Bloomberg: China's Competitiveness Rests on Open Markets

SHANGHAI, China — The key to China's future competitiveness lies in open markets and greater freedoms that will attract investment and vital talent, Mayor Bloomberg said today during a visit to China's financial capital.

Both America and China face challenges in fighting protectionism and improving their investment environments, Mr. Bloomberg said in a speech at Shanghai's prestigious Fudan University.

To attract the kind of talent it needs to raise its competitiveness, China needs open markets, he said.

"In the U.S., our challenge is to open our labor markets to more foreign workers, while in China, it seems the challenge is to open capital markets to more foreign investment," Mr. Bloomberg said.

"Foreign investment creates the domestic jobs that will help keep educated Chinese men and women from leaving the country," he said.

Mr. Bloomberg, who visited Beijing earlier in the week and was heading to the United Nations climate conference in Bali, Indonesia, later in the day, praised China for the progress it has made, including allowing both the New York Stock Exchange and NASDAQ to open offices in China.

But more needs to be done, Mr. Bloomberg said.

"Here in China, I think it's fair to say that some areas of the economy are over-regulated, such as the capital markets," he said.

Protectionism hurts competitiveness, in both countries, he said.

"In the long run, protectionist policies — and policies promoting economic nationalism — only hurt the industries they are trying to help. Certainly, that was true of American protection of the auto industry and Japanese protection of its banking industry," he said.

One key to countering shortages of highly skilled labor is to allow greater freedoms, Mr. Bloomberg said.

"The Olympics will be an incredible opportunity for China to showcase the impressive progress it has made in recent years, but it will also be a reminder to people across the world that much work remains to be done in building a harmonious society, where differences of opinion on politics, philosophy, and faith are accepted for what they are: part of the natural order of life," he said.

"Because in the global economy, talented people want to live in places that offer not only exciting careers, diverse cultural opportunities, safe streets, good schools, and clean air, they also want to live where they are free to be themselves," he said.