"I'm honored to be the first chairman of the Securities Industry Association to speak in China on behalf of my industry," Thornburgh said. "China is an increasingly important trading partner for the United States, and the expansion of its capital markets will benefit both American and Chinese investors and the global economy."
Thornburgh offered a three-point plan for the next steps in strengthening U.S./China relations to enhance capital markets and investment. First, he called upon the Bush Administration to continue to resist political pressure to pursue protectionist policies, which limit full American participation in global markets.
"The Bush Administration realizes the mutual economic benefits of a strong U.S.-China relationship," Thornburgh said, noting that China is the fastest growing market for U.S. exports. "We know that all economies ultimately benefit from the expansion of international trade in goods, capital, and, services. Competitive, efficient global markets improve the allocation of capital to borrowers and users, which provides fuel for job creation and economic growth."
Second, Thornburgh urged World Trade Organization signatories to work together to improve transparency in the regulatory processes governing international markets and investment.
"Clear, understandable regulations provide market participants with predictability and the knowledge to comply with regulations," Thornburgh said. "Regulatory clarity helps companies develop a more accurate portrayal of the costs and returns associated with their business, and serves the healthy goal of requiring regulators to articulate their regulatory objectives. Opaque or ambiguous regulations and rulings create uncertainty - and uncertainty is an enemy of the capital markets."
Third, he said that China should be encouraged to take steps to realize the enormous benefits of its WTO membership by continuing capital market reforms.
"By incorporating the lessons learned - both positive and negative - from experiences in established markets like London, New York, and Hong Kong, China can create the liquid, deep, and transparent capital markets that will drive the country's long-term economic growth," Thornburgh said.
