5 January 1999 Source: http://www.access.gpo.gov/su_docs/aces/aaces002.html ----------------------------------------------------------------------- [Federal Register: January 5, 1999 (Volume 64, Number 2)] [Notices] [Page 477-479] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr05ja99-40] ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE International Trade Administration Multi-Agency Business Development Infrastructure Mission to China and Hong Kong, and Business Development Mission to Korea AGENCY: International Trade Administration, Commerce. ACTION: Notice of mission statement. ----------------------------------------------------------------------- I. Description of the Missions The Department of Commerce announces that Secretary of Commerce William M. Daley will travel to South Korea March 10-13, 1999, for a business development mission, and to China and Hong Kong March 14-20, 1999, to lead a multi-agency business development infrastructure mission. China/Hong Kong. The multi-agency infrastructure mission to China, which was announced during the Presidential Summit in June of this year, is designed to include cabinet and other senior officials representing infrastructure-related agencies in the U.S. Government. The business development mission will include large, medium, and small firms representing sectors such as, but not limited to, information technologies, power generation, oil and gas exploration and downstream development, construction including residential dwellings, environment, transportation, and engineering and financial services in support of efforts to involve more U.S. companies in China's infrastructure development. The Secretary, cabinet agency representatives, and mission members will stop in Hong Kong to pursue substantial infrastructure opportunities there and to meet with Hong Kong officials and local U.S. business. As currently envisioned, the mission will travel to Beijing, Hong Kong, and two other cities to be determined. The itinerary in Beijing will largely consist of bilateral policy meetings with Chinese senior economic officials, of forums on trade initiatives and issues, and of meetings for U.S. participating firms with key decision makers in relevant ministries and organizations. Outside of Beijing, we envision site visits to key infrastructure projects and to joint ventures between U.S. firms and local firms, round table discussions with senior economic development officials, and matchmaking business appointments for mission participants. The mission also presents an opportunity to implement a number of other commercial initiatives announced during the Presidential Summit in June. The state and non-state enterprise forum, the housing, insurance, e-commerce, environment, and aviation initiatives will receive focus and attention during the visit. Korea. Building on the momentum of President Clinton's November 1998 visit to Korea in which Secretary Daley participated, the mission to Korea will broaden commercial ties and help U.S. companies take advantage of opportunities arising out of Korea's economic reform program. The mission will fulfill President Clinton's commitment to President Kim Dae Jung that Secretary Daley will bring a mission to Korea and demonstrate the Administration's support for Korea's recovery and restructuring efforts. The mission to Korea will bring U.S. companies to this market at a time when it is poised for recovery and is making unprecedented changes in the way business is done. Despite the current economic slowdown, there are many good opportunities for U.S. firms willing to look for and pursue them. Exporters need to be creative with financing and to identify instruments addressing short-term liquidity problems, including U.S. Government institutions such as the Export-Import Bank. In Korea, the focus will be on commercial opportunities, including those presented by the continuing IMF-mandated economic reform program. The Secretary will meet with government officials to discuss bilateral concerns, advocate for U.S. commercial interests, and advance other relevant policy initiatives. Briefings and matchmaking business appointments will be made for members of the business delegation. Individual country briefings will include local public and private sector officials to discuss developments in the country that affect the commercial environment. The mission will depart Washington on March 10. One group will visit Korea March 12-13 and a second group will visit China March 14- 20. [[Page 478]] II. Commercial Setting for the Missions China is considered to offer the lion's share of future growth in sales of goods and services for many American companies. Exports reached $13 billion and imports, $62.5 billion in 1997. China has become our fourth largest trading partner and supplier of imports. China is our fifteenth largest destination for U.S. exports. Since the mid-1980s when U.S. trade with China began to grow substantially, U.S. imports from China have continually outpaced U.S. exports to China. This has resulted in a large and growing trade deficit, now our second largest deficit after Japan. The deficit has grown four times since 1990 ($10.4 billion) to $49.7 billion in 1997, and is projected to reach $58 billion in 1998. Beijing is the capital and the locus of much of the decision making on infrastructure development, as well as on trade policy. Besides Beijing, two other stops with significant infrastructure opportunities will be selected. Hong Kong, which reverted to Chinese sovereignty on July 1, 1997, is now a Special Administrative Region (SAR) of China. HK SAR operates under the late Deng Xiaoping's ``one country, two systems'' model wherein HK SAR continues largely with its way of life with minor modifications. A chief executive, Tung Chee Hwa, chosen by a ``Selection Committee'' of 400 people, now presides over the government. The HK SAR is a separate customs territory, maintains its own freely convertible currency, enjoys independent status in the WTO and other multilateral and bilateral fora, and continues with one of the most open and free market based economies in the world today. China is responsible for Hong Kong's defense and foreign affairs. Hong Kong's most significant challenge currently is the Asian financial crisis, which has resulted in a drop of some 50 percent in real estate prices, and over 60 percent in stock prices. Recent measures by the HK SAR government to defend the Hong Kong dollar against speculative attacks and to stabilize the stock market through the direct purchase of shares appear to have had a positive effect, with interest rates returning to normal levels and the Hang Seng Index recovering by over 30 percent since the government's intervention. Hong Kong is our 11th largest destination for exports. The U.S. ran a $4.8 billion trade surplus with Hong Kong in 1997. The American Chamber of Commerce in Hong Kong is the largest U.S. chamber outside of North America, with approximately 2,600 members. Before the financial crisis hit Korea in the fall of 1997, Korea was our fifth largest export market, accounting for $25 billion in exports and a $2 billion trade surplus that year. Under the auspices of the $58 billion stabilization package put together last winter under IMF leadership, financial markets in Korea have stabilized and recovered somewhat from last winter's lows. The domestic economy, however, has gone into recession. Unemployment has tripled over the past twelve months, while real GDP could fall by as much as 7 percent this year. There are signs, however, that the economy will soon turn the corner. A number of forecasters expect a return to positive growth in the second half of 1999. Korea has made tremendous progress in its reform program, particularly in the areas of capital account liberalization and financial sector restructuring. Corporate restructuring remains the linchpin to recovery yet is also the most difficult area of reform for the government to influence. The recession combined with the scarcity of trade financing has severely affected U.S. exports to Korea. Exports for January-October 1998 are down 42 percent from the same period in 1997. U.S. imports from Korea were up 2 percent. During President Clinton's November visit to Korea, the Export-Import Bank committed another one billion dollars in medium term credits for Korea, bringing Ex-Im's total short and medium term commitments to $4 billion for 1998. III. Goals for the Missions The missions will further both U.S. commercial policy objectives and advance specific business interests. They are aimed at: Expanding U.S. exports to China's and Hong Kong's priority infrastructure development sectors and projects; underscoring the need to reduce our growing trade deficit with China, estimated to be $60 billion in 1998; Implementing commercial initiatives agreed to during the June Summit and the 12th session of the U.S.-China Joint Commission on Commerce and Trade; Advocating on behalf of U.S. firms already active in China, Hong Kong, and Korea; Resolving market access issues for U.S. companies in all locations; Maintaining visibility for U.S. companies wishing to gain or maintain a foothold in the Korean market once recovery begins; and Demonstrating U.S. support for continued enterprise, financial and corporate reforms in China and Korea. IV. Scenario for the Missions The mission to China and Hong Kong will emphasize the need for greater U.S. participation in China's and Hong Kong's infrastructure development and advance outcomes and initiatives agreed to during the U.S.-China 1998 Summit. The mission to Korea will emphasize the long- term U.S. business interest in the country and reaffirm the Administration's positive view of the economic reforms occurring under President Kim's administration and the IMF stabilization package. Briefings and matchmaking business appointments will be made for members of the business delegation. The business of the mission will consist of: Embassy briefings on the economic/commercial climates; Meetings with Ministers and other senior level government officials with responsibilities for the mission's focus sectors; Meetings with potential buyers, agents/distributors and partners. Meetings with the U.S. business community. Forums, roundtables, and other policy focused discussions with senior economic decision-makers. The Secretary will meet with the leadership and other government senior officials and with U.S. business representatives in all three locations. In China, the Secretary will underscore the need for greater market access in key sectors, to reduce our growing trade imbalance with China, and to advocate for U.S. firms bidding on China's priority infrastructure development projects. The Secretary will urge continued progress from China in meeting both market access and other demands of the WTO accession process. In Hong Kong, the Secretary will likely meet with the Chief Executive of the SAR and other senior leaders to signify continued strong U.S. interest in the integrity of Hong Kong's autonomy and free market system under the ``one country, two systems'' sovereignty arrangement with China. He will also urge selection of U.S. firms for Hong Kong's infrastructure efforts with $30 billion in projects to be developed over the next five years. Additional forums on the free market system and China's reform agenda for state and non- state enterprises, housing, commercial law and other topics are possible. While in Korea, the Secretary will emphasize U.S. market access concerns, advocate on behalf of U.S. companies, promote bilateral and multilateral trade [[Page 479]] policy objectives, and reiterate USG support for Korea's economic reforms, while stressing that continued reforms are key to maintaining economic, political and commercial momentum. He will also co-chair a meeting of the U.S.-Korea Committee on Business Cooperation (CBC). V. Criteria for Participation of Companies The recruitment and selection of private sector participants in each mission will be conducted according to the Statement of Policy governing Department of Commerce-led trade missions announced by Secretary Daley on March 3, 1997. Participants will be selected separately for the China/Hong Kong business development infrastructure mission and for the Korea business development mission and should fill out separate applications for each mission. Companies may apply for either or both missions, and will be selected according to the criteria set for below. Approximately 15 companies will be selected for the China/Hong Kong business development infrastructure mission and approximately 10 companies will be selected for the Korea business development mission. Selection for one mission does not confer priority for selection for the other mission. Eligibility Participating companies must be incorporated in the United States. A company is eligible to participate only if the products and/or services that it will promote on the relevant mission either (a) are manufactured or produced in the United States; or (b) if manufactured or produced outside the United States, are marketed under the name of a U.S. firm and have U.S. content representing at least 51 percent of the value of the finished good or service. (At the discretion of the Department, which will generally be exercised on a mission-specific and sector-by-sector basis, the 51 percent U.S. content requirement may be modified or waived.) Selection Criteria Companies will be selected for participation on the basis of: Level of seniority of designated company representatives and its appropriateness to the mission objectives; Relevance of a company's business and product line to the plan and objective of the mission (see below); Past, present and prospective business activity in Asia, particularly in China, Hong Kong and/or Korea, as applicable; and Diversity of company size, type, location, demographics and traditional under-representation in business. In addition, the Department may consider whether the companies' overall business objectives, including those of any U.S. or overseas affiliates, are fully consistent with the missions' foreign and commercial policy objectives. Participants in the China portion of the mission will be drawn from several infrastructure sectors, including, but not limited to, the following: Environmental technologies, Information technologies/telecommunications, Housing construction and building materials, Power generation, Oil exploration and development, Transportation, and Engineering and financial services. Companies for the Korea portion of the mission will be drawn from several sectors, including, but not limited to, the following: Environmental technologies, Information technologies/telecommunications, Infrastructure, and Energy. An applicant's partisan political activities (including political contributions) are irrelevant to the selection process. VI. Time Frame for Applications Applications for the business development mission to China and Korea will be made available beginning on or about January 4, 1999. The fees to participate in these missions have not yet been determined. The fees will not cover travel or lodging expenses. For additional information on the trade missions or to obtain an application, business persons should be referred to Lucie Naphin, Director of the Office of Business Liaison, or Jennifer Andberg, Office of Business Liaison, at 202-482-1360. Applications should be submitted to Lucie Naphin by February 1, 1999, in order to ensure sufficient time to obtain in- country appointments for applicants selected to participate in the mission. Applications received after that date will be considered only if space and scheduling constraints permit. Dated: December 29, 1998. Lucie Naphin, Director, Office of Business Liaison. [FR Doc. 99-131 Filed 1-4-99; 8:45 am] BILLING CODE 3510-25-P