I want to tell Jack Ma what an honor it is to be here representing the United States Embassy, representing the people of America, representing so many friends in China – many of whom you trade with, invest with, you’ve studied with in university and schools in China and the United States. It truly is an honor to be here in Hangzhou. I think Hangzhou is perhaps the most beautiful city in all of China. It is historic, it is sophisticated, it is culture, and it is the home of the Alibaba gathering – in its 7th year in a row. And it’s just an unbelievable opportunity to be able to look out at so many representatives of emerging industry and business here in China. I am just so very honored to be here. You know so much more about the issues and the subject matter than I do.
Now, the main reason for coming to Hangzhou today is to offer up a challenge, and it starts with many of you right here in this room. The challenge is simple, it goes like this: entrepreneurs of the world, it is time to unite. I'm convinced this is a historic time for our two countries to unite around issues of innovation and the development, advancement, and protection of ideas -- the fuel that fires the engines of entrepreneurs everywhere in the world, leveling the playing field, of all competitors. But first, though, let me just say how delighted I am to be here in this beautiful and historic city.
We hosted late last year one of our very important trade conferences between China and the United States and we talked through a variety of market openings, IPR, information technology and service issues. All matters that I know you deal with and feel so strongly about and now I have a chance to come back and talk again about the issues that, I think, matter to you the most, the CEOs. They are also issues on which we can make common cause for mutual gain. Our trade meetings last year are also a reminding that trade and commerce remain the sturdy backbone of the U.S.-China relationship – now $400 billion strong and soon to be the largest trading and commercial relationship anywhere in the world.
Hangzhou also has a special place in the revitalized U.S.-China relationship. We're coming up in the 40th anniversary of Henry Kissinger's historic visit here, the first tentative step toward re-establishing diplomatic relations between our two great countries. At the time, 40 years ago, the negotiations were all done face to face, secret memos were passed back and forth by hand and if you wanted to look something up you had to actually read a book. There was no internet, no email, no cell phones, no Alibaba and Jack Ma was only around 5 or six years old. President Nixon reportedly enjoyed his time here at Westlake so much he said Beijing may be China's capitol, but Hangzhou is the country's heart! My Chinese friends also refer to it as Yu Mi Zhi Xiang (land of plenty)
President Nixon's visit here was one of the great diplomatic breakthroughs in recent American history. It was a time (before many of you were born) of estrangement, not cooperation between the United States and China. Our relations were largely defined by the hostilities in Korea and Vietnam, and the conflicts between capitalism and communism. It took visionary leadership on both sides of the Pacific to bring these two countries together and so much of that hard work happened right here in Hangzhou. Predictably, we continued to have our differences, and sometimes we still do. But those meetings, over 40 years ago, marked a signal shift in our relationship, from opposition to, at its best, genuine cooperation and mutual benefit. But the 1970's were in many other ways a very difficult time in the United States. The Vietnam War sparked tremendous domestic upheaval. Our economy stalled, we were battered by stagflation, high unemployment and declining living standards. Beloved leaders in America had been assassinated. All around us, confidence in the American economic model was being shaken. Everywhere you looked, people were saying that America was in decline and would soon lose its leading role in the international system. Even at home, millions of Americans were ready to close our borders and turn inward.
But then an interesting thing happened that we have seen in other chapters of our history. Our economy bounced back stronger than ever, thanks in large part to our fundamental belief in the powers of an open marketplace. Maybe it's because we are a nation of immigrants, or maybe it's because we stretch from the Atlantic to the Pacific Oceans, but even during the toughest times, we always believed in the power of freedom and always valued engagement over isolationism.
We welcomed tens of thousands of international students (maybe even some of you or your family members) to our universities, as we continue to do today. Students who return to their home countries armed with uniquely American ideas and approaches, planting their own seeds of innovation and enterprise. We attracted brainpower to the United States, and we still do. Talent that helped fuel our economic engine when we needed it the most and became valued and equal members of American society. We created industry clusters where scientists and entrepreneurs could interact and exchange ideas – creating incubators for future ideas and future business opportunities- this, too, continues today. The best example and one I am sure you are all familiar with, is Silicon Valley, which not only helped launch the computer revolution but established a certain recipe for success that serves as a model for similar technology hubs throughout the world, from Brooklyn to Beijing. Our commitment to open markets and an open society resulted in a flurry of innovation and new technologies that revitalized our economy, ultimately creating some 30 million new jobs. It was innovation, and the entrepreneurial culture that fostered it, that helped drag the United States out of the economic challenges and doldrums of the 1970's and set up three decades of unprecedented growth and prosperity.
Now both countries have experienced both enormous growth and change since our modern relationship began 40 years ago. I suspect the pace of change will advance beyond anyone’s comprehension in years to come. And I am guessing the driver will be the development of ideas in health, energy, transportation – just to name a few. So here's the question: is there a central role for innovation in the U.S.-China relationship that speaks to where we want to find ourselves in the future? If so, and I believe there is – then let's get moving!
In the United States we venerate people like Thomas Edison, who invented the light bulb. Henry Ford, who helped launch the modern automobile industry, John Rockefeller, who revolutionized the oil business, Warren Buffet and investing, Bill Gates and Microsoft, all of them have helped define the American Dream, where you work hard, you think big and ultimately, you enjoy the fruits of your labor. And then there's Jack Ma, who's busy creating what we should probably call the Chinese Dream. He started with one of the slowest internet connections in the world. I hear it used to take Jack all day to download a single page. But if it took all day, he'd wait all day. And slowly but surely he learned how to operate on-line. Pretty soon, he founded China's first internet-based company – China Pages. Today, of course, he's CEO of the Alibaba Group, which brings us all together today with, at least this morning, more than 50-million members. Knowing Jack, it'll probably be 60 million by the time I finish this speech.
So we've all heard stories about entrepreneurs, whether they're Chinese or American. And the environment that produced the success stories all seem to have four basic things in common: One, they encourage free thinking; Two, there is easy access to information and capital; Three, they welcome collaboration; Four, they tolerate failure. Perhaps the best example of that sort of innovation is the internet, which is one of the greatest magnets for entrepreneurs we've ever seen. In the United States, some economists estimate the internet has created over a million jobs in the past decade and generates at least 300 billion dollars for the U.S. economy every single year. The internet is transforming the way we live and the way we think. It embodies the central tenets of an innovative society- it is full of free thinkers and nonconformists, and it is by definition a network that is sustained by collaborative work. So, it should come as no surprise that today's Internet is creating a massive new generation of innovation.
President Obama put it best when he spoke about this last year in Shanghai. He said the more freely information flows, the stronger society becomes. It generates new ideas and encourages creativity. He also acknowledged that he doesn't always like what he reads on the internet. Obviously no one likes to hear criticism. It’s the same thing at the Embassy where I work. We read the Chinese blogs sometimes, and trust me, not all of them are happy supporters of U.S. policy! But the internet lets our businesses find new markets. It lets our citizens keep track of their leaders and our leaders stay in touch with their constituents. I know from experience it helps my very own daughter who comes from China and is now part of our family. She isn't old enough to drive a car but seems able to navigate through endless amounts of information while speaking simultaneously with friends on different continents, and even in different languages!
The internet also lets us connect on the two issues I think will define whether our economies succeed in the next quarter century- health care and clean energy. Access to information on these two subjects in real time means we will find innovative ways to enhance the quality of life of our citizens and grow our economies in ways we can only begin to fathom today. So we have made clear, we believe freedom of information benefits everyone throughout the world and the internet is vital in this regard. There is something else we believe and that is promoting the business values that helped create the internet, and that means protecting ideas, innovation, creativity, and intellectual property. You can’t have the internet without computers, and there's no way Apple or the great Chinese company Lenovo could operate if everyone ripped off their technology. That sort of innovation is only possible when you have a legal system that ensures rewards for the risk taking and the creativity that naturally follows. It's not complicated: Companies won't invest in markets, whether in the United States, China, or anywhere else, if they know their ideas will somehow be compromised. Companies won't work together if they think their innovations will find a way out the back door. And listen, we see it every day, all of us, and everywhere. I know, even on the streets of New York I've been offered fake Rolex watches. In fact, just a few days ago somebody tried to offer me, as I was on my bicycle, a bootleg DVDs outside a mall in Beijing. Poor guy, I literally had to tell him, of all the people you try to sell this to, I really think selling bootlegged products to the U.S. Ambassador to China isn't a great business model and I think he agreed totally.
Meanwhile, as just one example of what a truly innovative and collaborative environment can create, look at the example that’s playing out before our very eyes -- think of the iPhone. Ten, fifteen years ago, Apple used to guard its systems technology very, very closely. But when it introduced the iPhone, Apple was so confident its core technology would be protected it decided to put its operating platform in the public domain. And then it encouraged other companies to create new applications. And then those companies encouraged their contacts to create even more applications. That simple decision - to share information - made a good product a great product, and benefited both the consumer and Apple. At last count, the iPhone has something like 200-thousand active applications and has already sold more than 40-million units. I am absolutely sure that each one of my daughters has one or two in their hop pocket.
That’s one good example, here's another example to think about: Last year the Chinese film industry – based on figures from China - lost over 10-billion RMB to piracy. Think about that for a second. That's more money than the entire industry made. So, in the old days, IPR protection was a one way street, only good for foreign companies. Not anymore. One of the things that surprised me most on my return to Asia is the level of sophistication and dynamism of China's private sector and entrepreneurs. Now it's your companies, and your ideas that are creating a new tomorrow, with lightning speed, for China.
Innovation and the creation of new ideas will be as central to China's economic future as it has been to my own country: the United States. So, this really isn’t just an American issue, this is an issue for any company that values innovation and seeks to be truly competitive. I can’t underscore that point enough. This is not about protecting someone else’s ideas or innovation. Protecting innovation and ideas benefits everyone. It is an issue that we can’t and we must make common cause as we pick the U.S. China relationship into an even higher era. In today's hyper connected world, innovation and creativity knows no political or geographic barriers. Google recruits Chinese engineers in Beijing and Huawei has filed more than a thousand patents in the United States; it has never been so clear that our economic futures between the United States and China are inextricably linked to how we innovate together. The good news is we are already moving in some very exciting and reinforcing directions. Last November, President Obama and President Hu announced plans for a China Clean Energy Research Center. This is an excellent example of how the U.S. and Chinese governments, business, scientists and engineers will work together in the future to develop ideas in important sectors – in this case, clean coal, clean electric vehicles, and more efficient buildings will be the focus. The key to success here is that ideas will be shared equally by both countries, and that's only possible because there was a level of trust on both sides of the negotiating table.
So the question is, how do we build on this success, how do innovate together? How can we, as a team, ensure innovation and IP rights are central to the U.S.-China relationship? Here are five areas that can help ensure that innovation plays a central role in the development of our two nations:
Number one; we need to expand our technological platforms and invite cross-border collaboration, not close doors and lock computer networks.
首先需要拓展我们的技术平台，增加一些跨国界的合作，不应该关起门来。
Number two; let us commit to using established bilateral connections between the United States and China to address the issues and generate specific, actionable goals and deadlines that truly support you and promote innovation on both sides of the Pacific. Earlier this week, our two countries engaged at the highest levels, when President Obama's advisors on National Security and the Economy met with President Hu and Premier Wen Jiabao. This type of dialogue is absolutely critical as it builds trust and deepens a meaningful relationship between us and is key to our long term prospects. We have plenty of opportunity to keep this dialogue alive and well – especially with President Hu's visit to Washington next year. IPR should remain front and center during all of our exchanges. Improving the environment for innovation and developing ideas for entrepreneurs should remain front and center during all of our exchanges. The U.S. business community and government officials, I assure you, are willing and able to join forces together on this issue. When I was governor of Utah I knew how important these issues were to my business community. I know how important this is to the Governor of California, my good friend Arnold Schwarzenegger, and you’ll probably hear how these issues are important to his business community as well.
Number three; let's keep our borders as open as possible. Our students, scientists, and cultural ambassadors should have as much exchange as possible, whether it is in person or on-line. That's why we are working around the clock to reduce visa wait times for all of you trying to get to the United States, and it's why we applaud plans to send 100-thousand American students, over time, to China.
Number four; we need to simplify the national enforcement approach on intellectual property rights, and work towards creating local models of excellence at the municipal and provincial levels, where American mayors can work with Chinese mayors, and American governors with Chinese provincial governors and you can work better with American businesses so we can start to establish a genuine and consistent best practices approach to enhancing the overall environment for innovation.
Number five and finally, and perhaps most importantly, we all need to empower the entrepreneur. We all need more Jack Mas. Although cultures may be different around the world, the entrepreneurial spirit and drive for success is the same wherever you go and we need to protect that. Entrepreneurs require an appetite for risk, capital to fuel their aspirations, a collaborative environment and respect for the power of ideas. Look at Jack Ma; he took a basic idea and expanded it, he transformed the economic model and created opportunities for millions of new businessmen, not just here in China but around the world.
We are all helping to define a new tomorrow for the U.S.-China relationship, the most important relationship today in the world. Just like our leaders did 40 years ago in Hangzhou. Their decisions were almost exclusively about Big Balance of Power politics. Today, our discussions should be about enhancing the quality of life for our citizens, finding cures for human diseases, developing new ways to power our economy and building bridges only made possible by innovators, dreamers and creators …people just like you. I have high hopes, and am terribly optimistic, for our future…Entrepreneurs of the world, it is time to unite!
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