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OCR for page 49
BUILDING GLOBAL PARTNERSHIPS:
OPPORTUNITIES IN U.S.-CHINA COOPERATION
Introduction
Dr. Wessner expressed delight at having Anna Borg to speak at
the symposium in place of Under Secretary of State for Economic,
Business, and Agricultural Affairs Robert D. Hormats. Under Secretary
Hormats, ironically, had been called away to travel to China. Ms. Borg,
assistant secretary to the Economics Bureau at the State Department, has
a “distinguished career in the foreign service,” Dr. Wessner said. He
mentioned that when he tried to reach Ms. Borg the previous day to
confirm she could speak on short notice, he asked her office to contact
her on her cell phone. “Their answer was that the White House doesn’t
like people being called when they visit the White House,” Dr. Wessner
said. “I think that gives you some indication of the role Assistant
Secretary Borg has.”
Anna Borg
U.S. Department of State
Ms. Borg said she was happy to be invited to speak at the symposium.
Ms. Borg noted that Under Secretary Hormats has spent a “tremendous
amount of time recently in China” and that many State Department
officials were going to China for an upcoming U.S.-China Strategic and
Economic Dialogues.1 “This is a prelude to that, which occurs in just a
few days.”
1
The U.S.-China Strategic and Economic Dialogue is a series of high-level
bilateral meetings established by President Barack Obama and Chinese
President Hu Jintao in April 2009 to discuss a broad range of issues between the
two nations.
49
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50 BUILDING THE 21ST CENTURY: U.S.-CHINA COOPERATION
Ms. Borg added that it was “very enjoyable to hear about all of the
different innovations that have come out of China and to hear from our
Chinese colleague about some of the thoughts he has in regard to
innovation.”
During the day’s discussions, “we realize that not only do we
innovate, but we innovate very often when we look at challenges that we
face,” Ms. Borg said. “Climate change, energy shortages, disease
epidemics, famine, and terrorism are just a few that come to mind.
Innovation—the development of new ideas and products—is necessary
to offer previously unthought-of solutions to these hurdles.”
As the world’s largest economy and the world's fastest-growing
economy respectively, the United States and China “share an opportunity
and an obligation to work together to promote and protect innovation,”
Ms. Borg said. “Cooperation between the governments of the United
States and China as well as its citizens and businesses are imperative to
solve the problems of today and tomorrow.”
Three key areas where the United States and China should work
together are “creating an environment that favors innovation;
maintaining an open, rules-based trade system; and advancing efficient
and sustainable energy policies,” Ms. Borg said.
To create an environment that fosters innovation, “countries need to
get a range of policies right,” Ms. Borg said. These policies include
education, research-and-development funding, good governance,
transparent regulatory policies, open and competitive markets, and
“policies that allow companies to succeed and sometimes fail.” She said
nations “must also embrace and enforce an intellectual property system
that allows innovators to reap the benefits of their ideas and rewards risk-
taking.”
Intellectual property promotes innovation, Ms. Borg explained.
“Without it there is little or no incentive for companies to produce new
products or services.” Copyrights, trademarks, patents, and trade secrets
that protect creativity, entrepreneurship, and innovation are key drivers
of domestic and global economic growth, she observed. “Therefore, the
theft of IP continues to be a concern. Emerging nations like China need
to rigorously protect intellectual property rights for their own companies
and for foreign companies.” The latter, she added, should be treated
“fairly, just as (governments) would want their businesses treated
abroad.”
The U.S. government would like to work with China’s government
“to ensure that the rights of all intellectual-property holders, such as in
the software, pharmaceutical, music, and fashion industries, are well-
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51
BUILDING GLOBAL PARTNERSHIPS
protected and that laws are consistently enforced,” Ms Borg said. “We
hope that China shares these objectives and will work with us in
fostering an innovation climate.” She said that such support “will go a
long way in deepening” the two nations’ cooperation in innovation.
An open attitude toward innovation is essential in today’s global
economy, Ms. Borg said. Companies are forming innovation networks
that include other firms, customers, suppliers, universities, and
government institutions around the world. Their products incorporate
technologies from a number of countries and companies. “Rarely are
such complex products based solely on the intellectual property of a
single business or a single nation,” she said. “Nations that fail to protect
intellectual property will find themselves cut off from these dynamic
global partnerships because innovative firms will hesitate to invest in or
form partnerships with countries where their intellectual property may be
stolen.”
China and the United States also must work together to promote open
trade in order to promote innovation, Ms. Borg said. Both nations have a
stake in an “open and rules-based global trading system,” she said.
“There is need for frank discussions between our two countries about
broader constructive trade frameworks supported by generally accepted
rules and international institutions.”
Ms. Borg said she recognizes China has made development of local
creative industries a top priority. Some of the greatest benefits of
innovation, however, come from adopting and adapting the innovations
of others. “The imposition of barriers in the form of performance,
investment, or intellectual property requirements to achieve this goal will
ultimately be self-defeating,” she warned. “In the short run, China's
entire economy will be less competitive when it is denied access to the
full range of innovative products available in the global market. In the
long run, China's own creative industries will be stifled when they are
denied the benefit—and it is a benefit—of international competition and
exposure to new technology.”
The Chinese government’s "indigenous innovation" policies are of
particular concern to the United States, Ms. Borg said. “We applaud
China's goal to become an innovative society by the year 2020,” she said.
But the U.S. government is concerned about the recently introduced
indigenous innovation accreditation system and its requirement that
government purchases be linked to products developed domestically and
Chinese-owned intellectual property. The United States suspects such
policies “constitute a step toward import substitution,” Ms. Borg said.
The United States wants entrepreneurs and researchers in places such
as Silicon Valley and Tianjin to work and benefit together. “That will not
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52 BUILDING THE 21ST CENTURY: U.S.-CHINA COOPERATION
happen if there are restrictive and nationally focused procurement,
standard-setting, or licensing policies,” Ms. Borg said. “Protectionist
policies are unsustainable because they restrict competition and invite
retaliation.”
China and the United States should work together to identify best
practices that encourage innovation, Ms. Borg said. Making it easy for
American companies to operate in China and for Chinese companies to
operate in the United States is essential. Foreign investment into the
United States is becoming “critical to our economic growth and job
creation,” she explained. “As China seeks to increase investment abroad,
we want to work together to ensure a transparent environment consistent
with our regulations and laws.”
She pointed out that China also benefits from foreign investment.
“The United States seeks fair and equitable treatment for our investors
abroad,” Ms. Borg said. “That is the impetus behind our many dialogues
and exchanges.” These discussions are conducted within the Strategic
and Economic Dialogue, the Joint Commission on Commerce and Trade,
and the U.S.-China Ten-Year Framework for Energy and Environment
Cooperation.
The Ten-Year Framework illustrates how the United States and China
can collaborate to advance technological innovation in the energy sector,
Ms. Borg said. It provides a forum to promote adoption of highly
efficient, clean-energy technology and sustainable use of natural
resources. “As the two largest energy consumers and greenhouse gases
emitters, both the United States and China have a critical interest in
adapting to and mitigating the effects of climate change,” she said.
The eco-partnerships that have emerged through the energy
framework and other bilateral dialogues, Mr. Borg noted, have paired
U.S. and Chinese cities, research institutes, and businesses to work on
issues such as clean air and water, natural resource conservation, electric
vehicles, and renewable energy. “Successfully meeting the clean-energy
and climate challenge will help anchor U.S.-China relations in the years
ahead and demonstrate to the world that our two countries can work
together to effectively address global issues,” she said.
In sum, Ms. Borg said, “the United States and China are, in every
sense, building a global partnership.” There still are many areas where
the two nations “must form stronger collaborations and come to
agreement,” she said. “Nevertheless, I remain confident that, over time,
we will continue to expand technological cooperation and collaborative
innovation between our two countries.”
