As Prepared for Delivery
Thank you. I’m pleased to be at the Tufts University Fletcher School here for the China-U.S. symposium. Many distinguished diplomats have come from Tufts, and I’m confident today’s students will continue that tradition.
I encourage everyone looking for a job to consider the Department of State – there’s no recruiting bounty, but it provides an extraordinary career, and the unique satisfaction of public service.
As the Assistant Secretary of State for East Asia and the Pacific, I cover every country in the Asia-Pacific region, west to east from Burma to Kiribati; and north to south from Mongolia to New Zealand.
In between, of course, is China – an immensely important country. And it is undergoing a transformation with huge impacts on the Asia-Pacific region, and on U.S. interests. I like your conference theme of “engagement” with China because engagement is a key element of U.S. foreign policy.
This year, we mark the 35th anniversary of official diplomatic relations with the People’s Republic of China.
This year also marks the 35th anniversary of our unofficial relations with Taiwan under the Taiwan Relations Act. One of the significant, positive trends over the past five years has been progress in cross-strait relations.
Today, I will briefly review where we are in our relations with China, and then lay out where I think we’re headed.
The U.S. economy is moving forward after the 2008 recession, China has grown to be the world’s second-largest economy, and we share a half-trillion dollars in annual bilateral trade—our third-largest trading relationship. In other words, our economic destinies are becoming increasingly intertwined.
In 2013, the U.S. welcomed more than 1.8 million Chinese visitors and over 235,000 Chinese students. At the same time, more Americans are visiting China and learning Mandarin. Last year, more than 2 million Americans visited China. Currently, more than 51,000 Americans study Mandarin in the U.S., and more Americans study abroad in China than in Germany or Australia. We’re currently on track to reach President Obama’s goal of increasing the number of Americans studying in China to a total of 100,000 over four years.
One widely-cited estimate says that basketball is now as popular as ping pong, and millions of Chinese follow the NBA and CBA (Chinese Basketball Association). And when Xi Jinping visited Los Angeles in 2012 as a guest of Vice President Biden, he made a priority of seeing the Lakers.
The U.S. and China work cooperatively on issues ranging from regional security, to climate change and other environmental concerns.
But there are important challenges in the relationship, and we are candid about them with the Chinese. Frankly, candor is a mark of respect.
We have economic concerns, centered on market access restrictions, opaque regulations, discriminatory treatment, and poor enforcement of intellectual property rights. This includes government-sponsored, cyber-enabled theft of trade secrets and other commercial information, and other actions that distort free and fair global competition.
We have values-related concerns. China rejects what we consider to be certain universal human rights and fundamental freedoms. Human rights advocates and prisoners of conscience are incarcerated, sometimes for decades. Citizens are prevented from speaking or assembling freely. China blocks international media websites and foreign social media. It has engaged in security crackdowns in Xinjiang that alienate the Uighur population, and repression in Tibet that has similar results.
We will continue to speak out on these issues, as we have done, both in public and during our bilateral dialogues as we advocate for universal values and represent our nation’s interests. And we will continue to show our support for those values even when China objects – as it has when President Obama and his predecessors have met with the Dalai Lama in his capacity as a respected religious leader.
We have security concerns, centered on ambiguous maritime claims in the South China Sea that China is asserting through problematic maritime behavior, economic retaliation, and other coercive tactics against neighbors such as the Philippines. And while we take no position on territorial claims in the South China or East China Seas, we do take a strong position on the manner in which those disputes are resolved. We consistently call on all parties, including China, to peacefully manage and resolve disputes in accordance with international law.
But building on our areas of cooperation with China, even as we address our concerns, is essential. No bilateral relationship in the 21st century is likely to matter more. So we engage with China actively across a spectrum of global, regional, and bilateral issues.
Our approach to China can only be understood in the context of the rebalance, which is our broader policy toward the region.
It’s built on a simple idea: the Asia-Pacific is hugely consequential to the U.S. The region constitutes over half the world’s people and economic output, and the numbers are growing. As a resident Pacific power and a trading nation, the United States depends on a stable, prosperous Asia. The Asia-Pacific Region matters for U.S. jobs and U.S. security. So we are working hard to build stronger and closer relationships with the countries in the region, strengthen regional institutions, and uphold the international rules-based system and its key tenets.
With those goals in mind, policymakers looked at how the U.S. government’s resources were distributed – diplomatic and development personnel and funds, military assets, and the time and attention of senior leaders – and we realized that the distribution of our resources didn’t match the growing importance of the region and our goals there. The distribution was out of balance. So over the last five-plus years, we have worked to rebalance – this means strengthening our alliances, building up regional institutions, and engaging with emerging powers, such as China. Let me give you a few details on each of these three areas.
We have strengthened and reinvigorated relations with our five treaty allies in the region –Australia, Japan, the Republic of Korea, the Philippines and Thailand.
We have upgraded our economic and trade engagement, such as ratifying the Korea-U.S. free trade agreement and negotiating the Trans-Pacific Partnership, or TPP, which includes Australia and, more recently, Japan.
We have increased diplomatic and people-to-people ties – I was just in Thailand to show our strong support for the Thai people and their democracy as they work through their current political crisis.
And we have strengthened security cooperation with our allies, from our work with Japan and the ROK to counter the North Korean nuclear threat, to the new defense cooperation agreement we’re negotiating with the Philippines, to our rotational deployment of Marines to Australia. The strength of our alliances will be highlighted by President Obama’s visits to three of them – Japan, the ROK, and the Philippines, next week.
Secondly, we are helping to build up the region’s security and economic institutions – we were the first non-ASEAN member to have a dedicated mission to ASEAN, and President Obama participates annually in the East Asia Summit. As I mentioned, we are negotiating the TPP. This is an ambitious, comprehensive, and high standard agreement that will promote growth and create jobs both at home and in the region, and includes nearly 40 percent of global GDP. These regional institutions and agreements have value even beyond the direct benefits they provide because they set values and norms – they help fill a space between the laws and interests of each state, and international law and norms writ large.
Strong institutions not only foster mutual understanding, they develop habits of cooperation. They can give rise to a collaborative way of doing things – whether it’s a code of conduct for claimants in the South China Sea, managing shared resources like fisheries, or addressing pollution that crosses borders – that is based on dialogue and diplomacy. Our support of regional institutions will be highlighted by the President’s participation in APEC in China, and the East Asia Summit in the fall.
We also have initiatives that bring neighbors in the region closer both to us and to each other, such as the Lower Mekong Initiative. This initiative helps Burma, Cambodia, Laos, Thailand and Vietnam jointly manage a river that is crucial to the prosperity, health and food security of all their citizens.
The third pillar of the rebalance that I mentioned is engaging with emerging powers. By this we have traditionally meant our engagement with countries like Indonesia (with whom we have developed a comprehensive partnership and a hold annual joint commission meetings on a range of issues), India (with whom I hold very productive East Asia Consultations as well as trilateral meetings on the Asia-Pacific with Japan) and of course, China. But a broader definition of emerging powers could include countries like Vietnam, Malaysia, and, hopefully someday, Burma, where I just traveled last week to support their remarkable ongoing transition to democracy and an open economy.
These three pillars support and reinforce each other.
Strengthening our alliances provides a foundation of security for the region, giving countries the confidence and the space to move forward on their collective interests and strengthen regional institutions.
Building up those institutions, in turn, helps the region develop the rules of the road that I mentioned.
And those rules – developed by and for the nations of the Asia-Pacific – provide the foundation for trade, prosperity, and for solving problems. Just as each country develops laws and norms that improve its society and advance its prosperity, the region will benefit from doing the same.
Our engagement with emerging powers makes clear that the U.S. seeks partnerships and collaboration. It shows that we are committed to building positive-sum relationships, as opposed to zero sum. And it shows that we are prepared to support the peaceful rise of countries like China.
So how have we pursued the rebalance with China? By expanding engagement at authoritative levels. President Obama has met with his Chinese counterparts some 18 times, and Secretary Kerry and other cabinet members meet with their counterparts on a regular basis. Secretary Hagel was just in China two weeks ago, where he and his team met with their Chinese counterparts. And he and his counterpart, Defense Minister Chang, made clear that, to quote Minister Chang, “The common interests of China and the U.S. in the Asia-Pacific outweigh their differences.”
That’s why our high-level Strategic and Economic Dialogue, chaired jointly by Secretaries Kerry and Lew and their Chinese counterparts, features annual meetings and regular “check-ins” throughout the year. In addition to providing direction and a sense of urgency to the daily interactions we have at the staff level, these meetings allow the leaders to discuss cross-cutting issues and break out of the stovepipes that can occur at lower levels. Our intensive engagement creates a rhythm of sustained momentum that is yielding concrete results. And you’ll see more results when our two teams meet this summer in Beijing for the Sixth Strategic and Economic Dialogue.
We cooperate on security:
Direct engagement between the U.S. and Chinese militaries helps us manage differences on sensitive issues and avoid miscalculations, and provides a foundation for us to work together on common interests, such as the fight against piracy near Somalia.
We’ve worked to increase coordination on North Korea. We share the goal of peaceful denuclearization of the Korean Peninsula.
We’re working together in the international effort to eliminate Syria’s chemical weapons and Iran’s nuclear program.
Our economies are increasingly intertwined, with investment flowing both ways:
In the last decade-and-a-half, cumulative Chinese investment in the U.S. has gone from near zero to $36 billion. Our Embassy in China has done a lot to facilitate that investment.
And we agreed last year to pursue a “high-standard” bilateral investment treaty – one that can level the playing field for U.S. firms operating in China and create jobs here at home.
We cooperate on protecting the environment:
Last year, Secretary Kerry and State Councilor Yang Jiechi created a High Level Working Group on Climate Change that has made significant progress.
But I believe we must do much more to expand cooperation in the years to come.
We share a strategic interest in a denuclearized Korean Peninsula. The logic of our shared interest should compel greater coordination and cooperation.
We share an interest in upholding the rules-based international system under which China has achieved historic levels of economic development. The United States has advocated for and embraced China’s inclusion in multilateral fora like the World Trade Organization, the G-20, and APEC, which China chairs this year. These groups advance the prosperity of China, and of all their members. This international system is based on the rule of law, settling disputes peacefully, and cooperation to achieve goals that individual members cannot achieve alone. China benefits from these principles; it needs to practice them.
One example is maritime security. Freedom of navigation is essential for regional and global commerce, and China’s exports. Maritime and territorial claims should be made in ways that are consistent with international law, including Law of the Sea Convention. Those rules protect everyone – big and small.
Clean air and water is a high priority for China. China can move factories and power plants away from urban areas and reduce some of the most immediate and obvious impacts of pollution. But only an integrated strategy to move away from coal-fired power plants and dirty manufacturing techniques will address climate change and other long-term environmental threats.
Free access to information, free speech, and the rule of law have been proven ingredients for unlocking human potential in societies across the world. As China works to move up the value chain into innovative industries and the global creative economy, its incentive to reform will increase. We’re already beginning to see this with intellectual property. We’re already seeing a dramatic rise in IP rights lawsuits within China, where one Chinese firm will sue another for IP rights infringement. So strengthening the rule of law will become increasingly important for the Chinese over time.
These are all reasons why I believe China should work cooperatively in the international system, accepting its constraints to gain its far greater benefits. The U.S. accepts its constraints – we lose some trade cases in the WTO, and some votes at the U.N., but we accept that, because the benefits far outweigh the costs. This international system isn’t perfect, but it is continually being improved, and it has supported the greatest era of peace, stability, and prosperity in human history. And it provides the context for a “new model” of relations between the U.S. and China to emerge. A model where we compete, yes – in business, in the marketplace of ideas, in ping pong and basketball. But where, as in sports, we compete within rules that we agree on and respect.
A strategic rivalry between a rising power and an enduring power is not pre-ordained. Through wise leadership and committed effort, we can forge a better path. We can cooperate on important, tough issues that benefit both our peoples. We can speak candidly and work through our differences, not just ‘agree to disagree.’ The “new model” is a work in progress. It’s not something with an obvious precedent, and it won’t emerge fully formed from one summit or the next. But both President Obama and President Xi are committed to work together – to engage.
We will always need to protect our interests where they diverge. We have, and will continue to have, real differences. The question is how we deal with them. The test of our engagement, of our diplomacy is whether we are able to expand practical areas of cooperation on regional and global issues and at the same time manage these differences candidly and constructively.
I’m excited for your symposium, and I hope I’ve given you some perspective on the U.S. Government’s engagement with China and the Asia-Pacific region. I’m happy to answer any questions.