Q: Please give us a history of CPITSH.
A: The CPITSH was established in November of 1956, in order to develop the worldwide promotion of Shanghai in all areas of the economy, with the goal of promoting investment, economic cooperation and activity, and dedicated to creating channels of communication. In accordance with the motto "As the people promote government officials, so the economy promotes the government,"it was to lay the groundwork for foreign diplomacy and foreign trade and open up a new path for Chinese foreign relations.
Q: Does the CPITSH have a close relationship with the American Chamber of Commerce?
A: We have a great many occasions for communication. We have a special department just for American issues. We want to serve as a bridge for American businesses to invest in Shanghai and for Shanghai businesses to invest abroad.
Q: Can you offer us some statistics on Shanghai's foreign trade?
A: The main data concern ports, harbors and docks. There are five main ports: Hong Kong, Singapore, Shanghai, Shenzen and Pusan. Shanghai local import-export accounts for about half of the import-export of these five. In 2005, Shanghai import-export totaled $186.35 billion, a growth from the previous year of 16.5 percent; $90.72 billion of that was from exports, $95.63 billion was from imports. Respectively, this was a growth of 23.4 percent and 10.5 percent from the previous year.Asia is Shanghai's largest trade market.In 2005, total import-export with Asia reached $383.99 billion, a growth from the previous year of 18.1 percent. North America is the highest ranking market, with exports totaling $24.71 billion, a growth of 27.8 percent.
Q: Can you give us an overview of trade figures between U.S. and Shanghai?
A: America is Shanghai's biggest trading partner. Last year, trade with America reached 22 percent of total trade. In 2006, from January to September, there has been a growth of 23 percent. America has more than 5000 investment projects in Shanghai, totaling $10 billion. That's a quarter of the total foreign investment in Shanghai.
Q: Please give us an overview of Sino-U.S. trade development and future expectations.
A: The overall trend of Sino-U.S. trade development is promising. There are problems, but this won't have a big effect on the general trend. A lot of products found in America are produced in China. A lot of American films are featured in the Chinese market, and there are a lot of films that are joint ventures between Americans and Chinese. Chinese kids love KFC, McDonald's and Coca Cola.China enjoys a great productive capacity. America has a great consumption capacity, so development will only get better.The existing Sino-U.S. difficulties are intellectual property, the exchange rate and the trade deficit. The problems should be viewed calmly and rationally. Actually, from the economist's viewpoint, trade deficits over a short period of time are perfectly normal. Regarding Sino-U.S. outlooks and reflections, both countries should take the long-term view and make a levelheaded analysis.
Q: From my point of view, the most crucial issues for the Sino-U.S. trade are the revaluation of the Yuan and the deficit with China. I think they can and should be dealt with by the two governments in a step-by-step and harmonious manner.Can you take a moment and address these two difficult areas.
A: The trade deficit is a statistical issue; both sides' statistics are subject to inaccuracies. Objectively speaking, this is caused by different trade needs.One relevant area is goods produced by joint ventures. Two-thirds of processing is for export, intermediary processes. Sometimes profit is not the biggest factor.China increasingly strives to, in accordance with its admission into the WTO, cut taxes from 15 percent to 9 percent. We are strengthening openness and transparency and increasing imports. Each year, we send a delegation to the U.S. for purchasing and contracts. We will always strive to reach a balance. But the U.S. still has restrictions on us; this has an effect on the deficit. From the standpoint of history, one country having a trade deficit with another is utterly natural. For example, there have been times when China and Japan have experienced trade deficits. This is trade; profit is the main motivating factor. Also, nowadays a lot of American goods are manufactured or processed in China. Nike is made here and sent for sale domestically; the price is cheaper. So appearance and form are not necessarily the same. So this has an effect, but the profit goes to the boss of Nike anyway. Investment and commerce are interconnected and natural processes.The Chinese government remains highly active in looking for ways to handle the surplus satisfactorily.
Q: So in regards to proactive measures to correct the surplus problem, in your view, which American products or industries have an advantage in the Chinese markets, and should they be undertaking sales campaigns?
A: Most regular people look to America to purchase things like Polo shirts, vitamins, fish oil, medical devices, fitness equipment and so on. For a long time, American products were not exhibited here. Americans should take a greater role in China's development, carry out sales campaigns and display at expos here in Shanghai.
Q: Some of our American readers have a lot of investment in Shanghai. Your government has tried its utmost to attract overseas business. Explain for our readers Shanghai's investment environment and why foreign businesses want to invest in Shanghai.
A: The reason why Shanghai is attracting foreign investment is that Shanghai's work force is highly educated and knowledgeable. When planning overseas investment, it is necessary to consider labor resources. This is a main reason why financial businesses come to invest in Shanghai. Of course, convenient transportation, a safe city, efficiency of government agencies, as well as other obvious factors are what attract so much investment in Shanghai.
Investment in technological, or in brand name production are especially encouraged in Shanghai.
Q: Foreigners in Shanghai all speak positively about the living environment, work environment and investment opportunities.The biggest complaint I find, though, is air pollution.I'd like to know what plans industry and the government have for addressing this.
A: You're very correct. The central government and local governments are very concerned about this problem. Every year they are extending enforcement of pollution reduction targets. Every year there must be a 4 percent reduction in emissions and a 2 percent reduction in particulates. The Tenth Five Year Plan achieves these goals every year. The central government has the same policy nationwide. In this, America should act as a leader and an example, as it has more know-how and experience.
Q: The 2010 World Expo is getting closer; do you think the expo is going to be more of a business opportunity or a huge logistics task?
A: The World Expo will stimulate investment, increase income, produce 21 billion Yuan in demand and create numerous business opportunities. At the same time, it will bring growth to peripheral areas of the economy. The World Expo will help renew the city, and it's a perfect way to accelerate activity. It will also step up the pace of business development. The expo will vigorously promote new facilities, and elevate the level of the service industry.For the CPITSH, the 2010 World Expo is a difficult undertaking but a huge business opportunity.
Q: In closing, I'd like to ask you to offer some advice to ViaMei's readers and people working in and dealing with Sino-U.S. endeavors.
A: First, in regards to those involved in Sino-U.S. commerce, involved in promoting communication between the two nation's governments and economies and making valuable contributions, let me offer my thanks. Because it is only through your efforts that Sino-U.S. relations can enter a better phase. I also believe that the work is very meaningful, it continues to deepen economic and interaction, and also deepens cultural understanding and understanding in other important areas. I hope we can continue and maintain expansion - keeping in mind the long term - and strive to work harder, face problems head-on and settle disagreements calmly. Everybody should find rational and reasonable solutions. We must trust fully in this process, and move towards a fuller understanding and stronger communication. In our common effort, we must expand interaction and communication, including between San Francisco and Shanghai.We must push forward to an ever improving relationship.
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