A business relationship remains a vital component of bilateral efforts between the US and China, despite diminishing roles of the central and federal governments, experts say.

Chas Freeman, a former assistant secretary of defense for International Security Affairs from 1993-94 and the main interpreter for President Nixon during his visit to China in 1972, spoke about the business growth of China on Tuesday at an event held by the US-China Chamber of Commerce and law firm Chadbourne & Parke.

"China's had a couple of bad centuries, but it's bounced back, and it's on track soon to regain its millennial status as the largest economy in the world," he said. "Chinese think that's the natural state of affairs, of course. But even Chinese are surprised at the speed with which this has happened; it is truly remarkable."

Freeman compared the China of today with the China from 1972, a pivotal year in the relationship between US and China when an American president visited China for the first time and normalized relations between the two countries.

"In 1972, China's worldwide imports and exports - two-way trade - came to a grand total of $6.3 billion dollars, including US-China trade of about $95 million," he said. "Last year, China's trading goods alone was $3.9 trillion, and US-China trade in goods and services came to $536 billion.

"There was no investment by either country in the other in 1972; now there's investment by American firms everywhere in China, and our states and localities are pushing for some sort of modern version of an Open Door policy for Chinese investment here. We need the money, and we need the markets it leads us to," Freeman said.

As much as China has grown in the last four decades, the country has had to deal with the problems that its own success has created, he said, which include over-investment and under-consumption, abuses of power, and "inadequate financial support for [the country's] booming private sector".

Freeman said that details of China's new reforms won't come to light until the CPC's plenary session in November, but "China has very little margin for error", he said. "It needs to tread carefully as it adopts a new way of doing things. China's leaders are haunted by their country's horrifying history of famine, natural disaster, and foreign invasion."

The heart of the relationship between the US and China has been in their business dealings, and Freeman said that should continue to be the case. "Since shortly after President Nixon reopened relations with China in 1972, business people have been the most powerful drivers of closer ties between our two countries," said Freeman. "As a former federal official, it pains me to have to admit it, but the roles of the federal and central governments in the relationship have diminished as those in the private sector and the state and local governments on both sides have increased."

Freeman mentioned President Xi Jinping's proposition that the US and China try to develop "a new sort of great power relationship between" the two countries.

"I think he's right. Expanded business between China and the United States is absolutely essential to the success of his project," he said. "Huge as our economic interaction has become, the relationship between us has the potential to become an even larger and more vital element in the prosperity of both countries."

amyhe@chinadailyusa.com

(China Daily USA 10/16/2013 page3)