September 23, 2015

Remarks as Delivered
Dean C. Garfield President and CEO, Information Technology Industry Council
2015 U.S. – China Internet Industry Forum Seattle, Washington

We live in a world where the list of societal challenges is long, and getting longer, but where the collective collaboration between the United States and China is just, say, suboptimal. As a result, we have a dynamic for U.S. and Chinese companies where the lack of engagement on some of these societal challenges creates a dynamic that is as awkward and perplexing as the silence at the beginning of my speech.

Whether we are talking about climate change, or cybersecurity – whether we are talking about creating more inclusive economies where we can fully leverage human potential – or talking about human health – the moral and broader imperative for engagement from China and the United States is clear.

The good news is that the private sector, namely Chinese and U.S. companies, are not sitting by the sidelines waiting for our governments to act. Industries – the private sector from the U.S. and China – are collaborating together to come up with Jetsonian solutions that are not just cool, but that are the cure for many of the societal challenges that we face.

We see it manifested in carbon capture technologies, or electric cars, or hydrogen cars, or high speed rail, that will be the transportation modes of the smart cities of the future. We see it manifested in creative solutions being deployed to ensure that the two-thirds of the world that doesn’t yet have access to the internet can fully appreciate the benefits of all that the internet delivers.

We also see it in the efforts to push the boundaries of computational chemistry, such that we are challenging Moore’s Law and developing medical robots that are the size of a pen that will extend human life.

These innovations, and the manifestations of them, are not simply conjectural. They are real, and are being deployed all over the world, including in the United States and China. We see them at 10,000 miles of high speed rail in China that is connecting the country and creating new opportunities for a more diverse aspect of the population. We see it in the tens of thousands of miles of fiber in the United States that are creating new jobs and wholly creating new industries.

The reality is our work in those areas, though, require the investment and work from the United States and China. As I travel around the world, I often get the question from policy officials, ‘what is the secret sauce to innovation?’ The reality is it’s a secret sauce that is hiding in plain view.

Innovation thrives in an ecosystem where you have open consultative policy processes, where there is arms-length, but meaningful, collaboration between the public and private sector, and where the marketplace—rather than governments – picks winners and losers.

In many respects the United States innovated that secret formula and so is ahead of the rest of the world. But the reality is that many countries are working hard to catch up.

We’re encouraged by some of the steps that we’re seeing being taken in India by Prime Minister Modi. As well, we are encouraged by many of the reforms that are being advanced in China by President Xi and many of his comments most recently about allowing the market to work in China as well. If those reforms do move forward, then the opportunity for collective growth is high. But, there is a big “if.”

President Xi last night in his speech noted that the FDI investment in China is indicative of the compelling nature of global multinationals investing in China and that there isn’t really a challenge there. He is right that the FDI investment is suggestive, but it shouldn’t obscure the fact that there are real challenges in China where the rhetoric and the vision doesn’t meet the reality. We see that in the national security laws in China. And of course, China like the United States, has the right to protect its homeland. However the manifestation of those laws and pending legislation – whether it’s the CDRC regulations directed at the banking industry, or the pending cybersecurity laws, or even the proposed NGO laws, suggest that the goal is more than simply national security and may tip the scales in favor of domestic players in a way that’s unfair.

That is not to suggest that there aren’t things that the United States can do as well to improve. We may be ahead of the rest of the world, but there is work to do here as well.

A good starting place is updating our patents and tax legislation, as well as passing cybersecurity legislation.

There is work to do in both places and I don’t point that out as a way of pointing fingers or platforming problems. I point to it as a way of acknowledging the increasing interdependence of both of our nations. As companies like Alibaba, and Bidu, Xiaomi, go global and see growth in the United States and the rest of the world. And as companies like, many players in the United States, [inaudible] and many of the companies that I represent, endeavor to grow their business in China, the connection and interdependence of both countries becomes even greater.

And so I raise these issues as an acknowledgement of the interconnectedness of our nations and our shared destiny. I raise them as well as an affirmation and encouragement of the need for both the United States and China to engage around the issues that are most challenging as a society today. And as well as a reaffirmation of the commitment of the tech sector to work collaboratively, both in the United States and in China, to drive cures and solutions to the challenges I identified.

And so let me end where others began by thanking our hosts at Microsoft, thanking the Internet Society of China. My hope is that by being here today that I can be a part of the catalyst for an ongoing conversation and that we will move beyond speaking in code and talk to each other directly about the issues that are most pressing for society but also that are most pressing between our nations. If we’re going to stick to our talking points and not address those issues then why be here at all?

Thank you.

Public Policy Tags: Trade & Investment