Embassy of the United States

U.S. envoy welcomes rise of confident, peaceful and prosperous China

By Derek Repp
Staff Writer

Washington -- Closer U.S.-China economic cooperation benefits the development of all regions of China and the United States, not just political and economic centers, according to Alan Holmer, U.S. special envoy for China and the U.S.-China Strategic Economic Dialogue (SED).

In a speech at Wuhan University in China released May 21 by the Department of the Treasury, Holmer said, “Free trade and investment between our two countries are in our fundamental mutual interests.”

Holmer acknowledged that this positive view is not universally held in China or the United States.  Noting that there has been a rise of economic nationalism in both countries, he warned leaders against letting such sentiments constrain them from adopting policies that are in the long-term interests of both Americans and Chinese.

The envoy extolled the benefits of free and open trade, saying that, in China, “reform and opening over the past three decades have arguably produced the most dramatic economic transformation in world history.”  China’s dramatic growth, he said, has lifted hundreds of millions of Chinese out of poverty.

In the United States, Holmer said, the further opening up of the American economy has produced many benefits.  He said U.S. exports were responsible for 40 percent of economic growth in 2007 and that global economic integration generates an economic gain of $1 trillion to the U.S. economy yearly.

U.S.-China bilateral economic cooperation is key to continuing the positive trend of openness and integration, he said, and that is one of the principle goals of the SED.

The purpose of the SED is to “create a high-level exchange on investment and to intensify ongoing discussions about a bilateral investment treaty,” Holmer said.  The biannual, Cabinet-level meetings of the SED “present multiple opportunities to share perspectives and clarify misunderstandings.”

As the special envoy to this latest meeting, Holmer detailed what he perceives are three essential functions of the SED that will “enhance our mutual, growing economic prosperity.”

The first, he said, is to keep the U.S.-China relationship on an “even keel.”  He said the direct engagement of the SED will continue to “lessen miscommunication and dispel misperceptions so common in the history of the U.S.-China relationship.” 

A good example of how that works was seen throughout 2007 when a wave of reports surfaced in the United States concerning unsafe food and product imports from China, Holmer said.  As a result of the Cabinet-level SED meetings that year, the parties reached two “landmark” agreements on food, feed, drugs and medical devices.  Those agreements have fostered the "culture of collaboration" needed to build science-based quality into each stage of the manufacturing process, he said. "Our efforts," Holmer continued, "will be further enhanced by progress on other related and fundamental issues, such as rule of law, transparency, and intellectual property protection."

Another function of the SED is to continue to identify and address “forward-looking, strategic areas of critical mutual interest,” including macroeconomic imbalances, financial sector liberalization and transparency issues, according to Holmer.

The 10-year cooperative framework on energy and environmental issues announced at the December 2007 SED meeting is one area where this mutual cooperation is evident, he said. "We will focus on shared objectives, including energy security, lower greenhouse gas emissions, clean water, clean air, clean and efficient transportation, and the preservation of wild and beautiful places."

The final essential function of the SED is continuing to develop a culture of collaboration and trust, Holmer said.  He said the SED, as a new and leading institution in U.S.-China relations, has created useful channels for dialogue among policymakers that engages multiple and diverse government officials in both countries.  The interactions produced by the SED “underscore that we welcome the rise of a confident, peaceful and prosperous China,” he said.

It is important to get the U.S.-China economic relationship "right," he said.  "That means stable, growing, mutually beneficial, and supportive bilateral relations.”

A transcript of Holmer's remarks is available on the Treasury Department Web site.