Mr. Stephen A. Orlins:Overseas Investments by CMIG Promote Closer Ties between China and the World

As the Chairman of the National Committee on United States-China Relations, Mr. Stephen A. Orlins has Apaid frequent visits to China and can be seen on Chinese media from time to time. Former U.S. President Jimmy Carter once called Orlins “Little Potato.” The first sight of Orlins back then could explain that nickname, despite the fact that he is older now.

Mr. Orlins has spent half of his life on China-related work. He has witnessed the evolution of China-US relations from the very beginning.When China and the United States established a formal diplomatic relationship in January 1979, Mr.Orlins was working in the Bureau of East Asia and Pacific Affairs in the U.S. Department of State. On October 19, 1979, it was Mr. Orlins’ first time coming to China as a member of a legal team for the establishment of the China-US diplomatic relationship.

Afterwards, as a businessman, his businesses have born closer relations with China and Asia. He was invited to be the President of Lehman Brothers Asia, founded a private equity fund, the Carlyle Asia Partners, and held the post of the Chairman of the Board of Taiwan Broadband Communications.Since 2005, Mr. Orlins has served as the Chairman of the National Committee on United States-China Relations.Since January 2015, he has an additional identity, namely, a committee member of the“Global Advisory Council,” which was established by China Minsheng Investment Group, (hereinafter referred to as CMIG), the largest private investment company in China. He provides intellectual support for globalization strategies of CMIG jointly with Romano Prodi (Former Prime Minister of Italy),Dominique de Villepin (Former Prime Minister of France) and Robert Engle (Former Nobel Economics Prize Winner).

China has endeavored to attract foreign investments for many years. However, more and more Chinese capital has flowed overseas in recent years. In 2015, Chinese-funded companies completed record-breaking investments of $15 billion in the United States. This year, the current total amount of business transaction to be completed has exceeded 30 billion USD. We will again see another round of record-breaking investments in the U.S. by Chinese-funded companies.

In Mr. Orlins’ view, deepening civil ties between the U.S. and China through investments and joint cooperation is the best way . Therefore, he is pleased to act as a member of the think tank for Chinese private capital, assisting Chinese-funded companies in making investments in the United States and promoting civil understandings between the United States and China.

Overseas Investment by CMIG PromotesCloser Ties between China and the World

As overseas direct investment (ODI) is in excess of foreign direct investment (FDI), China has become a capital exporting country since 2014. During the first quarter of 2016, China’s foreign non-financial direct investment has reached RMB 261.74 billion (amounting to $39.89 billion USD), of which the investment in the U.S. is $5.24 billion. According to statistics, private enterprises have become a major force in overseas investments with respect to both investment volumes and investment amount.

One industry leader of the above mentioned Chinese overseas investors is CMIG, which bears the image of “Chinese Investment entity of Chinese private capital,” and has 60 large private enterprises as its shareholders. Since its formal establishment in May 2014, CMIG has made continuous efforts to build up its overseas investment network, including its registration of CMIG International in Singapore, the establishment of industrial parks through its investments in Indonesia, the signing of strategic cooperation agreements with Luxaviation Group and Savills, and its successful $ 2.5 billion acquisition of Sirius International Insurance Group in April 2016.

“What makes CMIG unique lies in its shareholder base that consists of over 50 Chinese strong private enterprises, which enables CMIG to make global investments. The shareholder structure and capital strength of CMIG can guarantee it successful foreign investments. Therefore, CMIG can search out different investment opportunities in Europe, Japan, ASEAN and the United States”,says Mr. Orlins.

Mr. Orlins believes that, “shareholder composition of CMIG is adequately diversified.Those shareholders from different industries and fields play different roles in CMIG. CMIG has a very extensive shareholder base, which enables the company to acquire professional knowledge of investment industries from its shareholders.”

When it comes to the overseas layout by CMIG, Mr. Orlins says, “it’s the investment that actually enhances the ties. Investments by CMIG in either Asia or the United States will be helpful to promote and strengthen China’s relations with the U.S. and with other countries, in facilitating exchanges among enterprises in both countries as well as between shareholders and investment targets. In addition, there will be a closer tie between Chinese people and the people of the rest world.” Investment by Chinese-funded Enterprises Welcomed in the U.S. Are investments by Chinese-funded enterprises welcomed in the U.S.? Mr. Orlins answers,“Generally speaking, local American governments welcome foreign investments, unless your investments are made in businesses or institutions related to national defense.” According to Mr.Orlins, when you make investments in the U.S., you should frequently be in contact with local governments, rather than the federal government.

As Chinese investors have provided over 100,000 jobs in the U.S., local governments regard Chinese investments as an additional opportunity to create jobs and, therefore, strive for investments by Chinese-funded enterprises.

Similar to other countries, the U.S. has both concerns from the perspective of national security, and considerations in regards to political comments and the economy which may cause trade protectionism. However, compared to many other developed economies, the United States has stricter conditions in terms of the safekeeping of national security.

“There are few investments in the U.S. that are directly related to national security issues. And there are few investments by Chinese companies that fail to go through the examination and approval process by the Committee on Foreign Investment in the United States.” Says Mr. Orlins.

“To some extent, the media should take the blame.” Mr. Orlins says.

The public opinions in the U.S. are easily influenced by the “China Threat Theory”. The media is more willing to report failed investment cases which are often put on front pages, rather than successful cases concerning the growth of 182 investors in the past six months.“A transparent discussion at the national level is required to objectively evaluate risks and benefits brought by Chinese investments.” The National Committee on United States-China Relations points it out clearly in a report. Established in 1966, the National Committee on United States-China Relations is a non-profit organization jointly launched by the Ford Foundation and Chinese Council on Foreign Relations, aimed at enhancing a mutual understanding between Americans and Chinese.

The efforts made by the National Committee on United States-China Relations on governmental exchanges between China and the United States have been generally applauded. For example, the Committee helped to promote the establishment of China-U.S. “Ping Pong Diplomacy” in 1972,received the visits to the U.S. paid by all Chinese leaders after Deng Xiaoping’s era, such as Chinese General Secretary, Xi Jinping’s visit to the U.S. in September 2015.

Actually, we have some doubts about the mutual understanding between the Chinese and Americans. Speaking from an observational point of view, Chinese are only familiar with the U.S. mainly through Hollywood films while Americans have a superficial understanding of China seen through the eyes of the American news media. This will inevitably incur certain cognitive bias.

As to such bias, Mr. Orlins says that civil contacts actually have increased in the form of geometric figures, and that civil relations are much better than governmental relationships. On the one hand, there are many Chinese students studying in the U.S.. More than 300,000 Chinese students are studying in universities and research institutes in the U.S., while an increasing number of Americans come to China. On the other hand, the number of Chinese investments made in the U.S. was nearly nothing ten years ago, while that number now has experienced a surge to billions of dollars per year.

This promotes civil exchanges between China and the U.S.. According to Mr. Orlins, only when Americans and Chinese work together, jointly run enterprises, solve problems and manufacture products together can they enhance mutual understandings.

The poor light cast on the Chinese media’s rights of speech in the U.S. explains why Americans know little about China, and only through the lens of the American media. “The Chinese media has had very few influences in the U.S.. I don’t know anyone else who also works with the Chinese media, except me. I am a special case.” Mr. Orlins says.

When it comes to Hollywood films, “The purpose of American films is to make money, rather than providing an opportunity for Chinese to know about the U.S.”

Eliminating Bilateral Investment Barriers Benefits both Chinese and American Enterprises

The high-profile Bilateral Investment Treaty (BIT) has experienced eight-years of negotiations since its launch in 2008. In June 2015, the BIT negotiation entered into a phase during which both governments exchanged negative lists. In September 2015, both parties made a second-round bid for negative lists. Chen Deming, the former minister of the Ministry of Commerce of the PRC, said this last March that the Chinese negative list was shrinking and that the last bid was “making a big step forward” which may not satisfy the U.S..”Mr. Orlins says, “I really hope BIT will be successful, but I’m worried that it will be hard to promote. It is a win-win agreement. If bilateral investment barriers could be eliminated, both Chinese and American enterprises will benefit.Everyone thinks it’s easy to make a promotion,however, it’s not the case.”“This problem will be left for the next U.S. President. I hope when the new president takes office, we can strengthen cooperation with China to reach an agreement.”

During the American 2016 President Election,U.S. policies toward China may bring about some uncertainties due to the changes in the executive branch. On May 2, U.S. Republican Nominee Mr.Donald Trump, , expressed on the campaign rally in Indiana that “China is raping the United States”and bombarded the Obama Administration’s trade policy towards China. U.S. Democtratic Nominee,Mrs. Hillary Clinton, another presidential candidate, has always adopted hard-line policies toward China.

“Unfortunately, discussions related to American presidential election issues and campaigns bear few connections with reality.” Mr. Orlins said, “When I phoned my friend who works in the presidential election center and complained about their opinions of China-U.S. relations, he answered me ‘why do you care so much about it?’ There is no significance about the discussions concerning health care, social security and taxation in the current phase.”

“My conclusion is that presidential candidates should have more reasonable attitudes toward taxation, health care, social security, China-U.S.relations and other issues including ISIS,Afghanistan and Iraq.” Mr. Orlins says.With respect to the problems faced by the Chinese economy, Mr. Orlins says, “The problems of the Chinese economy lie in whether China can maintain its sufficiently rapid growth rate, and whether the growth rate of the new economy represented by Internet, tourism and consumption can outpace the shrinking rate of the old economy represented by rebar, cement and real estate. I think it is possible for China to continuously maintain its good economic growth, but this will be difficult.”