Department of Commerce Portfolio Manager Keynotes Annual Asia-Pacific Business Conference

The biggest opportunities for investment in China include energy, aircraft, grain, cotton, textiles, medical equipment, and scrap metal, said Sean King, China portfolio manager for The Advocacy Center of the U.S. Department of Commerce. “Rolls-Royce, which manufactures engines, says that in the next 20 years there will be 2,300 new commercial aircraft bought by Chinese airlines,” King told the 2005 Chicago Asia-Pacific Business Conference during his keynote speech October 1 at Gleacher Center. “The Asia-Pacific market as a whole will surpass aircrafts to Europe in 2008 and in the United States in 2022.”

Chief among the barriers to doing business in China is the theft of intellectual property, King said. “You cannot overstate the problem,” he said. “Counterfeiting is an epidemic in China. It’s always been a problem in Asia, but it’s never been seen on this scale.” Unlike Japan and Korea, China does not operate under World Trade Organization regulations for bidding on government contracts, King said. Unlike many of their European competitors, American companies are prohibited by U.S. law from paying bribes for contracts, he said. “Until recently, in Germany a bribe was actually tax-deductible,” King said.

Officials of Chinese companies often want to visit U.S. plants before packaging deals, but are frequently denied visas for political reasons, King said. The FBI, which established an anti-Chinese espionage unit, believes about 3,000 companies in the U.S. are actually fronts for intelligence gathering by Chinese Secret Service, he said. “The last three major espionage arrests of Chinese nationalists in California have been people who came in on student visas who were transferring high technology from campuses at Berkeley to the Chinese military,” King said. “This is a very real problem and something you have to keep in mind when some consulate official in Shanghai, who just got out of grad school, is trying to process 10 different visas and choosing who to let in or who not to.”

—Phil Rockrohr

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