[Federal Register Volume 64, Number 2 (Tuesday, January 5, 1999)]
[Notices]
[Pages 477-479]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-131]


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DEPARTMENT OF COMMERCE

International Trade Administration


Multi-Agency Business Development Infrastructure Mission to China 
and Hong Kong, and Business Development Mission to Korea

AGENCY: International Trade Administration, Commerce.

ACTION: Notice of mission statement.

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I. Description of the Missions

    The Department of Commerce announces that Secretary of Commerce 
William M. Daley will travel to South Korea March 10-13, 1999, for a 
business development mission, and to China and Hong Kong March 14-20, 
1999, to lead a multi-agency business development infrastructure 
mission.
    China/Hong Kong. The multi-agency infrastructure mission to China, 
which was announced during the Presidential Summit in June of this 
year, is designed to include cabinet and other senior officials 
representing infrastructure-related agencies in the U.S. Government. 
The business development mission will include large, medium, and small 
firms representing sectors such as, but not limited to, information 
technologies, power generation, oil and gas exploration and downstream 
development, construction including residential dwellings, environment, 
transportation, and engineering and financial services in support of 
efforts to involve more U.S. companies in China's infrastructure 
development. The Secretary, cabinet agency representatives, and mission 
members will stop in Hong Kong to pursue substantial infrastructure 
opportunities there and to meet with Hong Kong officials and local U.S. 
business.
    As currently envisioned, the mission will travel to Beijing, Hong 
Kong, and two other cities to be determined. The itinerary in Beijing 
will largely consist of bilateral policy meetings with Chinese senior 
economic officials, of forums on trade initiatives and issues, and of 
meetings for U.S. participating firms with key decision makers in 
relevant ministries and organizations. Outside of Beijing, we envision 
site visits to key infrastructure projects and to joint ventures 
between U.S. firms and local firms, round table discussions with senior 
economic development officials, and matchmaking business appointments 
for mission participants.
    The mission also presents an opportunity to implement a number of 
other commercial initiatives announced during the Presidential Summit 
in June. The state and non-state enterprise forum, the housing, 
insurance, e-commerce, environment, and aviation initiatives will 
receive focus and attention during the visit.
    Korea. Building on the momentum of President Clinton's November 
1998 visit to Korea in which Secretary Daley participated, the mission 
to Korea will broaden commercial ties and help U.S. companies take 
advantage of opportunities arising out of Korea's economic reform 
program. The mission will fulfill President Clinton's commitment to 
President Kim Dae Jung that Secretary Daley will bring a mission to 
Korea and demonstrate the Administration's support for Korea's recovery 
and restructuring efforts.
    The mission to Korea will bring U.S. companies to this market at a 
time when it is poised for recovery and is making unprecedented changes 
in the way business is done. Despite the current economic slowdown, 
there are many good opportunities for U.S. firms willing to look for 
and pursue them. Exporters need to be creative with financing and to 
identify instruments addressing short-term liquidity problems, 
including U.S. Government institutions such as the Export-Import Bank.
    In Korea, the focus will be on commercial opportunities, including 
those presented by the continuing IMF-mandated economic reform program. 
The Secretary will meet with government officials to discuss bilateral 
concerns, advocate for U.S. commercial interests, and advance other 
relevant policy initiatives. Briefings and matchmaking business 
appointments will be made for members of the business delegation. 
Individual country briefings will include local public and private 
sector officials to discuss developments in the country that affect the 
commercial environment.
    The mission will depart Washington on March 10. One group will 
visit Korea March 12-13 and a second group will visit China March 14-
20.

[[Page 478]]

II. Commercial Setting for the Missions

    China is considered to offer the lion's share of future growth in 
sales of goods and services for many American companies. Exports 
reached $13 billion and imports, $62.5 billion in 1997. China has 
become our fourth largest trading partner and supplier of imports. 
China is our fifteenth largest destination for U.S. exports. Since the 
mid-1980s when U.S. trade with China began to grow substantially, U.S. 
imports from China have continually outpaced U.S. exports to China. 
This has resulted in a large and growing trade deficit, now our second 
largest deficit after Japan. The deficit has grown four times since 
1990 ($10.4 billion) to $49.7 billion in 1997, and is projected to 
reach $58 billion in 1998.
    Beijing is the capital and the locus of much of the decision making 
on infrastructure development, as well as on trade policy. Besides 
Beijing, two other stops with significant infrastructure opportunities 
will be selected.
    Hong Kong, which reverted to Chinese sovereignty on July 1, 1997, 
is now a Special Administrative Region (SAR) of China. HK SAR operates 
under the late Deng Xiaoping's ``one country, two systems'' model 
wherein HK SAR continues largely with its way of life with minor 
modifications. A chief executive, Tung Chee Hwa, chosen by a 
``Selection Committee'' of 400 people, now presides over the 
government. The HK SAR is a separate customs territory, maintains its 
own freely convertible currency, enjoys independent status in the WTO 
and other multilateral and bilateral fora, and continues with one of 
the most open and free market based economies in the world today. China 
is responsible for Hong Kong's defense and foreign affairs.
    Hong Kong's most significant challenge currently is the Asian 
financial crisis, which has resulted in a drop of some 50 percent in 
real estate prices, and over 60 percent in stock prices. Recent 
measures by the HK SAR government to defend the Hong Kong dollar 
against speculative attacks and to stabilize the stock market through 
the direct purchase of shares appear to have had a positive effect, 
with interest rates returning to normal levels and the Hang Seng Index 
recovering by over 30 percent since the government's intervention. Hong 
Kong is our 11th largest destination for exports. The U.S. ran a $4.8 
billion trade surplus with Hong Kong in 1997. The American Chamber of 
Commerce in Hong Kong is the largest U.S. chamber outside of North 
America, with approximately 2,600 members.
    Before the financial crisis hit Korea in the fall of 1997, Korea 
was our fifth largest export market, accounting for $25 billion in 
exports and a $2 billion trade surplus that year. Under the auspices of 
the $58 billion stabilization package put together last winter under 
IMF leadership, financial markets in Korea have stabilized and 
recovered somewhat from last winter's lows. The domestic economy, 
however, has gone into recession. Unemployment has tripled over the 
past twelve months, while real GDP could fall by as much as 7 percent 
this year. There are signs, however, that the economy will soon turn 
the corner. A number of forecasters expect a return to positive growth 
in the second half of 1999.
    Korea has made tremendous progress in its reform program, 
particularly in the areas of capital account liberalization and 
financial sector restructuring. Corporate restructuring remains the 
linchpin to recovery yet is also the most difficult area of reform for 
the government to influence.
    The recession combined with the scarcity of trade financing has 
severely affected U.S. exports to Korea. Exports for January-October 
1998 are down 42 percent from the same period in 1997. U.S. imports 
from Korea were up 2 percent. During President Clinton's November visit 
to Korea, the Export-Import Bank committed another one billion dollars 
in medium term credits for Korea, bringing Ex-Im's total short and 
medium term commitments to $4 billion for 1998.

III. Goals for the Missions

    The missions will further both U.S. commercial policy objectives 
and advance specific business interests. They are aimed at:
     Expanding U.S. exports to China's and Hong Kong's priority 
infrastructure development sectors and projects; underscoring the need 
to reduce our growing trade deficit with China, estimated to be $60 
billion in 1998;
     Implementing commercial initiatives agreed to during the 
June Summit and the 12th session of the U.S.-China Joint Commission on 
Commerce and Trade;
     Advocating on behalf of U.S. firms already active in 
China, Hong Kong, and Korea;
     Resolving market access issues for U.S. companies in all 
locations;
     Maintaining visibility for U.S. companies wishing to gain 
or maintain a foothold in the Korean market once recovery begins; and
     Demonstrating U.S. support for continued enterprise, 
financial and corporate reforms in China and Korea.

IV. Scenario for the Missions

    The mission to China and Hong Kong will emphasize the need for 
greater U.S. participation in China's and Hong Kong's infrastructure 
development and advance outcomes and initiatives agreed to during the 
U.S.-China 1998 Summit. The mission to Korea will emphasize the long-
term U.S. business interest in the country and reaffirm the 
Administration's positive view of the economic reforms occurring under 
President Kim's administration and the IMF stabilization package.
    Briefings and matchmaking business appointments will be made for 
members of the business delegation. The business of the mission will 
consist of:
     Embassy briefings on the economic/commercial climates;
     Meetings with Ministers and other senior level government 
officials with responsibilities for the mission's focus sectors;
     Meetings with potential buyers, agents/distributors and 
partners.
     Meetings with the U.S. business community.
     Forums, roundtables, and other policy focused discussions 
with senior economic decision-makers.
    The Secretary will meet with the leadership and other government 
senior officials and with U.S. business representatives in all three 
locations. In China, the Secretary will underscore the need for greater 
market access in key sectors, to reduce our growing trade imbalance 
with China, and to advocate for U.S. firms bidding on China's priority 
infrastructure development projects. The Secretary will urge continued 
progress from China in meeting both market access and other demands of 
the WTO accession process. In Hong Kong, the Secretary will likely meet 
with the Chief Executive of the SAR and other senior leaders to signify 
continued strong U.S. interest in the integrity of Hong Kong's autonomy 
and free market system under the ``one country, two systems'' 
sovereignty arrangement with China. He will also urge selection of U.S. 
firms for Hong Kong's infrastructure efforts with $30 billion in 
projects to be developed over the next five years. Additional forums on 
the free market system and China's reform agenda for state and non-
state enterprises, housing, commercial law and other topics are 
possible.
    While in Korea, the Secretary will emphasize U.S. market access 
concerns, advocate on behalf of U.S. companies, promote bilateral and 
multilateral trade

[[Page 479]]

policy objectives, and reiterate USG support for Korea's economic 
reforms, while stressing that continued reforms are key to maintaining 
economic, political and commercial momentum. He will also co-chair a 
meeting of the U.S.-Korea Committee on Business Cooperation (CBC).

V. Criteria for Participation of Companies

    The recruitment and selection of private sector participants in 
each mission will be conducted according to the Statement of Policy 
governing Department of Commerce-led trade missions announced by 
Secretary Daley on March 3, 1997. Participants will be selected 
separately for the China/Hong Kong business development infrastructure 
mission and for the Korea business development mission and should fill 
out separate applications for each mission. Companies may apply for 
either or both missions, and will be selected according to the criteria 
set for below. Approximately 15 companies will be selected for the 
China/Hong Kong business development infrastructure mission and 
approximately 10 companies will be selected for the Korea business 
development mission. Selection for one mission does not confer priority 
for selection for the other mission.

Eligibility

    Participating companies must be incorporated in the United States. 
A company is eligible to participate only if the products and/or 
services that it will promote on the relevant mission either (a) are 
manufactured or produced in the United States; or (b) if manufactured 
or produced outside the United States, are marketed under the name of a 
U.S. firm and have U.S. content representing at least 51 percent of the 
value of the finished good or service. (At the discretion of the 
Department, which will generally be exercised on a mission-specific and 
sector-by-sector basis, the 51 percent U.S. content requirement may be 
modified or waived.)

Selection Criteria

    Companies will be selected for participation on the basis of:
     Level of seniority of designated company representatives 
and its appropriateness to the mission objectives;
     Relevance of a company's business and product line to the 
plan and objective of the mission (see below);
     Past, present and prospective business activity in Asia, 
particularly in China, Hong Kong and/or Korea, as applicable; and
     Diversity of company size, type, location, demographics 
and traditional under-representation in business.
    In addition, the Department may consider whether the companies' 
overall business objectives, including those of any U.S. or overseas 
affiliates, are fully consistent with the missions' foreign and 
commercial policy objectives.
    Participants in the China portion of the mission will be drawn from 
several infrastructure sectors, including, but not limited to, the 
following:
     Environmental technologies,
     Information technologies/telecommunications,
     Housing construction and building materials,
     Power generation,
     Oil exploration and development,
     Transportation, and
     Engineering and financial services.
    Companies for the Korea portion of the mission will be drawn from 
several sectors, including, but not limited to, the following:
     Environmental technologies,
     Information technologies/telecommunications,
     Infrastructure, and
     Energy.
    An applicant's partisan political activities (including political 
contributions) are irrelevant to the selection process.

VI. Time Frame for Applications

    Applications for the business development mission to China and 
Korea will be made available beginning on or about January 4, 1999. The 
fees to participate in these missions have not yet been determined. The 
fees will not cover travel or lodging expenses. For additional 
information on the trade missions or to obtain an application, business 
persons should be referred to Lucie Naphin, Director of the Office of 
Business Liaison, or Jennifer Andberg, Office of Business Liaison, at 
202-482-1360. Applications should be submitted to Lucie Naphin by 
February 1, 1999, in order to ensure sufficient time to obtain in-
country appointments for applicants selected to participate in the 
mission. Applications received after that date will be considered only 
if space and scheduling constraints permit.

    Dated: December 29, 1998.
Lucie Naphin,
Director, Office of Business Liaison.
[FR Doc. 99-131 Filed 1-4-99; 8:45 am]
BILLING CODE 3510-25-P