Gala 2019
Photo: Kaveh Sardari
This year's Distinguished Honoree, Robert B. Zoellick offered his remarks on the future of the US-China relationship. Ambassador Zoellick, former World Bank president, US deputy secretary of state, and US trade representative has distinguished himself at the highest level of diplomacy, policy making, international trade and business. While serving in President George W. Bush's cabinet from 2001 to 2005, he completed the negotiations to bring China and Taiwan into the World Trade Organization. As an Under Secretary of State with President George H.W. Bush, Zoellick coordinated the entry of China, Taiwan, and Hong Kong into APEC.
Read Ambassador Zoellick's full remarks here.
Photo: Kaveh Sardari
Guests also heard remarks from Ambassador Cui Tiankai, who called on the US and China to get the basics of their relations right and strengthen communication on strategic issues. He decried the invocation of the Thucydides trap and said the real trap would come from misunderstanding.
Read Ambassador Cui's full remarks here.
Thank you to the following corporate sponsors that pledged their support
Leadership:
Chubb, Las Vegas Sands Corporation, Xcoal Energy & Resources
Benefactor:
Abbott Laboratories, AIG, Air Products, C. V. Starr & Co., The Carlyle Group, Cummins, Dell Technologies, Dow, ExxonMobil Corporation, FedEx, Ford Motor Company, General Motors Company, JPMorgan Chase & Co., The Procter & Gamble Company, Qualcomm, UL, Visa Inc., Walmart, Inc.
Patron:
Amway, Applied Materials, Caterpillar, Chevron, Emerson, IBM, Linde, MetLife, PayPal, TE Connectivity
Supporter:
Archer Daniels Midland Company, The Coca-Cola Company, ConocoPhillips, Corteva Agriscience™, The Walt Disney Company, dōTERRA, Ernst & Young, Hills & Company, KKR, Micron, Microsoft, Moody's, PepsiCo, Inc., Pfizer, Thermo Fisher Scientific, WestRock
Recent Developments in US National Security and Enforcement Trends Relating to China
The US-China Business Council and Paul, Weiss cohosted a breakfast and roundtable discussion on the US Department of Justice’s China Initiative and sanctions, export controls, and anti-corruption enforcement trends relating to US-China business. The event was led by Paul, Weiss attorneys, including former senior prosecutors and officials at the Justice and Treasury Departments, who provided insights on navigating the current regulatory environment. Speakers included Roberto Gonzalez, Mark Mendelsohn, Jeannie Rhee, and Karen King.
Shanghai China Operations Conference
USCBC’s Shanghai Office held its annual China Operations (CHOPs) conference in Shanghai on the fringes of the 2nd annual China International Import Expo (CIIE) on Friday, November 8. The event featured a strong lineup of speakers covering a range of issues, including US and Chinese perspectives on US-China relations, business leaders’ perspectives on the China market, the view from Washington on export controls, tariff mitigation strategies, the corporate social credit system, and the state of China’s economy.
On the theme of US-China relations, speakers from the United States and China both shared an upbeat message that, despite the current pessimistic mood permeating the relationship, the current challenges are not insurmountable. We have experienced highs and lows in our bilateral ties in the past, and our business communities have been the anchors holding the relationship together. This message was corroborated during our panel of member company China presidents who share an overwhelmingly positive view of the opportunities still present in the China market.
This year, the program featured speakers covering topics of top interest to companies with operations in China, including:
- Export controls: Kyle Sullivan, China Practice Lead at Crumpton Group, provided an overview of company risks from export controls imposed by the United States on sales to the China market, including the expansion of the US Entities List. It was emphasized the 14 “emerging technologies” and their licensing requirements expected to be finalized this year, and are a possible risk for companies selling in the emerging technologies space that have sales in China. FIRRMA is currently in the process of defining “emerging and foundational technologies” and is expected to go into effect by February 13, 2020. Companies should make sure their senior management is aware of the risks and possible impact on business should the US adopt more broad controls.
- Social credit system: Kendra Shaefer, Partner at Trivium, provided an overview of China’s developing social credit system and the implications for businesses operating and selling in China. The goal of the program is to come up with a central database to share compliance information and company records—this is called the National Credit Information Sharing Platform (NCISP). This will be a complete list of records from regulators such as Customs, environmental regulators, courts, etc. A risk for companies is that with the sharing of compliance and behavior among regulators, violation with one regulator could lead other regulators making operating more difficult for a company. The most important action for companies is to make sure existing records with regulators are correct.
- Economy and business environment: Dr. Steven Cochrane, Chief APAC Economist, Moody’s Analytics and Dr. Weisen Li, Professor in Economics at Fudan University, shared insights on China’s economy and economic outlook. China is seeing an impact from the US-China trade escalation on economic growth and exports. If there is an escalation in tariffs, there is higher possibility of more significant impact to the US and China economies. US companies continue to have a long-term positive outlook on growth prospects in China, and senior executives from major US companies noted diversification, focus on a “China for China” model, and communication with regulators are all key for long-term success in the China market.
- Supply chain: Tony Tong, Continuous Improvement Manager Asia at AutoZone and Harry Zhang, VP and Greater China Practices Leader at Sandler, Travel & Rosenberg, Limited, shared practical insights about how companies are impacted by tariffs and how they can reduce the impact on their business. Supply chain experts see the US-China trade conflict as a long-term issue that will bring more complexity to supply chains as some suppliers move out of China and others stay, leading to more decentralized supply chains. Regardless of whether a company is in the US or China there are options to apply for tariff exclusions and exemptions. During this process it is important to be comprehensive and present a case for the product’s lack of alternative substitutes and demonstrate the economic and societal impact that would be incurred by having the product tariffed.
For a full list of program speakers, please see the program speaker list here.
Beyond CHOPs, over 40 USCBC member companies attended the CIIE as part of a 192-American-company contingent. The US exhibitors comprised the largest number of country representatives exhibiting at CIIE of any other country, and an 18 percent increase over last year’s attendance. This underscores the long-term commitment that US companies are making to the China market, regardless of broader government tensions.
Get a wrapup on the conference from USCBC's VP for China Operations, Matt Margulies:
Embassy Speaker Series: Minister Li Kexin
The US-China Business Council (USCBC) hosted another event as part of its embassy speaker series with key officials from the Chinese Embassy. This program featured Minister Li Kexin, the second ranking official in the embassy and Deputy Chief of Mission. Minister Li shared an update on the trade talk agreements reached in Washington in early October and developments since then; and China’s economic reform agenda and what specific actions are being taken to address some of the US’ concerns with structural issues such as: market access (e.g. financial service liberalizations), regulatory updates (e.g. sanitary and phytosanitary regulations discussed between Ambassador Lighthizer and Vice Premier Liu He), commitments to improve IPR protection and limit technology transfer (e.g. China’s Foreign Investment Law Implementing Regulations), and willingness to discuss SOE reforms.
Restricting Chinese Companies' Access to US Capital?—Prospects for Legislation or Executive Action
The SEC and PCAOB published notice late last year of their ongoing challenges with Chinese auditing practices at odds with requirements for companies publicly listed on US stock exchanges. Members of Congress have also expressed concerns over this and other issues related to US capital funding Chinese companies. The EQUITABLE Act, proposed legislation in both Houses, would impose stricter limits and conditions on US investments in Chinese companies and on Chinese companies seeking to list in the US. In September, press reports indicated that the White House is considering its own action via an executive order aimed at limiting US capital flows into Chinese securities.
USCBC hosted a roundtable discussion on October 30th with Akin Gump partners Claudius Modesti and Clete Willems to discuss the issues driving concerns among policymakers, proposals to address these issues, and the implications for US-China commercial relations and US business. Mr. Modesti shared his perspective as a former enforcement director at the PCAOB and now as counsel to companies and firms in proceedings involving the PCAOB and SEC. Mr. Willems shared insights as a trade negotiator and international economic law and policy expert. He joined Akin Gump after serving as Deputy Assistant to the President for International Economics and Deputy Director of the National Economic Council.
Amb. James Keith on US-China Relations: A Conversation with James Green from the US-China Dialogue Podcast
USCBC hosted a discussion with Ambassador James Keith on his takeaways from over three decades of diplomatic service and where we are on US-China relations. During his 31-year career as a US diplomat, Keith became one of the US government’s top experts on China, serving as deputy assistant secretary of state for China, NSC director for China, consul general in Hong Kong, and as a political officer in the US Embassy in Beijing. He also served as US Ambassador to Malaysia and has broad experience in Asia outside of China. James Green, a former US official who hosts the US-China Dialogue Podcast series, led the discussion with Ambassador Keith, a recent interviewee. The conversation covered the prospects for continued trade friction and what changes for US ties with China may—or may not—occur after the 2020 election.
The US-China Dialogue Podcast is a series of interviews with former senior US officials about their participation during pivotal events in US-China relations. At this critical juncture, where both the United States and China are rethinking the trajectory of the bilateral relationship, these recorded interviews are being released so that the past decisions of cabinet secretaries, ambassadors, and other senior officials can help a new generation of policymakers grapple with how to interact with China. This series is part of a new effort presented by Georgetown University's US-China Initiative for Dialogue on Global Issues.
Beyond Tariffs: Curbing abuse of US trade laws and moving towards a constructive solution with China
As the costs of the US-China trade dispute and escalating tariff actions continue to mount, the burning question is where do we go from here? How do we deescalate and still address the real concerns around intellectual property rights protection and technology transfer? And what can be done to end the self-damaging ratcheting up of tariffs, and prevent the abuse of US trade laws, including Section 301 and the International Emergency Economic Powers Act (IEEPA)? The US-China Business Council hosted Dan Griswold, Senior Research Fellow and Director of Trade and Immigration at George Mason University Mercatus Center, for a conversation on alternatives to tariffs to move towards a more constructive solution for dealing with China’s unfair trade practices. A trade policy expert, Griswold has written extensively on the benefits of trade and globalization to America, and can share insights on the scope of US trade laws and potential for reform.
AmCham Hong Kong Presenting Craig Allen's US-China Trade Update and the View from Washington
Craig Allen, President of the US-China Business Council (USCBC) based in Washington, DC, shared insights on the ongoing US-China trade talks and the impact on businesses in China. Mr. Allen came from meetings with senior Chinese government officials with USCBC's board and shared insights from the meeting as well as the Washington, DC perspective.
Effective Government Affairs in China: A Look at the New Healthcare Horizon
USCBC hosted a discussion on government affairs healthcare landscape in China on October 23. Li Ye, Vice President, Head of China Corporate Affairs and China Government Relations, at the biopharmaceutical arm of EMD Serono, Inc., offered her view of the rapidly changing healthcare environment in China and discuss the role of government affairs in navigating challenges and capitalizing on opportunities in trade, innovation, IP, and access.
Join Ambassador Craig Allen for AmCham Seminar on Ongoing US-China Trade Talks
Craig Allen, President of the US-China Business Council (USCBC) based in Washington, DC and other expert speakers shared insights on the ongoing US-China trade talks and the impact on businesses in China. Mr. Allen came from meetings with senior Chinese government officials with USCBC's board and shared insights from the meetings as well as the Washington, DC perspective.
President Harley Seyedin also provided a briefing on his October meetings in Washington, D.C.