i3 - November/December 2017 - 53

Policy
By Lesley Lopez, communications director, US-China Business Council
G U E ST B LO G

Doing Business in China

recent report by the
US-China Business
Council (USCBC)
sheds new light on what business community leaders have
been saying for years - China
is a key market for U.S. exports,
benefitting the U.S. economy
and jobs, but it should be more.
The growth in services exports ranging
from insurance and banking to travel and
tourism across congressional districts in
the U.S. is a new and significant development, according to USCBC's annual
assessment. Out of 435 congressional districts, 432 had triple-digit growth in service exports to China since 2006. More
than a quarter of districts exported more
than $100 million in services to China in
2015, the last year data was available. Two
districts exported more than $1 billion in
services - NY-10 and NY-12, in New York
City and its boroughs - and another two
districts exported more than $500 million
- CA-33, in the Los Angeles area and
MA-07, around Boston.
Though global trade is slowing, U.S. services exports to China grew more rapidly
than all other major trading partners, averaging nearly 19 percent annually over the
last decade. China was the top services
export market in 2015 for 93 congressional
districts and a top five market for 399 districts. The 6.8 percent growth in services
exports to China in 2015 far outpaced
growth in exports to the U.S. top three
markets: the U.K. (3.4 percent), Canada
(-9.2 percent), and Japan (-5.2 percent).
"Our nation's commercial relationship
with China is complex," USCBC President
John Frisbie said. "Exports to China contribute to America's economy and support
good jobs for American workers. Last year,
we reported that the U.S.-China trade relationship supports roughly 2.6 million jobs
in the U.S. across a range of industries,
including jobs that Chinese companies
C TA . t e c h / i 3

10.4

12.3

14.2

20.8

27.4

32.0

36.9

43.9

46.9

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

U.S. SERVICES EXPORTS TO CHINA, IN BILLIONS
U.S. goods exports to China have grown 348 percent since 2006.

SOURCE: Estimated by The Trade Partnership

have created in America. Though China's
economic growth rate is slowing, it
remains an important market for U.S.
exports and continues to provide growing
opportunities for American businesses,
large and small. Gains in exports to China
are felt widely throughout the country."
Even with these significant services
exports, the U.S. has a small share of
China's market. U.S. goods accounted for
about 8.4 percent of China's total imports
in 2015, trailing behind China's purchases from the European Union, South
Korea, Japan and Taiwan. That market
share represents a decline from 2000,
when the U.S. held a 10 percent share
of China's import market.
The U.S. market share is an even bigger
issue when the expected growth of the
Chinese middle class over the next decade
is taken into account. The number of
Chinese middle-class consumers will
exceed the population of the U.S. by 2026.
U.S. companies may have significant
opportunities to tap into a new and lucrative customer base that can further boost
U.S. employment and economic growth.
Economic data shows that nations trading
closely with China outperform nations
with less integrated trade ties.
"Eliminating China's market access
barriers is a top priority for the American
business community," Frisbie added.
Such changes will be necessary for the
trend of employment and economic
growth to continue.

Achieving that goal requires various
tools. China maintains an array of tariff
and non-tariff barriers that prevent more
American goods, agricultural products,
and services from reaching Chinese
customers - these barriers need to be
removed. One way to do that is through
dispute settlement. The U.S. should continue to bring legally sound, industrysupported cases to the World Trade
Organization (WTO). That will require
funding, so Congress should expand the
resources at the Office of the United States
Trade Representative to build upon the
successful track record of using the WTO
to address unfair Chinese trade practices.
WTO cases are insufficient to address
China's barriers fully, however, so more
can be done to pursue results-oriented
engagement with China designed to
address barriers of longstanding concern.
A high-standard bilateral investment
treaty (BIT) would help address concerns
such as unequal treatment of U.S. goods
and services in China such as investment
restrictions, technology transfer requirements and uneven enforcement of laws
and regulations, including the protection
of intellectual property. A BIT would go
a long way in improving the business environment to ensure that competition in the
market is more fair.

2018

CES Asia will be held June 13-15,
2018, in Shanghai, China.
Visit CESAsia.cn for details.
NOVEMBER/DECEMBER 2017

http://www.CESAsia.cn http://CTA.tech/i3

i3 - November/December 2017

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