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U.S.-China Economic and Security Review Commission, "Hearing: The Impact of Trade with China on New York State and Opportunities for Economic Growth," July 23, 2009

This hearing was conducted by the U.S.-China Economic and Security Review Commission on July 23, 2009. The U.S.-China Economic and Security Review Commission was created by the U.S. Congress in 2000 to monitor, investigate, and submit to Congress an annual report on the national security implications of the economic relationship between the United States and the People’s Republic of China.
July 23, 2009

July 23, 2009
Rochester Institute of Technology
Center for Integrated Manufacturing Studies
Louise M. Slaughter Building, Room 2240
111 Lomb Memorial Drive
Rochester, NY 14623-5608

Hearing Co-Chairs: Commissioners Patrick A. Mulloy and Dennis C. Shea

Opening Statement of Chairman Carolyn Bartholomew

Thank you Dr. Destler for your kind remarks. On behalf of the Commissioners and the staff of the US-China Commission, I would like to thank you for hosting our hearing at your magnificent facility.

Good Morning everybody, and welcome to today’s hearing on “The Impact of Trade with China on New York State and Opportunities for Economic Growth.”

My name is Carolyn Bartholomew, the Chairman of the U.S.-China Economic and Security Review Commission for the 2009 reporting year. Today’s hearing will be co-chaired by Commissioners Patrick Mulloy and Dennis Shea. We are a bi-partisan Congressional Commission composed of 12 members, six of whom are selected by the Majority and Minority Leaders of the Senate, and six from the Speaker and the Minority Leader of the House. Commissioners serve two-year terms. Congress has given our Commission the responsibility to monitor and investigate the national security implications of bilateral trade and economic relations between the United States and China. We fulfill our mandate by conducting hearings and undertaking related research as well as sponsoring independent research. We also travel to Asia and receive briefings from other U.S. government agencies and departments. We produce an Annual Report and provide recommendations to Congress for legislative and policy change.

This is the seventh hearing for the 2009 reporting year, a year in which we have already seen dramatic developments in the US-China trade relationship. Earlier in the year, we had a hearing on China’s industrial policy, which supports and nurtures its domestic strategic industries. Today’s hearing is on the impact of trade with China on upstate New York and the opportunities for economic growth in the region. Upstate New York has a great industrial base, and we are looking forward to hearing from our panelists about it.

Before we proceed with the hearing, we would like to thank Michelle Seger, Associate Director, for her outstanding service and assistance in making all the set up and notification arrangements for the hearing; James Bober, Lead Engineer, and Neil Kromer and the engineering staff for their A/V assistance in setting up the hearing room; Will Dube for his outstanding support and assistance; and Janice M. Emerson, General Manager, RIT Inn and Conference Center, Rita Farsace and Jennifer Harewood for their personal support and assistance in arranging for the lodging and transportation to and from the airport and hearing. Your staff was wonderful to work with and have contributed immensely to the success of this important hearing. We can’t thank you and your staff enough, and we want you to know how very much we appreciated the personal services and assistance provided to the Commission members and its staff.

I would like to welcome our panelists, and kindly ask that each speak for no more than seven minutes. This will allow the maximum amount of time for questions and answers. We will be breaking at noon, for lunch, and we will be resuming at 1:00 pm. Also, there will be a public comment period from 4:00 pm to 5:00 pm, and there is a sign-up sheet at the press materials table. With that, let me introduce Commissioner Shea, who is one of the co-chairman of the hearing.

Opening Statement of Commissioner Patrick Mulloy

I am very pleased to have the opportunity to co-chair today’s important hearing along with my friend and colleague, Commissioner Dennis Shea. I also want to thank the Rochester Institute of Technology for hosting today’s hearing.

In March this Commission held a hearing in Washington that examined China's policy of promoting the growth of strategic or pillar industries, meaning key industries that China believes can support a high tech, high wage economy. This, in my view, is part of a strategy being used by China to build its comprehensive national power and to help China regain the nation's former
status as a great power.

I have no quarrel with China doing this as long as it is not done at the expense of the standard of living of our own people or our own economic strength. Unfortunately I believe the latter is the case and that we must formulate and adopt policies that protect our legitimate interests. This does not mean I favor provoking a confrontation with China, but rather I believe we can formulate policies to help maintain our high tech manufacturing industries. I hope today's hearing can help us all understand a little better just what those policies might be.

Upstate New York was once a great industrial cluster, hosting such national champions as Kodak, Xerox, and GE. However, during the past 20 years we have witnessed the steady exodus of manufacturing production. Now, we see that research & development is following manufacturing and is also relocating overseas. China has policies in place to encourage such outsourcing including an underpriced currency. This outsourcing trend is threatening to impact our new advanced technology industries like optoelectronics and life sciences. One of our witnesses today, Dr. Willy Shih, wrote in a recent, important Harvard Business Review article, entitled “Restoring American Competitiveness,” that “decades of outsourcing manufacturing has left U.S. industry without the means to invent the next generation of high tech products that are key to rebuilding this economy.”

The Commission will make good use of today’s discussion when it formulates its Annual Report to Congress. We appreciate the work our distinguished witnesses have put into preparing their statements, and we thank them for being here to testify.

Introductory remarks by Dr. William Destler, President of Rochester Institute of Technology

Commissioners’ Opening Statements
Opening Statement of Chairman Carolyn Bartholomew
Opening Statement of Commissioner Patrick Mulloy

Congressional Statements for the Record
Senator Charles Schumer (D-NY)
Senator Kirsten Gillibrand (D-NY)
Congresswoman Louise M. Slaughter

Additional Statement for the Record
Dr. Sam Natapoff, Senior Advisor to the Governor of New York State for International Commerce, New York, NY

Panel I: The Impact of Trade with China on New York State
Dr. Ron Hira, Associate Professor of Public Policy, Rochester Institute of Technology, Rochester, NY
Mr. John Perrotti, CEO, Gleason Corp., Rochester, NY
Dr. Willy C. Shih, Professor of Management Practice, Harvard Business School, Boston, MA

Panel II: The Impact of Chinese Competition on Local Companies and Communities
Mr. James V. Bertolone, President, Rochester Labor Council (AFL-CIO), Rochester, NY
Mr. William A. Johnson, Jr., former mayor of the City of Rochester, and Distinguished Professor of Public Policy and Urban Studies, Rochester Institute of Technology, Rochester, NY
Mr. Ed Kowalewski, Director of International Trade and Investments, Upstate Empire State Development Corporation, Buffalo, NY

Panel III: Government and Institutional Perspectives on Current Opportunities for Growth in New York State
Mr. Peter Robinson, Vice President and Chief Operation Officer, University of Rochester Medical Center and Strong Health, Rochester, NY
Mr. Paul Vargovich, President, National Solar Technologies, Depew, NY
Ms. Linda Dickerson Hartsock, Director, Center for Clean Tech Entrepreneurship, The Tech Garden, Syracuse, NY
Mr. Nicholas Rostow, University Counsel and Vice Chancellor for Legal Affairs, State University of NY, Albany, NY

Panel IV: Advanced R&D in Sunrise Industries that Can Lead to Growth for Local Companies
Dr. Nabil Nasr, Director of the Center for Integrated Manufacturing Studies, Rochester Institute of Technology, Rochester, NY
Dr. Marnie LaVigne, Director of Business Development, University of Buffalo Center for Advanced Biomedical and Bioengineering Technology, Buffalo, NY
Mr. Edward Patton, Director of Sales and Marketing, Rochester Precision Optics, West Henrietta, NY
Mr. Clive R. Barons, Vice President, Strategy Integration, Fuji Xerox Operations, Webster, NY

Panel V: Public Comment Period



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