FOR IMMEDIATE RELEASE
December 12, 2007
MAYOR BLOOMBERG SPEAKS ON COMPETITIVENESS AT FUDAN UNIVERSITY IN SHANGHAI
The following is the Mayor's text as prepared.
"Good afternoon. Thank you, Professor Lu for that kind introduction. It is wonderful to be here in China again, and a great honor to be with all of you today. I want you to know that I bring greetings not only from the 450,000 New York City residents who have roots in China, but also from a person who, more than anyone, helped me get where I am today: My mother.
"She will be 99-years old next month, and I talk to her just about every day. She asked me to say hello to all the Chinese people for her, so on her behalf, and on behalf of our entire Chinese community, it is my pleasure to say Zhongguo pengyou, Ni men hao!
"I was delighted to be invited here to speak - and it's only fitting that I come to Shanghai, because Shanghai and New York have so much in common. Both of our cities are financial capitals, both cities have soaring skyscrapers, both cities have incredible energy and dynamism, and, of course, both cities have some of the world's best restaurants.
"There are more than 2,500 Chinese restaurants in New York City - and I think I've been to most of them. But I want to dispel the rumor that I've come to Shanghai simply because of my great love for soup dumplings. (That was only part of the reason.)
"New York City has so many Chinese restaurants because we are home to more people with roots in China than any other city outside of Asia - and because these New Yorkers are the living embodiment of the American dream. They are more likely than the average New Yorker to have careers as professionals and managers, to own their own homes, and to excel in school.
"Why? Chinese immigrants bring with them a tremendous work ethic and a great respect for education, and they also bring an incredible spirit of entrepreneurship, opening not only restaurants, but businesses of every kind. I admire entrepreneurs. I know how hard it is to take such a big personal risk.
"Before I first ran for mayor, I spent 15 years on Wall Street and then 20 years running the company I founded. The company was based on the idea that we could use technology to deliver better financial information, faster than anyone else. I started with three guys, one coffee pot, and no customers. Today, the company has nearly 10,000 employees with offices in 130 cities across the world - including Shanghai, Beijing, and Hong Kong. The company also expanded into journalism and media - some of you may have seen Bloomberg TV here in China, though I'm sure it's not as popular as 'Win in China.'
"As a businessman and as the Mayor of New York, I have seen how relationships are the key to success - and how the relationship between our two countries has grown steadily closer. That's why I believe that the U.S.-Chinese relationship is a central one. It is critical not just to our citizens, but to the goal of peace and prosperity throughout the world.
"China is the most rapidly developing country in the world. The United States is the most industrialized country in the world. Historically, such competition has led to tensions between states. Yet in our world today, war between two leading states would be catastrophic. Instead, competition must be channeled into cooperation.
"When people think about competition, they tend to think that if one side wins, the other side loses. But geo-politics and global economics are not zero sum games. China and the United States have a mutual interest in seeing each other succeed - and that's why anyone who understands economics recognizes that, for the rest of the world, China is not a threat, but an opportunity.
"A strong and healthy China offers America - and the world - an opportunity to expand the reach of our export markets, to expand our choice of goods and services, to expand our access to capital and talent, and to address challenges that stretch across national boundaries, such as terrorism, global warming, infectious diseases, and poverty. These challenges all require cooperation - and the commitment of both countries to an equal partnership and a respectful dialogue.
"It has become popular in the West to lecture the Chinese on how to address certain challenges, including on matters of trade and the environment. But I didn't come here to lecture. I came here to listen and learn, to share what has worked for America, and to strengthen the dialogue between our countries on the common challenges we face.
"America and China begin this dialogue from different places - and that's understandable for two countries with such different histories. But more and more, we are finding points of agreement - and that's the beauty of market competition: It creates incentives for countries to work together toward mutual success.
"Of course, each of us would like to see the other change some of its policies - that's a natural result of increased contact and competition, and it's why the Strategic Economic Dialogue that Treasury Secretary Hank Paulson has initiated with China is so important.
"But there is another way to convince a foreign government to adopt an idea - Prove that it works! Because when you succeed, your competitors realize they had better follow - or else they'll get left behind. This is what I call 'leading from the front' - and from my experience, it's crucial both in government and business. In the new global economy, the countries and companies that lead from the front in exploring new frontiers will be the biggest winners, while those who fight rear-guard battles to maintain the status quo will be the biggest losers.
"Leading from the front is at the core of an idea I'd like to discuss with you today: Competitiveness. Competitiveness is, as you know, a measure of your ability to succeed in the marketplace. Across the globe, countries will develop different strategies to sharpen their competitiveness, but I believe the most successful nations will lead from the front in embracing six key principles:
"First, opening markets; Second, improving education and training; Third, developing a highly-skilled workforce; Fourth, ensuring investor and consumer confidence; Fifth, investing in infrastructure; And sixth, strengthening the social fabric, which includes protecting public health and the environment. I'd like to touch on each of these principles today and how they relate to both the U.S. and China - and how we can learn from each other in applying them.
"In discussing open markets, let me begin by saying that there is a growing tide of protectionism in the United States - and there must be pressures in that direction here, as well. But in the long run, protectionist policies - and policies promoting economic nationalism - only hurt the industries they are trying to help. Certainly, that was true of American protection of the auto industry and Japanese protection of its banking industry.
"In both cases - and there are many other examples - government protectionism backfired badly. In the long-run, the more government tries to bend the rules of the market, the more likely it is that the economy will eventually snap. Whether it's a bubble bursting, or an exodus of capital, or a collapse of an industry or a currency, no country can escape these market corrections - or their painful aftershocks, which often involve high unemployment and inflation.
"I applaud China's recent decision to end a dozen subsidies that promote exports and discourage certain imports. This is a victory for both of our countries - because both here and in the U.S., it will lead to lower prices for consumers, better products, and more good-paying jobs. I also want to applaud President Hu and Premier Wen for taking some important steps to open up China's capital markets.
"Yesterday in Beijing, I helped open the new office of the New York Stock Exchange, and NASDAQ recently opened offices here in China as well. The decision to allow these exchanges to enter the Chinese market is a positive sign that reform is taking hold.
"Both the U.S. and China can help themselves - and each other - by reducing government intervention in the global exchange of goods, services, and capital. In the U.S., doing this is difficult because it can also lead to some short-term job dislocations.
"That brings us to the second key principle of competitiveness: Improving education and training. Because the way to help those affected by globalization is not to prop-up uncompetitive industries, it is to assist the people who are displaced, and to help workers learn the skills that the new economy demands.
"In both America and China, we face a shortage of highly-skilled workers. The long-term solution, of course, centers on education. To get hired for today's high-skill jobs, students must learn more math, more science, more engineering, and more computer technology. Here in China, you understand this imperative, and you're working hard to make sure the next generation is ready for the 21st century.
"The countries that create the best public school systems - and hold their students accountable for success - will gain a huge advantage in the global economy. In New York, I've seen how Chinese families place tremendous value on educational success - and that's a family value that we need more of in America.
"As important as it is to improve our education systems - and I believe it is an economic imperative - it will take time, both in the U.S. and China. But neither of us can afford to wait for more skilled labor - because the global economy waits for no one. And that's why it's critically important for us to embrace the third key principle of competitiveness: attracting - and retaining - the best and the brightest that the world has to offer.
"America became the world's leading economic nation by welcoming immigrants - and New York became America's leading commercial city by inviting them to stay. Immigrants built our city and country, bringing innovative new ideas to every field - and they're still at it.
"Consider this: Half of the Americans who won Nobel prizes in physics in the past seven years were born abroad; More than half the people with PhDs working in America are immigrants; Revolutionary technology companies like Sun Microsystems, Yahoo, and Google were all founded or co-founded by immigrants. In fact, a quarter of all Silicon Valley companies were started by entrepreneurs from two just countries: China and India.
"But right now, our immigration laws are preventing too many of tomorrow's entrepreneurs from working in America. In fact, some Silicon Valley companies are setting up back-offices in Vancouver, Canada - because it's easier to get foreign workers into Canada than the U.S.
"The U.S. and China are in a competition for talent, and each of us has certain competitive advantages that we can take greater advantage of. The U.S. is a magnet for talent. China is a magnet for capital. In the U.S., our challenge is to open our labor markets to more foreign workers, while in China, it seems the challenge is to open capital markets to more foreign investment - because foreign investment creates the domestic jobs that will help keep educated Chinese men and women from leaving the country.
"In fact, a recent survey of CEOs working in China indicated that the need for skilled workers is their number one challenge. Opening China's markets to more foreign investment will help meet this challenge - because it will create the domestic jobs that will keep more of your most talented citizens from leaving the country.
"A highly-skilled workforce is an essential element of competitiveness, but creating the conditions for stable, long-term growth requires government to do much more. and that brings us to the fourth key principal of competitiveness: Investor and consumer confidence.
"There is a myth in America that investment is driven primarily by tax and wage rates. But if low wages and taxes were the be-all and end-all, we'd be seeing massive international investment in the world's poorest countries. The fact is, investors consider many more factors than just wages and taxes - including all the things I've touched on today.
"They also consider: whether corruption is a typical part of doing business, whether income statements are transparent, whether monetary policy is likely to promote stability, whether effective quality and safety standards are enforced, whether the economy is guided by the free hand of the market or the heavy hand of government, whether you will be able to retain ownership of your ideas and capital, and whether government requires businesses to jump over expensive and time-consuming bureaucratic hurdles.
"The United States has strategic advantages in all of these areas - but we can do more to sharpen them. For instance, we have some of the strongest investor protections in the world - but our regulatory apparatus has become more cumbersome than it needs to be. As a result, more capital that might have come to New York is now flowing to other financial centers, including Shanghai.
"Here in China, I think it's fair to say that some areas of the economy are over-regulated - such as the capital markets, and some are under-regulated, including labor markets and standards for quality, health, and safety.
"In the U.S. right now, we are in the middle of the busy holiday shopping season. Ordinarily, shoppers don't care whether something is made in China or Korea or Canada - they just want the best product at the best price. But, I must let you know, because of all the news about unsafe Chinese toys - whether you think that news is fair or not - some consumers in America are not buying those products. Governments have an economic interest in setting and enforcing high standards to ensure that these types of health and safety scares do not occur.
"Creating economic conditions that promote confidence are essential, because when government policies lead investors or innovators to take their business elsewhere, governments not only lose those jobs - they lose the tax revenue those jobs would create. That's revenue that can't be invested in the future.
"In my experience in both the public and private sector, investing in the future is perhaps the most fundamental element of leading from the front. And that brings us to the fifth key principle of competitiveness: investing in the high-tech infrastructure that the 21st century demands.
"High-speed trains, clean energy, safe water systems, broadband systems, airports that run on satellite technology, ports that accommodate the largest ships. These crucial infrastructure networks are the foundation for success in the new global economy. Without that foundation, countries simply will not be able to support sustained economic growth.
"That's why China is finishing what will be the world's largest airport terminal in Beijing. And I find this achievement especially impressive because the terminal will be larger than all the terminals at New York's Kennedy airport combined. Add to this the 20,000 kilometers of new railway lines China is building, your 'Maglev' train from the Pudong Airport to Shanghai, which I had the pleasure of riding, and the major expansions to your ports, and it's clear that China is making some very smart investments.
"These are exactly the kinds of investments we need more of in America.
"In New York, we're working to secure financing for a direct rail link from Kennedy Airport to Lower Manhattan - because business travelers now demand direct access to central business districts. We're also working to reduce traffic through a 'congestion pricing' system that charges drivers a fee for entering the central business district during peak travel hours.
"Singapore, Stockholm, and London have all successfully implemented similar systems - and I understand the idea is under consideration here in Shanghai. Traffic chokes off economic activity - and global cities can't afford to let that happen.
"Heavy traffic also harms air quality, and that brings us to the sixth key principle of competitiveness: strengthening the social fabric and protecting public health and the environment.
"Both in China and in the U.S., globalization is putting new pressures on everyday life. Many people in both our countries have seen wages stagnate while everyday costs - especially health care and housing - have risen substantially. In America, there is a great deal of concern about rising income inequality - and I understand that's a concern here, too.
"A certain amount of inequality is inevitable, but for economic growth to be sustainable - and for societies to be stable - all people must have the opportunity to share in the benefits. That's the promise of a democratic society, and it's part of the vision that President Hu has outlined for a 'harmonious society.'
"President Hu also rightly recognizes that a harmonious society must include a healthy environment. In New York, we have eliminated tobacco smoke - the leading cause of indoor air pollution - from all indoor workplaces, and we are committed to achieving the cleanest air of any major U.S. city.
"We are doing this not just because clean air is good for public health, which it is…and not just because it will help us do our part to fight global warming, which it will, but also because clean air helps attract talent, and talent attracts investment, and investment creates jobs.
"More and more, both the U.S. and China are thinking about the environment in these economic terms. That's why it's not surprising - but it is encouraging - that the Strategic Economic Dialogue between our countries has resulted in agreements that will promote energy conservation, and spur the development of clean energy technology.
"These two areas - energy conservation and clean energy - are more important now than ever before, because of the scientific consensus on the dangers of climate change. As global economic leaders, and as the world's two largest energy consumers, China and the United States have a responsibility to work together - and with the U.N. - to devise achievable solutions. We can't afford to wait, because as you know, the effects of climate change are already being felt.
"Here in China, for example, the Gobi Desert is expanding at an astonishing rate of 3,000 square kilometers per year. In the United States, droughts and hurricanes lately have caused enormous damage and pain. And around the world, businesses and consumers are feeling the effects of rising demand for oil. At the same time, businesses and consumers across the globe are feeling the effects of rising demand for oil.
"For both environmental and economic reasons, each of our nations has a strong interest in developing the clean energy that will fuel the future - and which will allow us to become more energy independent. That's why I'm going to Bali this week for the U.N. Framework Convention on Climate Change.
"I understand the concerns here in China about how this issue should be addressed. But the fact is we cannot put the brakes on climate change unless both China and the U.S. join the international community as partners in the effort. And unless we do, our children - and theirs - may pay a terrible price.
"The common challenges facing global leaders like China and the United States are enormous - but so are the potential dividends of cooperation. That's why our competition must continue to be channeled into new levels of cooperation that will bring our nations - and the world - closer together. And the moment for doing it couldn't be better.
"In just six months, the ultimate example of cooperation through competition will come to China: The Olympic Games. And for the first time in Olympic history, the world will be tuning in not only to see the Games - but to see a major global power draw the curtain back on an economic renaissance that is nothing short of miraculous.
"The Olympics will be an incredible opportunity for China to showcase the impressive progress it has made in recent years, but it will also be a reminder to people across the world that much work remains to be done in building a harmonious society, where differences of opinion - on politics, philosophy, and faith - are accepted for what they are: part of the natural order of life.
"As the Mayor of a city where you can hear 200 languages spoken on the street, I believe that there is no better example of how diversity strengthens a society than New York City. New York's incredible cultural diversity is perhaps the single greatest competitive advantage that we have.
"Because in the global economy, talented people want to live in places that offer not only exciting careers, diverse cultural opportunities, safe streets, good schools, and clean air, they also want to live where they are free to be themselves.
"China has proven in spectacular fashion that it can compete and succeed in the global marketplace - but there are many of us around the world who are hoping that China's biggest advances are yet to come. I believe strongly that if we continue to expand the dialogue between our two countries, and continue to cooperate on common challenges, all the world will be better for it.
"I want to thank you for the honor of being with you today, and for giving me the opportunity to engage in this dialogue. I also want to invite all of you to come visit us in New York. And when you taste our delicious soup dumplings, you'll feel right at home!"
Stu Loeser (212) 788-2958
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