," Cheung said.

Many senior executives of Chinese companies with operations in the US surveyed by CGCC for its 2019 business study expressed concern about the business environment in the US, which they see as less welcoming.

The level of new Chinese foreign direct investment (FDI) in the US dropped drastically in 2018 and early 2019, after exponential growth that started in 2013 and peaked in 2016 and 2017.

Kevin Klowden, executive director for the Milken Institute's Center for Regional Economics and California Center, addresses the audience at an event organized by CGCC on Chinese investment in the US in Los Angeles on Thursday. [LIU YINMENG / CHINA DAILY]

The survey found there's been a nearly 90 percent decline in FDI in 2019 from its highest level in 2016.

The business leaders also indicated that they grapple with the complexity of the regulatory, tax and legal environment in the US.

Despite the challenges, the US remains a key investment target for Chinese companies, with 55 percent indicating that the US market is a top three priority, the study noted.

The Chinese and the US economies represent 40 percent of global GDP, yet China accounts for less than 2 percent of overall foreign direct investment in the US.

"Unlocking the abundant growth potential and enormous economic and social benefits that Chinese investment creates requires an open yet well-regulated market that gives foreign and domestic businesses equal opportunities to succeed," Xu Chen, chairman of China General Chamber of Commerce-USA, CEO of Bank of China USA, wrote in the report.

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