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The Impact of Trade with China on New York State and Opportunities for Economic Growth

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The Impact of Trade with China on New York State and Opportunities for Economic Growth THE IMPACT OF TRADE WITH CHINA ON NEW YORK STATE AND OPPORTUNITIES FOR ECONOMIC GROWTH HEARING BEFORE THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION ONE HUNDRED ELEVENTH CONGRESS FIRST SESSION _________ July 23, 2009 _________ Printed for use of the United States-China Economic and Security Review Commission Available via the World Wide Web: www.uscc.gov UNITED STATES-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION WASHINGTON: SEPTEMBER 2009 U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION CAROLYN BARTHOLOMEW, Chairman LARRY M.WORTZEL, Vice Chairman Commissioners: PETER T.R. BROOKES Hon. WILLIAM A. REINSCH DANIEL BLUMENTHAL Hon. DENNIS C. SHEA ROBIN CLEVELAND DANIEL M. SLANE JEFFREY FIEDLER PETER VIDENIEKS Hon. PATRICK A. MULLOY MICHAEL R. WESSEL MICHAEL R. DANIS, Executive Director KATHLEEN J. MICHELS, Associate Director The Commission was created on October 30, 2000 by the Floyd D. Spence National Defense Authorization Act for 2001 § 1238, Public Law No. 106-398, 114 STAT. 1654A-334 (2000) (codified at 22 U.S.C.§ 7002 (2001), as amended by the Treasury and General Government Appropriations Act for 2002 § 645 (regarding employment status of staff) & § 648 (regarding changing annual report due date from March to June), Public Law No. 107-67, 115 STAT. 514 (Nov. 12, 2001); as amended by Division P of the "Consolidated Appropriations Resolution, 2003," Pub L. No. 108-7 (Feb. 20, 2003) (regarding Commission name change, terms of Commissioners, and responsibilities of Commission); as amended by Public Law No. 109-108 (H.R. 2862) (Nov. 22, 2005) (regarding responsibilities of Commission and applicability of FACA); as amended by Division J of the “Consolidated Appropriations Act, 2008,” Public Law No. 110-161 (December 26, 2007) (regarding responsibilities of the Commission, and changing the Annual Report due date from June to December). The Commission’s full charter is available at www.uscc.gov. ii CONTENTS _____ THURSDAY, JULY 23, 2009 THE IMPACT OF TRADE WITH CHINA ON NEW YORK STATE AND OPPORTUNITIES FOR ECONOMIC GROWTH Introductory remarks by Dr. William Destler, President of Rochester Institute of Technology…………………………………………………………………………….1 Opening statement of Chairman Carolyn Bartholomew………………………………2 Opening statement of Commissioner Dennis C. Shea, Hearing Cochair.……………..3 Opening statement of Commissioner Patrick A. Mulloy, Hearing Cochair.…………..4 PANEL I: THE IMPACT OF TRADE WITH CHINA ON NEW YORK STATE Statement of Dr. Ron Hira, Associate Professor of Public Policy, Rochester Institute of Technology, Rochester, NY…………………………………………………………....5 Prepared statement…………………………………………………………………...8 Statement of Mr. John Perrotti, CEO, Gleason Corp., Rochester, NY……………….18 Prepared statement…………………………………………………………………. 20 Statement of Dr. Willy C. Shih, Professor of Management Practice, Harvard Business School, Boston, MA………………………………………………………………….. 23 Prepared statement…………………………………………………………………..26 Panel I: Discussion, Questions and Answers ……………………………………. … 30 PANEL II: THE IMPACT OF CHINESE COMPETITION ON LOCAL COMPANIES AND COMMUNITIES Statement of Mr. James V. Bertolone, President, Rochester Labor Council (AFL-CIO), Rochester, NY…………..……………………………………………………………53 Prepared statement…………………………………………………………………57 Statement of Mr. William A. Johnson, Jr., former mayor of the city of Rochester, and Distinguished Professor of Public Policy and Urban Studies, Rochester Institute of Technology, Rochester, NY……………………………………………………….....59 Prepared statement………………………………………………………………....63 Statement of Mr. Ed Kowalewski, Director of International Trade and Investments, Upstate Empire State Development Corporation, Buffalo, NY……………………..70 Prepared statement…………………………………………………………………72 Panel II: Discussion, Questions and Answers …………………………………...... .74 iii PANEL III: GOVERNMENT AND INSTITUTIONAL PERSPECTIVES ON CURRENT OPPORTUNITIES FOR GROWTH IN NEW YORK STATE Statement of Mr. Peter Robinson, Vice President and Chief Operation Officer, University of Rochester Medical Center and Strong Health, Rochester, NY……………………87 Prepared statement………………………………………………………………. ..89 Statement of Ms. Linda Dickerson Hartsock, Director, Center for Clean Tech Entrepreneurship, The Tech Garden, Syracuse, NY…………………………………92 Statement of Mr. Nicholas Rostow, University Counsel and Vice Chancellor for Legal Affairs, State University of New York, Albany, NY……………………………….. 94 Prepared statement………………………………………………………………… 97 Statement of Mr. Paul Vargovich, President, National Solar Technologies, Depew, NY…………………………………………………………………………………….98 Prepared statement…………………………………………………………………101 Panel III: Discussion, Questions and Answers ………………………………… …102 PANEL IV: ADVANCED R&D IN SUNRISE INDUSTRIES THAT CAN LEAD TO GROWTH FOR LOCAL COMPANIES Statement of Dr. Nabil Nasr, Director of the Center for Integrated Manufacturing Studies, Rochester Institute of Technology, Rochester, NY………………………………….117 Prepared statement…………………………………………………………………120 Statement of Dr. Marnie LaVigne, Director of Business Development, University of Buffalo Center for Advanced Biomedical and Bioengineering Technology, Buffalo, NY……………………………………………………………………………………123 Prepared statement………………………………………………………………….126 Statement of Mr. Edward Patton, Director of Sales and Marketing, Rochester Precision Optics, West Henrietta, NY………………………………………………………….129 Prepared statement…………………………………………………………………133 Statement of Mr. Clive R. Barons, Vice President, Strategy Integration, Fuji Xerox Operations, Webster, NY…………………………………………………………….136 Prepared statement…………………………………………………………………139 Panel IV: Discussion, Questions and Answers……………………………………...147 PUBLIC COMMENT SUBMITTED FOR THE RECORD Public comment submitted by Jean Public of Florham Park, New Jersey………….158 ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD Statement of Dr. Sam Natapoff, Senior Advisor to New York State Governor David A. Paterson and Deputy Commissioner for International Development at the New York State Department of Economic Development, New York, NY…………………………..159 iv Statement of Charles E. Schumer, a U.S. Senator from the State of New York……..166 Statement of Kirsten E. Gillibrand, a U.S. Senator from the State of New York……169 Statement of Louise M. Slaughter, a U.S. Congresswoman from the State of New York…………………………………………………………………………………..172 v THE IMPACT ON TRADE WITH CHINA ON NEW YORK STATE AND OPPORTUNITIES FOR ECONOMIC GROWTH _________ THURSDAY, JULY 23, 2009 U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION The Commission met in Room 2240, Louise M. Slaughter Building, Rochester Institute of Technology, Rochester, NY at 8:45 a.m., Chairman Carolyn Bartholomew, and Commissioners Patrick A. Mulloy and Dennis C. Shea presiding. INTRODUCTORY REMARKS BY DR. WILLIAM DESTLER, PRESIDENT OF ROCHESTER INSTITUTE OF TECHNOLOGY DR. DESTLER: I want to welcome the U.S.-China Economic and Security Review Commission to RIT and thank the Commissioners, especially Patrick Mulloy and Dennis Shea, for the recognition of the importance of upstate New York to the American economy. I also wanted to recognize Ron Hira, Professor of Public Policy here at RIT, who helped organize today's hearing, as well as our own Professors Bill Johnson and Nabil Nasr who will be testifying before the Commission today. It is my hope that this event will provide USCC with a better understanding of the impact of U.S.-China policies on upstate businesses and communities and ultimately inform Congress on possible reforms that might enhance economic development in the region. Upstate New York has traditionally been a strong economic driver, particularly in the manufacturing sector. We've spawned many nationally recognized international corporations in the manufacturing sector, of course, including Kodak, Bausch & Lomb, and Xerox, right here in Rochester. But the region and our manufacturing industries, in particular, are facing significant competition from overseas, and this competition needs to be addressed, and ways need to be found to assist businesses in retaining and improving market share and growth. So a review of how U.S. economic and trade policies with China impact our ability to compete is a significant step in developing stronger federal policies, to improve the manufacturing environment locally and throughout the nation. So, again, I would like to thank the USCC for its efforts and wish its Commissioners the best today and in the future as you seek to address and improve American economic and security issues. Welcome to RIT. 1 CHAIRMAN BARTHOLOMEW: Thank you. Dr. Destler, thank you very much for your kind and welcoming remarks. On behalf of all of the Commissioners and the staff of the Commission, I want to thank you for hosting this hearing at this magnificent facility, and I understand that you spent many years down in the Washington, D.C. area, so-- DR. DESTLER: I did and emerged unscathed. [Laughter.] OPENING STATEMENT OF CHAIRMAN CAROLYN BARTHOLOMEW CHAIRMAN BARTHOLOMEW: Good morning, everybody, and welcome to today's hearing on "The Impact of Trade with China on New York State and Opportunities for Economic Growth." I'm Carolyn Bartholomew, the Chairman of the USCC for the 2009 reporting year. Today's hearing will be cochaired by Commissioners Patrick Mulloy and Dennis Shea. For those of you who aren't aware of our organization, we are a bipartisan Congressional Commission composed of 12 members, six of whom are selected by the Majority and Minority Leaders of the Senate and six from the Speaker and the Minority Leader of the House. Commissioners serve two-year terms. Congress
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