[Editorial note: Ambassador Holmer arrived in Beijing last Monday to prepare for the third round of a high-level trade discussion called the Strategic Economic Dialogue, which will take place Dec. 12-13.]

If China allows more international competition for goods and resists protectionism within its borders, the benefits of the country’s breakneck economic growth will be spread more evenly throughout its society, a U.S. special economic envoy to China said in Atlanta Nov. 29. 

“In my judgment, the greatest risk to China's long-term economic security is not that China opens too fast, but, rather, that protectionists prevail, and Chinese reforms proceed too slowly,” Ambassador Alan Holmer told a roomful of experts and businesspeople at the Southern Center for International Studies’ Buckhead facility.

The continued move toward openness is a main objective of the Strategic Economic Dialogue, a series of high-level bilateral discussions established last September by President Bush and Chinese President Hu Jintao.  Mr. Holmer, who was appointed by U.S. Treasury Secretary Henry Paulson to help represent the U.S. in the talks, arrived in China Monday.

Mr. Holmer visited Atlanta about two weeks before the third round of SED discussions in Beijing Dec. 12-13 in an effort to “publicize the administration’s efforts towards China and the importance of the SED,” said Cedric Suzman, vice president and director of programming for Southern Center, which co-sponsored the event with Georgia Tech’s Center for International Business Education and Research, or CIBER.

Dr. Suzman said that the September announcement that Delta Air Lines Inc. will begin nonstop service to Shanghai, China, next year played a role in the Treasury’s decision to target Atlanta.

“They indicated that they had only recently thought of Atlanta as an important hub for the Southeast (as it relates to) China, he said.

At the briefing, Mr. Holmer said that the American and Chinese economies have become so integrated with each other that “there is hardly an issue…where American and Chinese interests do not increasingly overlap.”

In view of this interdependence, issues like the protection of intellectual property, product safety standards and the revaluation of Chinese currency must be addressed with a unified front in a forum that ensures that both the U.S. and China are speaking with “one voice at the highest levels,” Mr. Holmer said.

The U.S.’ three-pronged approach for the dialogue has to do with helping China rein in its rapid growth with fitting policies and encouraging China to become a “responsible economic power,” fostering transparency that Mr. Holmer said would benefit both countries’ economies.

With the “reform and opening” campaigns beginning in earnest in the early 1980s, the Chinese government started liberalizing its markets and, as the name implies, exposing its economy to outside influences.

In the almost 30 years since then, the Chinese economy has embarked on an unprecedented growth spurt, with all its incumbent benefits and setbacks, Mr. Holmer said.

Some of the questions raised by the audience at the Southern Center displayed perceived obstacles in the bilateral economic relationship, which has been somewhat tarnished recently by disputes at the World Trade Organization and frequent news reports about the discrepancy in safety standards on Chinese imports like toys and pet food.

Peter White, founder and president of the Southern Center, said that the Chinese savings rate is almost twice that of the rest of the world.  With the U.S. pushing for more domestic consumption in China and less reliance on exports, Mr. White asked whether the U.S. could exert any control over the structural and cultural issues—like differences in health care and school systems—that cause the high savings rate.

In response, Mr. Holmer reiterated the U.S.’ desire to help China build the regulatory framework necessary to deal with its speedy and often unbridled growth.

John McIntyre, director of Georgia Tech’s CIBER, wondered how the U.S. would address further revaluation of the Chinese currency, which some say the Chinese government is keeping artificially low to attract manufacturing to China.

“This is an issue we take very seriously.  We are encouraging them to move to a more market-determined exchange rate,” Mr. Holmer replied, saying that further appreciation would benefit both China and the U.S.

Lani Wong, chair of the National Association of Chinese Americans, mentioned Chinamex Americas LLC, a company considering establishing an incubator for Chinese companies in Georgia, when posing a question about the U.S. stance on Chinese investment in America.

“Overall, the U.S. government policy is that we welcome investment into the U.S. from China and other countries,” said Mr. Holmer, who added that foreign direct investment creates jobs in America and that Chinese companies would probably continue to invest as long as their savings rate remains high.

Among other issues filtered through questions from the well-informed crowd members, John Ray, chairman of the Georgia China Alliance, asked whether the massive bilateral trade imbalance is actually bad for the U.S., as many people perceive.

“Over the past five years, according to U.S. data, U.S. exports to China have grown from $18 to $52 billion, while U.S. imports from China have grown from $102 to $287 billion,” Mr. Holmer said.  In 2006, the U.S. had a trade deficit with China of $232 billion. 

Mr. Holmer stressed that to make such a value judgment based on one bilateral relationship is the wrong move.  To him, the relationship benefits both parties, and mutual development can continue if both sides commit to a clear dialogue, he said.

To see Mr. Holmer’s candid responses to these and more questions, watch the above GlobalAtlanta video interview, which preceded the event.