Ambassador's Remarks
CNBC
"Ambassador Jon Huntsman"
Interview With Ambassador John Huntsman
Correspondent: Erin Burnett
Producer: Robert Hand
ERIN BURNETT: Well, thanks so much, Ambassador Huntsman. We really appreciate your taking the time. It's wonderful to see you in person.
AMBASSADOR JON HUNTSMAN: Thank you. Happy to squawk.
ERIN BURNETT: All right. So strategic and economic dialogue-- pretty exhausting event-- a lot of people came, biggest ever in terms of the U.S. delegation. A lot of the headlines in the U.S. have said, "Look, we didn't get anything out of it. They didn't move on the currency. We didn't get anything big on Korea." Did we get anything concrete, the United States?
AMBASSADOR JON HUNTSMAN: You always get something concrete when you have a cycle or a round of these discussions. But what's important to understand is the U.S.-China relationship for 31 years, that's the totality of our formal diplomatic relationship, is based on incremental progress. You're never going to change the world overnight. It's step by step. It's an iterative approach.
And so did we get gains in terms of getting the Chinese to commit to procurement standards that are more internationally focused, allowing us greater opportunity as a country to get our goods into the marketplace? Yes. We'll move in that direction. That'll be important.
On the whole question of indigenous innovation-- which goes right to the heart and soul of how China will innovate and create their own domestic industries in the years to come, did we get some pretty clear understanding there about the rules of the road? Yes, that's--
ERIN BURNETT: That's intellectual property--
AMBASSADOR JON HUNTSMAN: Intellectual property component as well. It's procurement standards. Goes right down to local and municipal governments and how they're going to carry out much of this decision making. That's important for American businesses because they're on the ground making decisions, putting dollars behind these decisions.
And if they're blocked and if there is a sense that China is picking winners, which was a huge concern here, it's been a concern for some time. But they're hearing us out. And they're taking our input from the business community, from government representatives. And they're re-fashioning their approach. That's a big deal. So we're not to the end point. But do we have a process that is a whole lot better than where we were a month or two ago? No question about it.
ERIN BURNETT: I have been here for the past few days and, as a reporter, always needing to check back. And that means I've been using private Google. I had no problem accessing Google. Now, I haven't been searching for, say, (inaudible) or anything like that. But I have been using Google.
I haven't been able to get on Twitter. The CEO of Twitter told me last week-- Twitter's banned. But in the U.S. all you hear is there's censorship. Google now can't operate, Twitter can't operate, Facebook can't operate. How big of an issue is that for you?
AMBASSADOR JON HUNTSMAN: You're talking about perception versus reality. It is significant because you-- you can build up-- a head of steam in one particular direction in terms of your perception of China, whether you're in business or whether you're in politics or whether you're just an average voter who cares about the issues in the United States.
And then you come here to China and you find that there's a different reality. And so when I go back to the States, as I was just a couple of weeks ago, making some speeches, meeting with the business community, talking to students-- I say that if you haven't been to China in the last six months, you're dated. A lot of people say, even in Congress, "Well, I made that trip to China about ten years ago. And I was-- it was-- yeah, I was impressed, but they've got some real issues. They've got some things they have to work on."
Well, the trajectory that they're on, I mean, just consider the fact that over the last 20 years in Shanghai they've put up as much commercial real estate as we have in total in New York City. So if you were here ten or 20 years ago, if you took away certain impressions, give us today and the place has been completely transformed. So if you want to understand China, you have to invest some time. You have to stay on top of it. And you have to follow these issues very, very closely because what you may have thought six months, a year, five, ten years ago, may not be the same reality today.
ERIN BURNETT: Is it significant, though-- U.S. technology companies, you know, like a Twitter, like Facebook-- companies that facilitate understanding, open communication-- people's ability to say what they think, to think freely-- are limited here?
AMBASSADOR JON HUNTSMAN: That is an issue and we care about that issue. But you compare where we are today, again, five or ten years ago. You have a country here that has 400 million Internet users. And they're active. You've got 60, 70 million bloggers. You've got people speaking out on the issues.
So let me tell you what I hear today that I never heard before. And I've been engaged in this relationship for 30 years. You go to a senior government official today and, on the important issues, they will say, "We're hearing from our citizens. They're registering their concerns about a particular issue. We need to do something about it." In the old days, it was sort of by fiat.
AMBASSADOR JON HUNTSMAN: Here's what we're doing and, yeah, we don't-- we don't care what anybody else thinks. Here's how we're going to do it. Today it's much different. The people are registering their concerns and their opinions on the big issues of the day. And it's being sort of filtered through the policymaking processes here.
And, therefore, it enters into our deliberations on a bilateral basis. So you've got a very interesting dynamic that is changing the body politic here. So I would say that's a substantial change all by itself, just the additional voices that are speaking out within the Chinese political system.
ERIN BURNETT: The business community has focused significantly in the U.S. over the past well, few months but obviously recently with the strategic and economic dialogue on the Iran situation and sanctions. And the takeaway has been, well, China says it's on board with sanctions on Iran but that excludes energy and financial interests, which people say pretty much excludes everything that matters.
You've got Iran is the third biggest supplier of oil to China. Trade between the two countries rose about nearly 50 percent the beginning part of this year. What are you doing to get China on board with real sanctions that have (UNINTEL) on Iran?
AMBASSADOR JON HUNTSMAN: You look at China diversifying their purchasing portfolio. You look at more purchasing now coming out of the Gulf countries.
ERIN BURNETT: And they are doing that—
AMBASSADOR JON HUNTSMAN: They have—
ERIN BURNETT:--you think? They're shifting away from Iran?
AMBASSADOR JON HUNTSMAN: Talk to Saudi Arabia. Talk to people in Qatar. Talk to people in Oman. Just take a look at those countries who are winning new purchasing contracts and see how that dynamic is changing. Second of all, I heard early on that China would never be part of this effort in the UN Security Council. And then they are part of the effort.
And then it's, "Well, they're never going to be part of certain aspects of the content." And then we get that done and it's, "Well, they're not going to be part of the annex," which is now what we're working on. So the language has been crafted. And, of course, everyone wants to negotiate the language. That's just part of what happens in the UN Security Council.
And now folks are working on the annex, which will probably be done this week. And that specifically references entities, commercial entities, shipping companies, banks. And that's where we're having a bit of a disconnect. We have some distance to travel there. The Russians have been pretty good on that front.
But I think, in the end, you will see the Perm Five plus Germany, together on their approach as it relates to weaponization in Iran. It's a concern-- because it-- it speaks to the issue of regional stability, which is our interest and it's also China's interest as well.
ERIN BURNETT: China-- the Chinese National Petroleum Company, the biggest oil company in this country, though, has said publicly that if this goes through, they can still do business as usual in Iran, which includes working on three new oil fields. Is that true?
AMBASSADOR JON HUNTSMAN: I don't know what their plans are. Our focus is, first and foremost, on the content of the Security Council resolution and to make sure that we are united in our approach to strengthening sanctions in this very important case.
ERIN BURNETT: So you're saying those sanctions could strengthen and it could be progress for the U.S. even if it does not include-- specifically China not allowing-- its companies to deal with--
(OVERTALK)
AMBASSADOR JON HUNTSMAN: Well, let's wait until the annex is done, until all of the language is in. And then I think people can understand what it means in terms of overall trade and commercial engagement. This is a big issue. And this is, again, one where, instead of coming at the U.S.-China relationship from where we disagree, as we typically do because the headlines speak to that on a daily basis, but rather where we agree.
What are our shared equities in this Iran question? And it's all about regional security and predictability and making sure that we don't have a region come unglued that people rely upon for procurement of raw materials.
ERIN BURNETT: So you think they care in a real way whether Iran has nuclear weapons? 'Cause there is a perception out there that, hey, China doesn't care. As long as they get their oil, they get their copper, they could care less who's running a country or what kinds of weapons they have.
AMBASSADOR JON HUNTSMAN: They care increasingly about being a responsible stakeholder in the world. And I think coming at it from a regional stability and security standpoint is something they can relate to. Nobody wants the region that is completely in disarray such that it hurts commercial flows that are so vital to so many countries in the Asia Pacific region.
ERIN BURNETT: Now, one interesting thing about this-- we traveled to Africa. And in Africa, you see China everywhere. In the airport in Tripoli in Libya, the only people other than myself and my cameraman were Chinese. We saw it in the Congo-- everywhere. And it's pretty amazing because you can see what seems to be a great resource race on the ground.
And when you think about it, China's the biggest consumer of almost every commodity out there except for oil, and they will eventually leapfrog America in that as well. How is there a way to see this as anything other than resources are finite, there's two great powers that want them and it ends up as an Us versus Them?
AMBASSADOR JON HUNTSMAN: There is an element of competitive competition in our relationship. I think everybody recognizes that. What is important is they venture out because their economy is strengthening. And it's only inevitable that if your primary focus is strong economic performance-- because that results in political stability, then you've got to make sure that you've got lines secure for raw materials.
So not surprisingly, as their economy gets larger and larger, you see them venturing into sub-Saharan Africa, Latin America, and other places. That's why, during the last strategic and economic dialogue just a couple days ago, we made development a very important theme that we talk about. We've never talked about development before.
ERIN BURNETT: And that means them investing in-- in more than just getting the resources out of the countries they're going into?
AMBASSADOR JON HUNTSMAN: Exactly. As you invest in a country, are you focused on good government? Are you focused on peaceful infrastructure? Are you focused on the kind of development that is going to leave-- a positive legacy for the next generation as opposed to just going in and taking out raw materials?
This is what we're interested in. We've always tried to promote, in the case of sub-Saharan Africa, we've had the African Growth and Opportunity Act. We've given certain trade preferences to Africa over the years. We've tried to build capacity and promote good government.
I think, you know, we've done a reasonably good job there. Now, China comes in with less of a message. We always have a message wherever we go. Some people don't like that. They come in with a checkbook. And we say, you know--
ERIN BURNETT: They don't have a moral component--
AMBASSADOR JON HUNTSMAN: --in addition to the checkbook--
ERIN BURNETT: --that we have.
AMBASSADOR JON HUNTSMAN: --yeah. In addition to the checkbook, let's make sure that the work that is happening on the ground carries certain messages as well that will result in a stronger region.
ERIN BURNETT: Do you have frustration and has this come up with them that, when you look at the military budgets in the U.S. and China, we're spending, what, nearly $700 billion a year. Pentagon says their real numbers are more like 150, which is-- which is higher than they would admit.
But-- a lot of that money that we are spending is going into Iraq and Afghanistan. We're providing security. And Afghanistan is a good example. China is the one that got the rights to a giant copper mine near Kabul we're providing security for. Has that come up? Is that frustrating to the American government that America's paying-- to-- the security for China to get the resources?
AMBASSADOR JON HUNTSMAN: Well, we have commercial opportunities that American firms can pursue as well. China looks at their periphery and they see that, you know, you're more than a dozen countries on the periphery, some of whom are at war, some of whom are having some domestic stability problems. And they're making strategic investments.
They want a neighborhood that is stable. And so what is important for the United States is that, aside from looking for commercial opportunities, which we need to do just to build capacity in places like Afghanistan and Pakistan, is that we work jointly with China on programs like rural health, on education, on ways that bring up people-- so that the next generation is more apt to want to live and exist in a stable political environment as opposed to what you find today.
So we're engaging China on issues around capacity building, for example, in Afghanistan. So you have a copper mine. What do you have around the copper mine? What are you doing in terms of educating people? What are you doing in terms of providing healthcare? What are you doing in terms of providing--
ERIN BURNETT: --are happening?
AMBASSADOR JON HUNTSMAN: Absolutely. You need roads. You need rail. You need infrastructure--
ERIN BURNETT: Right.
AMBASSADOR JON HUNTSMAN: --to get products in and out, which is good for us, too, by the way.
ERIN BURNETT: Right. Well, okay. You-- you mentioned the periphery-- around China. And I'm wondering if it's appropriate at this point to use the word-- "China bloc." I mean, they do have the second biggest military expenditures after the U.S., although dwarfed by ours, I think it's just fair to point out.
China cares passionately about Taiwan. They obviously-- consider it to be part of Greater China. But-- I'm curious what you think about that. I mean, is China harboring ambitions to get bigger, whether it be Taiwan or Mongolia or-- or-- or Vietnam or Thailand?
AMBASSADOR JON HUNTSMAN: I think, just to be fair, I mean, you go back to the end of the Qing Dynasty in 1911 and the establishment of the Republic-- of China. And you look at the maps from that period, and they include Inner Mongolia. They include Xizang (PH). They include Tibet. They include Taiwan-- of course Macau and Hong Kong as well and the Spratly Islands, which-- is an issue of some-- contention.
And so when you say what are they endeavoring (NOISE) to do from a sovereignty standpoint, it's bringing home all of the lost territories that sort of escaped during the last century, whether it was through occupation or-- or through war. And Taiwan is a major issue (UNINTEL). But you look what is-- you look at what has happened over the last 30 years with the China-Taiwan-- relationship, it has gone from where-- I remember this because I lived in Taiwan twice during those very early bitter days when Taiwan was under martial law.
And it-- they were on the verge of war. And today they are signing a free trade agreement. Today you've got 160 direct flights not through another country but direct flights that go back and forth. I was just down in Tainan (PH) in Fu Jen (PH) and looking at the boat traffic-- the commercial boat traffic going back and forth. So whatever has been done over the last few years, whether it's selling arms to Taiwan, whether it's--
ERIN BURNETT: Which was a big issue for you this year.
AMBASSADOR JON HUNTSMAN: Which is a big issue, yeah. That's--
ERIN BURNETT: America sold them and China was--
AMBASSADOR JON HUNTSMAN: They're upset.
ERIN BURNETT: --upset. So--
AMBASSADOR JON HUNTSMAN: --nothing new. We've been through this before.
ERIN BURNETT: Right.
AMBASSADOR JON HUNTSMAN: We have the cycles of life, the cycles of the Oceania relationship. And what is important is looking at the bottom line as if you're in business. What has all of this resulted in? Has it resulted in instability in the region? Has it resulted in greater hostilities? No. It's resulted in a region that now believes in trade and investment and a freer will of people back and forth.
ERIN BURNETT: So you don't think that there's a problem? You don't think that they're going to-- well, once they do that and get back the territories that they think are theirs, whether they get them or not, they get them back, then they look and say, "Well, now what? We've got the biggest army in the world. We've got the economic power and increasing political power. Why shouldn't we be the military superpower?"
AMBASSADOR JON HUNTSMAN: Two things on Taiwan. Just, you know, look at that all by itself. That I think is a success story given where it is today versus where it was 30 years ago. On the military issue generally, the lack of transparency and the lack of dialogue and interaction is a huge problem for the United States. And we need more interaction. We need interaction at the junior officer level.
And we need interaction at the senior officer level. And we're getting very little of it right now. And when you have no dialogue, when you have no interaction, you have cultures that sort of build up on both sides. And they're built up based upon suspicion and-- and lack-- lack of trust. And all of that is a natural outgrowth of very limited interaction. So we are pushing, as we did during the strategic and economic dialogue--
ERIN BURNETT: I know the--
AMBASSADOR JON HUNTSMAN: --for greater--
ERIN BURNETT: --Pacific commander was here.
AMBASSADOR JON HUNTSMAN: He was. And I think thought that was a pretty good-- pretty good sign, Admiral Willard (PH). So--
ERIN BURNETT: Progress on Korea?
AMBASSADOR JON HUNTSMAN: Well, let me back on the military. Part of what we want out of that is transparency. We want to know where the expenditures are going. You're going to spend, you know, a certain amount. Where's it going? And how is it likely to impact the region and the world?
ERIN BURNETT: Right.
AMBASSADOR JON HUNTSMAN: We're pretty open about our stuff. And we want China to be open in a similar way. So we're going to keep pushing for that.
ERIN BURNETT: And are they going to get on board with a Security Council resolution-- on North Korea?
AMBASSADOR JON HUNTSMAN: They know how important it is. (LAUGHTER) We share a common goal, which is-- de-nuclearization of the Korean peninsula. We share-- again, it's one of these things where you have to look at your common shared interests as opposed to what divides you. We both want that at the end of the day. We're coming at it from different points of view. We're coming at it--
ERIN BURNETT: --supporter of the North Korean regime, at least financially.
AMBASSADOR JON HUNTSMAN: Yeah. And we (UNINTEL) raise an alliance for us. So you come at it from different points of view. I think we're closing the gap on this. And it's about consoling a dialogue. It's about presenting the facts as we know it. It's about listening carefully to what President Li in South Korea has said.
I think he's taken a very measured and studied approach and wants to take it to the UN Security Council. We support that. And we'll see what China chooses to do. But believe me, over the last couple of days, we-- we had some-- some very rigorous and detailed discussions about this particular issue.
ERIN BURNETT: One final question. Your daughter Gracie, Chinese-- adopted.
AMBASSADOR JON HUNTSMAN: Right.
ERIN BURNETT: She's on a postage stamp? (LAUGHTER) So I can go buy Gracie?
AMBASSADOR JON HUNTSMAN: (LAUGHTER) You-- you can buy Gracie. She's from the city of Yanxio (PH), which is down by the Yangtze River. And she is a hometown hero. I can tell you that because I've traveled with Gracie to Yanxio. And the mayor came out and half the town of five million people came out to greet her when she was there. And it was the most emotional journey I've ever taken. And as a gift to her, they basically-- put her on a postage stamp. I'm not sure she quite understands the significance of that yet. But over time she probably will.
ERIN BURNETT: (LAUGHTER) I hope you have one in her scrapbook. All right, well, thanks so much, Ambassador Huntsman. We appreciate it.
AMBASSADOR JON HUNTSMAN: Take care. It was a pleasure.
(OFF-MIC CONVERSATION)
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