Thank you, Jason, for that kind introduction.
It’s a special privilege to be here at the Hopkins Nanjing Center, which has played such an important role in promoting mutual understanding between the United States and China. And there’s no better time to be here than just three weeks after Communist Party Chairman Xi Jinping stated in his first speech that: “China needs to learn more about the world, and the world also needs to learn more about China. I hope you will continue to make efforts and contributions to deepening the mutual understanding between China and the countries of the world.”
Chairman Xi’s message is directed squarely at those of you in this room – the future leaders of the United States and China who will contribute to enhancing mutual understanding in the future. And it is not unlike the message my generation responded to when President Nixon in his historic visit to China 40 years ago upheld “the hope that each of us has to build a new world order in which nations and peoples with different systems and different values can live together in peace, respecting one another while disagreeing with one another, letting history rather than the battlefield be the judge of their different ideas.”
As some of you know, I served on Henry Kissinger’s National Security Council staff during that period, and I have worked over the past 40 years in government service and the private sector to try to promote enhanced U.S.-China economic relations. And I now see our two countries on the verge of a new era in our bilateral economic relationship – one when we can explore new possibilities for “mutual benefit” and “win-win cooperation.”
At the same point, however, there are significant challenges that will need to be overcome in the U.S.-China economic relationship. And it will be up to all of you in this audience to navigate sometimes difficult waters in order to ensure shared prosperity over the next 40 years.
I want to share a few thoughts with you today about the current state of the bilateral economic relationship, as well as some views on the opportunities and challenges ahead.
Progress in U.S.-China Economic Relations
China’s stunning economic growth over the past three decades has lifted hundreds of millions of Chinese out of poverty and thrust China into global markets as the second-largest economy and world’s leading exporter. China’s foreign trade has grown over six-fold since joining the WTO in 2001, due in large part to its “Going Out” strategy, which was launched in 1999 to encourage investment abroad. The United States welcomes a strong, prosperous, and successful China that plays a key role in world affairs and adheres to international standards. And we are counting on China’s leadership to help meet the many challenges confronting the global economy. It is worth noting that when President Nixon first visited China forty years ago, the U.S.-China economic relationship was nonexistent. China’s economic policies were of little or no consequence to our domestic economy – nor did our economic policies have any effect on theirs.
Today the situation is very different.
In 2011, the United States imported $399 billion in goods from China and exported $103 billion to China – a nearly four-fold increase in imports and a five-fold increase in exports in the 10 years since China joined the WTO in 2001. And while the United States and China share many common interests – and the relationship has produced a number of mutual benefits – we must also recognize the several areas on which our positions diverge and where we do not prioritize the same values. What drove growth in China over the past 40 years is not likely to drive it over the next 40 years, so to address differences, and build on common interests, our economic relations over the next 40 years may need to be framed differently than in the past 40 years. Importantly, we must identify areas where U.S. interests and China’s interests converge.
Opportunities for Future Collaboration
I believe there are many possible areas for future U.S.-China collaboration that are “win-win” in nature. And, given that you are students, you may be interested to consider that many of these opportunities are in the area of science and technology cooperation. In fact, looking back, one of our most significant bilateral success stories is the U.S.-China Science and Technology Agreement, which was launched in 1979 by Deng Xiaoping and President Carter and began an era of robust government-to-government S&T cooperation.
And looking ahead, we can see that China’s 12th Five Year Plan includes a host of policy measures that would benefit not only China but the United States as well. A great example where we have shared interests in this area is China’s effort to improve intellectual property rights protection. Many of us were encouraged by China’s decision last year to establish a State Council-level leadership structure, led by Vice Premier Wang Qishan, to lead and coordinate IPR enforcement. This initiative is clearly in the interest of U.S. companies, and it’s also in the interest of innovators in China.
In fact, many of the compelling priorities for the United States and China following leadership transitions in each of our respective countries are internal in nature – jobs, economic growth, the environment, social equity – and will require imaginative and innovative solutions to which many of you in this audience will contribute. We must find ways to ensure that U.S.-China relations support these internal objectives in both countries, and that one side does not seek to accomplish them at the other’s expense. As we move forward, I believe there are several key areas where we can simultaneously advance U.S.-China economic relations, strengthen the American economy, and help China accomplish its own domestic agenda.
In fact, if we examine the 12th Five Year Plan, we can identify several of these areas where stronger bilateral cooperation would be mutually beneficial, including:
And, importantly in all of the above areas, the United States and China share a mutual interest to bring together Chinese and American governors and provincial and municipal leaders to collaborate on economic, energy, and environmental issues, which can provide a series of mutual benefits, including:
And that’s one of the reasons I’m excited to be in Nanjing today, as I’m looking forward to engaging the provincial and municipal leadership on these issues. And yesterday, I was in Hefei where I met with local leaders as well as visited the recently launched Eco-Partnership between Hefei and Columbus, Ohio.
This eco-partnership features cooperation projects between Ohio State University and the Hefei University of Technology in the areas of electric vehicle technologies, wetland conservation, energy efficient buildings, and urban planning – a terrific example of a tangible win-win opportunity. I believe there are more opportunities than ever before to make these kinds of connections and make progress in S&T cooperation. And, of course, American companies already are cooperating with Chinese counterparts.
For example, last year, I visited Chengdu and joined General Electric (GE) at the launch of its “Ecoimagination Challenge,” which aimed to support exchanges between American and Chinese clean energy entrepreneurs seeking to nurture fresh ideas in the area of energy efficiency. The above points are just a few of the areas where we have opportunities for enhanced bilateral cooperation and collaboration – I know there are many more. But there also are obviously a number of challenges that we need to overcome in the relationship.
Challenges for the U.S.-China Economic Relationship
Today I would like to focus on five specific areas where the United States and China will need to address differences in the future. These points reflect an American perspective on the difficulties China faces as it emerges as an economic power and seeks to become more integrated into the global economy.
Good practices include:
I am hopeful that we will be able to identify mechanisms through which we can encourage cooperation in these important areas.
The Future of U.S.-China Relations
In closing, I would like to say that despite the challenges, I am very optimistic about the future of the U.S.-China economic relationship. I know there are reform-minded individuals in China who will help this country take necessary steps, and there is the “next generation of China Hands” in the United States that will collaborate with our friends in China to move the relationship forward.
And the tremendous thing about being at the Hopkins Nanjing Center is that I know I am speaking to future leaders on both sides of the bilateral relationship. Much of the future of the world in the 21st Century will depend on how well China and the United States sustain growth in our own economies, manage our relationship with one another, and together address challenges facing the global economy. If we can successfully strengthen this evermore complex and important relationship, both countries will be better for it. And we are looking to all of you – our future leaders – to lead the way.
It will not be easy – the challenges are great. But I am confident that, as Deng Xiaoping once said, you will be able to work together to “cross the river by feeling the stones.”
Thanks very much.