Economic shift opens China’s doors to business

As the US-China relationship enters another critical period in the first year of the Trump administration, China’s ongoing economic transformation presents investors and companies with opportunities, said speakers at the HSBC China Forum in New York on Wednesday.

Zhang Qiyue, Chinese consul general in New York, said US-China economic cooperation has enormous potential.

“China’s economic growth is a long-term certainty, and China-US economic cooperation will continue,” she said.

Zhang said consumption and innovation are the main drivers of Chinese economic growth, as opposed to manufacturing exports of years past.

Noting that the US is China’s top trading partner, Zhang said the reset of US-China relations with the new administration in January set a constructive tone for the future when President Xi Jinping met US President Donald Trump in Florida a few months later.

The two sides initiated a comprehensive dialogue on the economy, trade, cybersecurity and social and cultural issues, Zhang said.

She also said that China’s plan to build a new Silk Road — part of the Belt and Road Initiative (BRI) — “is not just a Chinese initiative but a global initiative to stimulate the world economy”.

David Liao, president and CEO of HSBC China, said the BRI represents an opportunity to enhance the global supply chain through infrastructure investment.

China is continuing its economic rebalancing from industrial to consumption-led growth, and the results have been remarkable, Liao said.

He pointed to the Pearl River Delta (PRD) region, which is home to Guangzhou, Hong Kong and Shenzhen, as China’s version of Silicon Valley, the US high-technology center.

“The Pearl River Delta is helping to shift China to a more consumer-based economy,” Liao said. In 2016, the PRD’s population was 68 million and its gross domestic product was $1.3 trillion.

Liao also said China remains committed to opening up its capital markets to outside investors, pointing to the Stock Connect program in Hong Kong, Shanghai and Shenzhen and the Bond Connect in China and Hong Kong.

“China has the world’s thirdlargest bond market and the second-largest stock market,” Liao said.

Noting that HSBC was started in 1865 to finance growing trade among Europe, India and China, Patrick Burke, president and CEO of HSBC North America Holdings Inc, said the bank remains committed to “serving as a commercial bridge between economies and nations”.