Juan B. Tudela, Mayor of Municipality of Saipan, U.S.

Your Excellency Mr. Dominique de Villepin, Former Frime Minister of France, honorable General Christian, Quesnot, respectable Guo Gengmao, Acting Governor of Henan Province, Mr. Wang Wenchao, Secretary of Zhengzhou Municipal Committee, Mr. Zhao Jiancai, Mayor of Zhengzhou, and dear leaders and representatives,

Good morning.

I am Mayor of Saipan, U.S. and I'd like to pay my respects to all the participating representatives from Asia-Pacific region and representatives from our region as well as Asia-Pacific CEO Association, International Outsourcing Center, Henan Provincial Government and Zhengzhou Municipal Government.

First of all, I want to express my thanks to the Mayor of Zhengzhou for kindly inviting me to participate in this important summit and discuss with you the major issue of "the role of global outsourcing in promoting world prosperity". I'd love to share with you some experiences of our Saipan city. As is known to everybody, cross-regional trade is happening with increasing frequency, workers are demanding higher salaries and world resource trade is reshuffling. I will make some explanations about Saipan first. Saipan is the capital of the United States Commonwealth of the Northern Mariana Islands (CNMI), in the northwestern Pacific Ocean. Saipan is also a pass of the United States about 25 marine miles away from Guam and 2 thousand kms from South Korea. Before 2005, the textile industry was our main industry and it has died away. Now, tourism is our another important industry. Tourists from Japan, South Korea and China in particular account for a significant proportion. Ever since January, 2005 when the World Trade Organization ruled that many of our textile companies should operate outside our island or reduce their operations in our island, our annual industry revenue of billions of dollars dropped sharply. Now in face of such a bad financial situation, a lot of factories and some warehouses are empty in Saipan. This is because China's labor costs are much lower than Saipan's. Therefore many companies outsource manufacturing enterprises to China, and many Chinese manufacturers are also increasing exports to the United States, and then they will use the economy of scale and benefits more often to further reduce economic costs.

Now in Saipan, a lot of smaller manufacturers are beaten by Chinese competitors. The commodity prices of many local Chinese manufacturers are even lower than the costs of some U.S. manufacturers. If it goes on like this until new market forces and new globally balanced prices are set up, manufacturers may be required to further reduce labor costs in the future such as in India or South American countries. We are also looking for more outsourcing opportunities in food and textile industries. We can also see that tourism is playing a more and more important role in our island, because our island is clean and pleasant in weather. Therefore, we enjoy high favor among overseas tourists. Meanwhile, commercial gambling and gaming is also one important business we need to tap into in order to give full play to the driving force of tourism.

Now in Saipan, there are many related industries. For example, we set up many casinos in our island. I would like to explain two important advantages we have that drive the development of our island.

The first one is the labor force from China, South Korea and the Philippines. Some of them only stay temperarily in our island and the majority of them are hired by private sectors.

The second one is that our products can be sold in the United States and at the same time, under the control of the local government, the wage level is well regulated and reaches the minimum wage level of the U.S.. Besides, the United States Congress and the media institutions also pay a lot of attention to us and they bring the wages of these migrant workers under better control and have made a very good policy planning this year. Due to the changeable situation in the textile industry, we can see that, the cost is increasing, so a lot of factories need outsourcing to China, India and other countries, which lead to fundamental changes in American exportation. What's more, a number of changeable agreements worldwide and loosened policies, which have come into effect since 2005, cause many of our factories to leave Saipan. So, we can see the changing rules in China as well as in the world and we can also see growing wages and changed labor environment. Thus, outsourcing is as changeable as the environment and weather, exerting great influence on our industries. 2005 witnessed a significant change and we have also seen that more trades could be done between the developing and developed countries to draw on each other's strengths.

As international trade is continuously growing, we need not only make more use of each other's resources in trade including economic resources but also make more use of economic assistance to reduce costs. In order to promote the investment in our island and improve our business environment, we have recently adopted a law to encourage investment such as reducing taxes and a lot of incentive plans for capital investment. Although, it's still early to say that these strategic policies can bring us a lot of positive factors, now Saipan is making every effort to improve the infrastructure and attract more investors. As a tourist attraction, we hope to receive more tourists to to enjoy our beautiful scenery.

All in all, Saipan has a lot of business opportunities and is very beautiful. Now what we need do is to continuously improve our Saipan and increase our share of tourism in the region and around the world. Thank you.