China-US economic cooperation goes local

Governors and mayors from both sides reach out to expand opportunities

China's economic growth and its commitment to urbanization and globalization are stimulating Chinese investment in the United States, said officials from both countries on Tuesday.

"Enhanced cooperation between Chinese provinces and US states is an important part of China-US economic relations," said Li Xiaolin, president of the Chinese People's Association for Friendship with Foreign Countries, during the Second China-US Governors Forum in Tianjin.

Li's remarks came as governors of some US states, including California and Virginia, recently led business delegations to China to promote bilateral trade and investment exchanges.

Last Wednesday, California and six Chinese provinces and municipalities including Shanghai, Chongqing, Jiangsu and Shandong signed an agreement to establish the China Provinces and US California Joint Working Group on Trade and Investment Cooperation.

Hanscom Smith, minister counselor for economic affairs at the US embassy in China, said the US is welcoming a new wave of Chinese investment.

"In the past years, we have seen expansionary growth of Chinese investment in the US, and we believe in the potential for even greater growth in the future," said Smith.

Chinese investment in the US generates "win-win opportunities for both", he added.

Vice-Minister of Commerce Wang Chao said during the signing ceremony for the agreement last week that China's investment in the US, especially in sectors such as infrastructure and energy, is expected to see a big rise.

China and the US are each other's second-largest trade partner.

In 2012, China-US trade reached $484.7 billion, close to 200 times the figure when the two sides established diplomatic relations.

China's cumulative outbound direct investment in the non-financial sector in the US reached $10 billion by the end of 2012, while cumulative US direct investment in China stood at $70 billion, according to the Ministry of Commerce.

"We have noticed imbalanced bilateral investment relations", said Li Yong, vice-chairman of the International Trade Research Institution of China.

"China's urbanization and industrialization has created huge potential for bilateral investment cooperation," said Li Yong.

China's outbound direct investment in the next five years is expected to reach as much as $500 billion. In the next five years, China will import commodities worth $10 trillion, and the nation's outbound tourists are projected to reach 400 million.

Li Yong said China's commitment to growth will create jobs and help to stimulate the US economy. "Each investment deal worth $1 million generates 16 to 17 job opportunities," he said.

But government officials and experts expressed their concern over US investment barriers.

Tianjin Mayor Huang Xingguo told the forum:"We really hope the US can remove its restrictions on investment proposals made especially by Chinese State-owned enterprises. We really want mutual trust and equal treatment".