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Diplomacy in Action

Remarks at the Strategic and Economic Dialogue U.S. Press Conference


Remarks
Hillary Rodham Clinton
   Secretary of State
Victoria Nuland
   Department Spokesperson, Office of the Spokesperson
Secretary of the Treasury Timothy Geithner
JW Marriott
Beijing, China
May 4, 2012

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MS. NULAND: Thank you all for joining us this evening. As you know, the two Secretaries made statements a little bit earlier with their Chinese counterparts. So we’ll have four questions this evening – two from each side. And our first question goes to AP, Matt Lee, please.

QUESTION: Thank you. Okay. Madam Secretary, it won’t surprise you, I think, to get the questions that you’re about to get from me, which all have to do with the elephant in the room that’s been dogging us --

SECRETARY CLINTON: The elephant that has been dogging us. That’s good – a good start, Matt. (Laughter.)

QUESTION: Dogging us for the last week. So here it goes: What are the current status of the negotiations with the Chinese over the fate of Mr. Chen? How did the Chinese officials that you spoke to, the senior leadership, respond to your appeals on his behalf? Are you confident that they will allow him to leave the country to go to the States with his family so that he can study? And how do you respond to critics at home and elsewhere who say that the Administration has really bungled this? Thank you.

SECRETARY CLINTON: Well first, let me start by saying that from the beginning, all of our efforts with Mr. Chen have been guided by his choices and our values. And I’m pleased that today our ambassador has spoken with him again, our Embassy staff and our doctor had a chance to meet with him, and he confirms that he and his family now want to go to the United States so he can pursue his studies.

In that regard, we are also encouraged by the official statement issued today by the Chinese Government confirming that he can apply to travel abroad for this purpose. Over the course of the day, progress has been made to help him have the future that he wants, and we will be staying in touch with him as this process moves forward.

But let me also add, this is not just about well-known activists. It’s about the human rights and aspirations of more than a billion people here in China and billions more around the world. And it’s about the future of this great nation and all nations. We will continue engaging with the Chinese Government at the highest levels in putting these concerns at the heart of our diplomacy.

So I think we have been very clear and very committed to honoring both his choices and our values.

MS. NULAND: Next question goes to Lu Quoi (inaudible) from Xinhua, please.

QUESTION: (Via interpreter) This is a question from Xinhua News Agency. What do you think that China and the U.S. will do to build a new relationship between big countries, as China proposed? Some scholars hold that the U.S. want to contend China as it shifts its strategic focus eastward in the high profile. What do you think of such a statement?

SECRETARY CLINTON: Sir, do you want me to start?

Well, I think that, as President Obama and I have said many times, and as we repeated again over the last two days, the United States welcomes a strong, prosperous, and successful China. We want to see China not only deliver economic prosperity for its large population, but also play a key role in world affairs. And our countries and our peoples gain far more from cooperation then from competition, so we are committed to pursuing a positive, cooperative, comprehensive relationship.

And I want to underscore the importance of events like this 4th Annual Strategic and Economic Dialogue. We use it to maximize mutual understanding and areas of cooperation while also speaking frankly to one another about those areas about which we have disagreements. Now, given all that we are doing together bilaterally, regionally, and globally, we need this kind of open, regular mechanism for strengthening our partnership and managing those areas where there are tensions and differences.


I said something earlier today that I would repeat for you, because together the United States and China are trying to do something that is historically unprecedented, to write a new answer to the age-old question of what happens when an established power and a rising power meet. And for the United States, we see this as an opportunity, not a threat. We look at the future with great optimism. And we believe that neither of us can afford to keep looking at the world through old lenses, whether it’s the legacy of imperialism, the Cold War, or balance-of-power politics. Zero sum thinking will lead to negative sum results.

And so instead, what we are trying to do is to build a resilient relationship that allows both of our nations to thrive without unhealthy competition, rivalry, or conflict while meeting our national, regional, and global responsibilities.

SECRETARY GEITHNER: Perhaps I could just add two examples of the commitment that the Secretary laid out on the economic and financial side. As many of you know, we’ve been very supportive of trying to make sure that China not only has a seat at the table in the most important for a globally for discussing international, economic and financial issues, but we’ve been very supportive of expanding China’s role, its relative influence, in those major institutions. And it underscores our recognition that our interests are completely consistent with a rising, growing, stronger kind of China economically and financially.

MS. NULAND: Next question, Ian Katz from Bloomberg, please.

QUESTION: Thank you. For Secretary Geithner, do you think the yuan needs to strengthen as much as you thought it did two years ago, or a year ago? And at what point – and do you know at one point it is strengthened enough?

And also – and if I could, I wanted also to follow up a question to Madam Secretary. Do you believe that the Chinese are – the Chinese government is serious about wanting to find a resolution to the Chen situation?

SECRETARY GEITHNER: On the exchange rate, let me just describe the full scope of what’s happened on that front over the last three years or so. China’s yuan has allowed the exchange rate to appreciate against the dollar by about 13 percent in real terms over the last 20, 22 months or so, more than 40 percent in real terms over the last five years or so. That’s very consequential.

They acted just recently to widen the ban to allow the exchange rate to move in response to market forces. They’ve significantly reduced the amount of intervention in the exchange markets. Their external surplus, their trading current account imbalances have come down very substantially. And they have continued to move progressively to relax the controls on capital movements and encourage greater convertibility, greater international use of the yuan. So if – you want to look at the full scope of those changes to see the extent and the consequence of the Chinese commitment to reform in that context.

Now, it is our view – and it’s the view of the IMF, looking at the broad measures we have available – that the exchange rate is likely to and needs to continue to appreciate further against the dollar and the major currencies. And that’s based on the basic judgment about the fundamentals that drive exchange rates, including what’s likely to be a long period of relatively rapid productivity growth in China.

SECRETARY CLINTON: As I said, we are encouraged by the progress we’ve seen today, but there is more to work to do, so we will stay engaged as this moves forward.

MS. NULAND: And our last question this evening is from Han Wei at HuaSheng.

QUESTION: (Via interpreter) This is a question from HuaSheng Media. As we all know, many new challenges arise between China and the United States while some historical and structural issues still exist and sometimes emerge at the end. What do you think the two sides can do to avoid derailing the world’s most important bilateral relationship?

SECRETARY GEITHNER: Well, as we both said over the last couple of days, you have to start by trying to make sure that we understand as much as we can the broad interests and the intentions of our two nations. And we’ve made a substantial investment in doing that. You have to be open and direct where we disagree. We have to be as clear as possible as we can where our interests are in conflict. And we try to bring that basic spirit and approach to these discussions from the beginning, and I think that’s the only way to do it.

SECRETARY CLINTON: I have to add that this has been a very productive fourth session of the Strategic and Economic Dialogue. It is a testament to how far we’ve come in building a strong and resilient relationship and being able to have very candid, open discussions about issues where there is disagreement without it endangering the entire range of significant matters that we are working on together.

Having participated in all four of the Strategic and Economic Dialogues, I have seen how far we’ve come over the last four meetings and all of the meetings in between. There is no shortcut to spending time listening, exchanging views, looking for ways to build strategic trust and understanding. And it is a long-term proposition. The United States and China have the most consequential relationship of the 21st century. So it is not only the current leadership of our two countries, but leadership for many years to come who have to remain engaged and to use this platform to pursue the kind of mutual respect and mutual benefits that are important to the bilateral relationship but also very important for the global relationships as well.

So having had the privilege along with Secretary Geithner of leading the American side for four dialogues now, I believe that we are building a foundation for future cooperation that will benefit both our nations and the world.

MS. NULAND: Thank you very much, all of you, for joining us.



PRN: 2012/T63-07



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