U.S. and Hong Kong
Remarks by U.S. Acting Consul General Matt Matthews
Main Forum
China Overseas Investment Summit
November 15, 2011
Hong Kong
(As Prepared For Delivery)
Thank you. I am privileged to speak to such a distinguished group. I'd first like to thank the Hong Kong China Chamber of Commerce for organizing the China Overseas Investment Summit. The Hong Kong China Chamber is a vital addition to our business community.
It is my pleasure to introduce a new U.S. Government initiative to facilitate direct investment in the United States from across the globe. The program is called SelectUSA, and it will help more Chinese firms to succeed in the United States. As you all know, the United States is a critical market for any firm with global ambitions. What you may not know is that many Chinese firms are already thriving in the U.S.
First, allow me to reiterate the longstanding U.S. policy of openness to foreign investment, a policy that has enjoyed support from both major political parties for decades. President Obama recently underscored this point when he said, and I quote --
"The United States reaffirms our open investment policy, a commitment to treat all investors in a fair and equitable manner under the law, and I encourage all countries to pursue such a policy. My Administration is committed to ensuring that the United States continues to be the most attractive place for businesses to locate, invest, grow, and create jobs."
In short, the United States is open for business!
Next, a few statistics about foreign direct investment in the United States. In 2010, my country attracted $228 billion of FDI, more than any other country. The accumulated stock of FDI in the U.S. is worth $2.3 trillion -- about 16 percent of GDP. These investments are crucial to our economy. In 2010, FDI supported 5.3 million U.S. jobs paying about $400 billion per year in salaries and accounting for 21 percent of our exports.
While FDI clearly benefits the U.S., it also pays great returns to foreign investors. As we all know, with a GDP of over 14 trillion dollars, the U.S. remains the largest economy on the planet, accounting for one-quarter of all economic activity. On top of that, our free trade agreements with 14 other countries provide investors in the U.S. enhanced access to those markets too.
We continue to rank at or near the top of global benchmarks for ease of doing business, and our workforce is one of the most educated and highly skilled in the world. The U.S. market is open to new products, ideas, and innovations, and our intellectual property rights regime rewards technological innovation as well as research and development. About 34 percent of the world's R&D is done in the United States. The World Economic Forum ranked the United States the world's leading country for innovation in its 2010-2011 Global Competitiveness Rankings.
Chinese investment in the U.S., in particular, is growing dramatically. Between 2005 and 2010, China was the fastest growing source of inbound U.S. FDI. Its FDI stock in the United States grew 53 percent a year. Chinese firms have succeeded in sectors as varied as telecommunications, industrial equipment, auto parts, hospitality, and energy.
Let me give you an example. "MVP RV" is a Riverside, California-based recreational vehicle company. For many Americans, recreational vehicles symbolize our country's love of the open road. During the financial crisis, MVP RV's revenues fell dramatically, forcing the firm to lay off workers and close its factory. Thankfully, the company was introduced to Winston Chung, founder of Shenzhen-based Winston Battery, who eventually invested $310 million. As a result, MVP RV is on the road again. The firm now has 250 employees and plans to take on about 1,000 more, with a goal of exporting 10,000 all-electric RVs over four years. This story is one of hundreds I could have chosen that illustrate the mutual benefits of Chinese investment in the United States.
While China's U.S. direct investment is growing fast, it remains relatively small given the size of the two economies and the intensity of our trade relationship. At $6 billion, China's direct investment accounts for only 1% of the U.S.'s total FDI stock. What that statistic shows is that there remains significant room for Chinese firms to increase their direct investment in the United States. We welcome these Chinese firms.
Now, allow me to turn to the topic of Hong Kong. This city has a critical role to play in facilitating China's outbound investment, so it is fitting that this summit is being held here. First, Hong Kong firms have experience investing in the United States. The investment stock of Hong Kong alone in the United States is $11.6 billion, almost double the amount of mainland China.
Furthermore, based on the latest statistics, two-thirds of China's outbound investment already passes through Hong Kong, where the region's economic freedom, transparency, and rule of law diminish the risk of investing abroad. The SAR also boasts a top-tier aggregation of professional service providers, including the local affiliates of American companies that are intimately familiar with the workings of the U.S. economy, are globally savvy, and know how to bridge the Chinese and U.S. business cultures.
Finally, I will close my presentation by highlighting a key, new initiative of the Obama administration. In June of this year, President Obama signed an executive order creating SelectUSA, an inter-agency program to promote and facilitate foreign business investment in the United States. This is big news. In the past, investment promotion in the United States was conducted mainly at the state and local levels, which reflects the U.S. federal system. However, we recognized that to compete effectively and to make the case for the United States as a whole, as an investment destination, we needed an independent, executive level program with interagency responsibilities and participation.
SelectUSA collaborates with state, regional and local governments to provide information and assist foreign investors. Services are provided overseas by U.S. Commercial Service offices in our embassies and consulates around the world, including Consulate General Hong Kong. I hope that you will contact U.S. Consulate General Hong Kong's Commercial Counselor Andrew Wylegala for more information about how we can help.
In sum, the United States' message is clear: We welcome foreign firms, including Chinese ones, to participate in the U.S. economy and reap the rewards of our world-leading and vibrant market. Many Chinese companies are succeeding in the American market. We hope that more Chinese firms will explore the great growth potential we provide them.
We value our partnership with China and Hong Kong and look forward to working together for our mutual commercial benefit. I wish you all great success at this summit. Thank you.
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