Why this is important to Wisconsin businesses: China's trade surplus with the U.S. is narrowing, and along with it, opportunities are rising for Wisconsin companies to export to China.

In April, during the keynote address at the Boao Forum, President Xi announced a series of measures to further open China’s economy, including but not limited to:

  • Significantly broadening Chinese market access
    • Accelerating the opening up of the insurance industry
    • Easing restrictions on the establishment of foreign financial institutions in China and expanding their business scope
    • Opening up more areas of cooperation between Chinese and foreign financial markets
    • Easing foreign equity restrictions in manufacturing industries like ships, aircraft and automobiles
  • Creating a more attractive investment environment
    • Implementing an across-the-board management system based on pre-establishment national treatment and negative list
  • Strengthening the protection of intellectual property rights
    • Re-instituting the State Intellectual Property Office
    • Protecting the lawful intellectual property owned by foreign enterprises in China
  • Expanding imports
    • Lowering the import tariffs for automobiles and reducing import tariffs for other products
    • Importing more products that are competitive and needed by Chinese consumers
  • Turning Hainan province into a pilot zone for deepening reform and increased openness on all fronts, a pilot national ecological zone, an international tourism and consumption center, and a major national strategic logistics zone

China is showing its determination to open to the outside world, which is confirmed by actual import and export data as well as the aforementioned policies. According to China's General Administration of Customs, China’s foreign imports rose by 14.4 percent in March 2018 compared to the same month last year, while exports dropped by 2.7 percent. For the first time in recent years, China suffered a trade deficit of $32.6 billion, and the trade surplus with the U.S. narrowed by 13 percent compared to the same period last year.

Considering that the major concerns faced by U.S. companies doing business in China—investment barriers, technology transfer, enforcement of intellectual property rights, and licenses and approval—are all included in the scope of Chinese new opening policy, this new trend will create favorable conditions for Wisconsin companies to invest in China, enter the Chinese market, expand exports to China, and reduce the cost of access and transfer of intellectual property rights.

In addition, it is worth noting that China has also decided to establish Hainan as a free trade zone and free trade port, providing foreign companies with more favorable conditions than the above measures, and focusing on the development of medical care, education, medical tourism, shipping, aviation and other key areas. Considering that the aviation and life science industries, especially medical device manufacturing and drug production, are strong industries in Wisconsin, companies in these industries can take advantage of the new, more favorable policies to do business in Hainan.