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Economic conditions

China's Senior Bankers Urge US to Foster Sound Investment Environment

Strategic Insights

— 1 min read

China's senior bankers, including Guo Shuqing, chairman of the China Construction Bank Corporation, and Wu Xiaoling, vice-governor of the People's Bank of China, have called on the US government to create a favorable environment for Chinese investors to deepen economic ties. They argue that the imbalance of mutual foreign direct investment (FDI) is a major economic challenge faced by the two countries, which affects the global economy. The bankers stressed that the US should re-evaluate trade disputes and ensure that Chinese investors enjoy national-standard treatment, which is currently not the case.

Key Takeaways:

  • Guo Shuqing, chairman of the China Construction Bank Corporation, and Wu Xiaoling, vice-governor of the People's Bank of China, urged the US government to create a sound environment for Chinese investors to deepen economic ties.
  • The imbalance of mutual FDI between the two countries is a major economic challenge, with US investors having invested around $60 billion in China, while China has invested little in the US.
  • The different investment policies have resulted in a mutual investment imbalance, with Chinese investors sometimes not receiving national-standard treatment.
  • The unfavourable trade measures are not only harmful to Chinese companies but also US investors in the long run, as all economies closely interact with each other, especially those of China and the US.
  • Guo warned that appreciation of China's currency, the renminbi, is not a promising way to solve the trade problem, as China's trade has a re-export pattern.
  • US Ambassador to China Clark T. Randt emphasized that the Bush administration welcomes FDI and will gain mutual benefit from it, but also acknowledged that some regulations had to be enforced for "national security" reasons.
  • The three-day symposium is an annual event jointly organized by the China Development Research Foundation and Harvard University, aimed at building a new financial system.

Statistics:

  • US investors have invested around $60 billion in China.
  • China has invested little in the US.
  • China's trade has a re-export pattern, accounting for a significant portion of its trade.

Sources:

  • "Beijing, June 26 Asia Pulse - China's senior bankers have urged the US government to create a sound environment for Chinese investors to deepen economic ties."
  • "XIC 26-06 1451"

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