China-US relationship complex

By working together, two powerhouses can remain stable, says China's ambassador to US

Editor's note: Texas A&M University, the George Bush Presidential Library Foundation, the George Bush School of Government and Public Service and the Chinese People's Association for Friendship with Foreign Countries organized the fifth China-US Relations Conference on Sunday in College Station, Texas. Zhang Yesui, the Chinese ambassador to the United States, delivered a speech about the Sino-US relations at the conference held at the George Bush Presidential Library. The following is the full text of the speech.

This year marks the 40th anniversary of the reopening of relations between China and the United States. Forty years ago, the Chinese and American leaders, with great vision and political wisdom, made the decision to reach out to each other after 22 years of estrangement and hostility. It was a decision that opened a new page in China-US relations and brought about profound changes in international relations.

Forty years later, despite ups and downs, with the shared commitment and joint efforts from the leadership, governments and people of all walks of life in both countries, the China-US relationship has surged ahead and has come a long way. Today, the China-US relationship has become one of the most important and dynamic relationships in the world.

As I see it, the China-US relationship has the following four distinctive features:

Firstly, the economic interests of China and the United States have been closely interconnected. Forty years ago, our trade and economic activities were almost nonexistent. We are now each other's second largest trade partner. Last year, bilateral trade reached $385 billion. China has been the US's fastest growing export market for the last 10 years, and US exports to China increased by 468 percent from 2000 to 2010, while its exports to other countries increased only by 55 percent. The US continues to be the No 1 source of foreign direct investment for China, and China has become the biggest foreign creditor for the US.

Secondly, dialogue and consultation at various levels have increased and improved. There have been frequent high level visits and exchanges. Over 60 dialogue and consultation mechanisms have been established covering a wide range of areas, including the Strategic and Economic Dialogue, the Joint Commission on Commerce and Trade, the High-Level Consultation on People-to-People Exchanges and the recently established Strategic Security Dialogue and the Asia-Pacific Affairs Consultation. These mechanisms have provided unique and effective platforms for China and the US to build trust and expand cooperation.

Thirdly, there have been extensive and growing social interactions between our two countries. Every year, more than three million visits are made between China and the US. About 9,000 people are traveling across the Pacific each and every single day. We have 38 pairs of sister province/state relationships and 169 sister city relationships. As we speak, about 130,000 Chinese are studying in the US, and over 20,000 Americans are studying in China. Currently, about 300 million people in China are learning English, and more than 200,000 people in the US are learning Chinese.

Finally, the two countries have kept effective communication and cooperation on many important regional and global issues. China and the US are working closely in almost every field, from traditional security and development areas to newly emerged issues such as anti-terrorism, non-proliferation, climate change, energy and environmental protection; from addressing the global financial crisis and facilitating world economic recovery to the realization of the UN Millennium Development Goals. China-US cooperation is assuming an increasing global implication.

It is fair to say that China-US relationship has evolved to such a point that would surprise even the most imaginative person 40 years ago. The fundamental reason and driving force lie in the expanding common interests between the two countries and shared responsibilities in ensuring sustainable development and dealing with emerging global challenges.

At the same time, China-US relationship is probably one of the most complex bilateral relationships in the world. China and the United States are different in political system, social value, historic and cultural traditions. There is a huge gap in the level of economic and social development, with China being the largest developing country and the US being the largest developed country. China is an emerging economy while the US is a strong established power. These differences have decided that we do not see eye to eye with each other on many issues. These differences can also lead to misunderstandings and mistrust in each other's strategic intentions.

In the history of human civilization, there perhaps has never existed such a bilateral relationship as the China-US relationship before. Therefore there is no ready path to follow and no historical experience or model to copy. How we finally choose to manage, shape and grow this relationship will determine its course in the next 40 years.

In January this year, President Hu Jintao paid a successful state visit to the United States. Among the many results that came out of the visit, the most meaningful was the shared commitment that President Hu and President Barack Obama made in the Joint Statement, that the two sides will work together to build a cooperative partnership based on mutual respect and mutual benefit. This has laid the groundwork, and it depends on how we work together to make it happen. In my view, as we build this cooperative partnership, we should concentrate on the following four priorities:

No 1: We must view China-US relations from a new perspective.

In the era of globalization and given the size and the degree of interconnectedness of the two countries, China and the US can be regarded as a community of interests. This is not and should not be a zero-sum game relationship. If people continue to look at each other with the Cold War mindset, China and the United States will be drawn into confrontation and conflict. It is imperative to shift from the old habitual way of thinking and begin to frame China-US relations with a global view and from a strategic and long-term perspective. If we work together as partners, we would both emerge as winners.

No 2: We must work together to advance our mutual economic interests.

Economic and trade ties have always been the cornerstone and engine for our overall relations. Currently, China and the US are undertaking massive efforts to restructure our economies. The core of China's 12th Five-Year Plan (2011-2015) is to transform the mode of economic development and expand domestic consumption. The US is also striving to jump-start its economy through revitalizing American manufacturing, strengthening infrastructure and expanding export. This offers real opportunities not only for increased trade and investment activities, but also for expanding cooperation in such areas as clean energy, energy conservation, environmental protection, and infrastructure.

There is also great potential for collaboration at the sub-national level. In the past decade, 47 out of 50 states in America have seen a three digit, in some cases even four digit growth in their export to China. The China-US Governors Forum, which was launched this summer, has been well received by both sides, and will provide a new and effective platform to promote economic and trade ties at the sub-national level.

No 3: We must continue to improve strategic mutual trust.

Trust is the basis for any partnership. To a large extent, how deeply we trust each other determine whether we can cooperate, and how well we cooperate. It is imperative to have a correct judgement and understanding of each other's strategic intention and policy objectives. Following his successful visit to China in August, Vice-President Joe Biden wrote in the New York Times that "a successful China can make our country more prosperous, not less". Equally, a successful and growing America is also in China's interests.

We need close dialogues and communications in order to build strategic trust and avoid miscalculations and misperceptions. We should take advantage of the dialogue mechanisms we have put in place, in particular, the Strategic and Economic Dialogue, Strategic Security Dialogue and Asia-Pacific Affairs Consultation, and use them fully and wisely, in order to communicate in a prompt way and minimize the chances of conflicts and strategic surprises.

No 4: We must properly handle differences and disagreements.

In the history of China-US relations, the relationship would be smooth and stable when the core interests of both sides are taken seriously and taken care of, and would be less so and even strained when they are not.

The question of Taiwan is critically related to China's sovereignty and territorial integrity. It is an issue that the Chinese people feel strongly about. Last month, the United States announced another large-scale arms sale to Taiwan. This has seriously interfered in China's internal affairs, undermined China's security and damaged the China-US relations. We urge the US side to fully implement its commitments made in the three Joint Communiqus, especially the August 17 Communiqu, and take real actions to uphold the larger interest of China-US relations and peace and stability across the Taiwan Straits.

Our economic and trade relationship is so big and expanding so fast that it is only normal to have problems. But, to politicize economic problems will not work. To blame the renminbi exchange rate for the trade imbalance and to subsequently invoke protectionist measures will only push China and the US toward the brink of a "trade war," which is exactly what we should avoid when confronted with a sluggish world economy and international financial instability.

We recognize that there is trade imbalance between China and the United States. Such imbalance is caused by a combination of factors, including the structural trade and investment differences, divergent patterns of saving and consumption, and the international division of labor, rather than an issue of the renminbi exchange rate. In fact, the renminbi has appreciated by nearly 30 percent since the reform of its exchange rate regime started in July 2005. However, between 2005 and 2011, the US unemployment rate increased from 5.1 percent to 9.1 percent. This proves that renminbi appreciation alone will not help reduce the trade imbalance, nor will it help lower unemployment rate in the US.

We do not seek large trade surplus with the US. We have taken steps to import more from the US in an effort to address the imbalance. Domestically, we are working to improve our legal framework, strengthen intellectual property rights protection, and provide a favorable and level playing field for foreign businesses in terms of indigenous innovation and government procurement. It is important that the US side takes similar steps to ease the restrictions on high-tech exports to China, and provide an open and friendly environment for Chinese investment which can contribute to the US economy and employment.

Recently, in the United States, there has been a lot of interest in China's "rise". Some people see the rise more as an opportunity, while others regard it more as a threat. Some even suggested to contain China. Many people have debated the pros and cons of the China phenomenon.

The People's Republic of China has gone through an extraordinary journey in the 62 years since it was founded, particularly over the past 32 years of reform and opening up. China is now the second largest economy, the largest exporter and the biggest emerging market in the world. More than 300 million people in the rural areas have been lifted out of poverty. The average life expectancy has increased from 35 in 1949 to 73.5 years in 2010. The living standards, educational and cultural levels of the Chinese people have greatly improved.

However, despite China's impressive achievements, it is still a developing country in the true sense of the word. Our per capita GDP is only $4,400, 1/10 of that of the US and ranks behind 100th in the world. Based on the UN standard of one dollar a day, 150 million Chinese are still living under the poverty line. Unbalanced development exists between the urban and rural areas and among different regions; the structural problems in economic and social development remain acute; and economic growth, which excessively depends on resource input, is increasingly constrained by resource shortages and environmental problems. China's social security system is inadequate, lagging far behind those of the developed countries. There is clearly a long way to go.

China has chosen and will remain firmly committed to the path of peaceful development, which is defined as follows: China should develop itself through upholding world peace and contribute to world peace through its own development. It should achieve development with its own efforts and by carrying out reform and innovation; at the same time, it should open itself to the outside and learn from other countries. It should seek mutual benefit and common development with other countries in keeping with the trend of economic globalization, and it should work together with other countries to build a harmonious world of durable peace and common prosperity.

What has happened has already proved and will prove that China's peaceful development not only brings tangible benefits to the people of China, but also can positively contribute to the well-being of the rest of the world.

China cannot develop itself in isolation from the world. We have worked closely with the international community and played an important role in promoting world economic recovery and global financial stability. Steady and relatively fast growth of China's economy is in itself an important contribution to the world economy.

In recent years, China has contributed to over 10 percent of the world economic growth, over 12 percent to international trade. In the next 5 years, China's imports will reach $10 trillion, providing further opportunities to farmers, manufacturers, and workers in other parts of the world.

China is the only nuclear-weapon country that has publicly stated that it will not be the first to use nuclear weapons, or use or threaten to use nuclear weapons against non-nuclear-weapon states or nuclear-weapon-free zones. China has taken an active part in international cooperation in anti-terrorism and non-proliferation. China has played a constructive role in addressing such international and regional issues such as the Korean nuclear issue and Iranian nuclear issue. China has sent 210,000 peacekeeping personnel to 30 UN operations, more than any other permanent members of the UN Security Council.

We have actively participated in the G20 process, and will continue to encourage it to move from a crisis responding mechanism to a platform for international economic governance. China's increase in the quota and voting power in the World Bank and the IMF will enable us to play a more constructive role in improving world economic governance and economic rebalancing. We will continue to support the Doha round of talks for a balanced and win-win multilateral trading system with universal benefit. China is the first developing country to formulate and implement the National Climate Change Program. We will stick to international climate change negotiation, and work with others to protect our globe based on the principle of common but differentiated responsibilities.

We have reached out to our neighbors to build political trust through security dialogue and military exchanges. We have solved border issues with 12 neighboring countries sharing land border with us. We support the freedom and security of navigation in the South China Sea, and have worked with the relevant parties to promote maritime security cooperation. China is committed to peacefully resolving the maritime disputes with relevant countries through bilateral negotiations and friendly consultations.

China and the US share broad common interests in the Asia-Pacific. We respect the legitimate interest and presence of the US in the Asia-Pacific, and welcome a positive and constructive role by the US in this region. We support and welcome the United States' participation in the East Asia Summit. We attach great importance to the China-US Asia-Pacific Affairs Consultation and see it as an effective cooperative mechanism to advance bilateral interests as well as the common good for the entire region.

Peace, development and cooperation are common aspirations of mankind. In a world of growing multi-polarity, greater economic globalization and increasing global challenges, countries are brought together more closely than ever before. No country can stand alone.

Together, China and the United States account for about one third of the world economy, one quarter of the world population and one fifth of the international trade.

A stable and growing China-US relationship not only serves the fundamental interests of our two countries and two peoples, but also contributes to peace and development of the Asia-Pacific region and the world at large. We have to blaze a trail and create a new model of relationship. I strongly believe that by working together, China and the United States can achieve a lot not only for our two countries, but for the rest of the world.

(China Daily 10/24/2011 page12)