Ambassador's Speeches and Articles
U.S. Ambassador Jon Huntsman
Remarks at FutureChina Conference
July 12, 2010
Singapore
Delighted to be here today for the inaugural FutureChina Business Forum.
I’d like to thank:
-Business China CEO Josephine Teo and her staff
-Foreign Minister George Yeo and Lee Kuan Yew
-Ambassador David Adelman, our Ambassador to Singapore
I appreciate his gracious hospitality during my visit, and I’d encourage you all to make use of his experience and insights.
About one year ago I was minding my own business… President Obama discussion. Relationship has gone global…
I’m very pleased to be here today to share with you my view of the U.S. relationship with China and our bilateral agenda. But I want to offer up my remarks in a less traditional fashion. Give you some reflections on my past eleven months in China and what I've learned - much of which won't come as any great surprise to an audience like this.
To start I want to throw out a word that is the foundation and the fuel of any good relationship: trust. Trust is the fuel that powers the U.S.-China relationship. During the past 30 years of the modern U.S.-China diplomatic relationship, we've accumulated a fair amount of trust, much of it simply by virtue of our willingness to listen to one another and to act in concert on important issues. We recognize that there will be disagreements, inevitably. But our relationship is now mature enough to speak honestly and frankly about our differences. That’s a sign of an increasingly healthy relationship.
So, discounted by my being in place less than a year, let me provide a few observations on where we are now.
#1) There is less ‘drama’ in the U.S.-China relationship than you might think, despite occasional alarmist headlines.
As I sit in my office and look around, I have a computer, a desk, some pictures of me with Chinese leaders, maybe a few snacks I’m not allowed to eat at home… but no panic or restart button.
The overall relationship is strong, stable, and resilient. But it does go in cycles, and has had its ups and downs ever since the modern People’s Republic of China was established 61 years ago.
We’ve been on different ideological ends of regional conflicts in Korea and Vietnam, yet today find ourselves working closely on issues of regional peace and stability.
We’ve wrestled over serious market-access, intellectual property and trade issues, yet worked together on China’s historic accession to the WTO.
We’ve gone the rounds on human rights, political freedom and rule of law – not always seeing eye to eye. Yet the first American Bar Association (ABA)-approved law school program outside the United States is about to open in Shenzhen—the Peking University School of Transnational Law.
Through it all we have managed to survive. Earlier this year was no different. Internet freedom, Taiwan and Tibet all seemed to converge at once. But after a couple of momentary low points, we are regaining our lost altitude.
#2) There are areas of difference, but many more of convergence. What unites us is more important than what divides us.
Our successes increasingly will be tied to identifying our shared interests and working toward practical solutions. (Huxiang bangmang, huxiang xuexi… )
Contrary to what some Americans might think: China is not only Beijing or Shanghai, or the glittering Olympics or Expo. Neither is it the military grandiosity of the National Day parade or the pronouncements of the Party. Similarly, America is not New York or Washington or Hollywood. We may have different languages and traditions, but we are both people with dreams and aspirations and a common shared humanity.
We even enjoy some of the same humor, television shows and cinema: We love a story that will move us or inspire us to be better than we are now. We are pragmatic, logical and hard-working. And above all, we love and invest in our children, and we want to leave a better world for them. We can build trust based on those commonalities, even as we deal with the differences that grow out of the particular circumstances of our geography and history, our cultures and traditions.
Some of our approaches will be bilateral, others regional, still others global - but we have to engage on the basis of trust. I tried to do this as governor of Utah, working with Chinese delegations. Now I do it on a different scale as Ambassador.
#3) We are not seeking to impose our worldviews on one another. Our differences add richness and texture to the relationship.
Even with our different notions of governance and culture, I can say categorically that we do not seek to remake one another - we can't remake one another. Nor would we ever want that. Again, this is where mutual respect and mutual trust are so important. We seek to understand, to continue dialogue, and to improve the future prospects of our respective people.
But some things are ingrained and have deep roots: for example, whether China likes it or not, human rights are a central part of America's worldview. Whether Republican, Democrat, Independent, Libertarian, or Vegetarian—a desire to protect access to information, freedom of speech, freedom of the press, and freedom from persecution is in America's very being. As Thomas Jefferson said: "The policy of the American government is to leave their citizens free, neither restraining nor aiding them in their pursuits."
The most powerful force for change is not easily stopped. It’s called the information technology revolution.
I look to the Internet to bring a greater degree of openness and transparency. Any government that disregards the views of its citizens does so at its own peril. The central government and some of the more progressive provinces are now using the Internet to invite input from the public (Chinese and foreigners alike) on new drafts of certain laws and regulations. Chinese citizens are weighing in, getting accustomed to participating directly in the legislative and regulatory process.
China does have a controlled press, though there is often leeway in how a story is portrayed. It also has the largest and some could argue the most sophisticated Internet citizenry in the world – I recently had a journalist from a state-run paper explain to me how to jump the Great Firewall! Although my daughters seem to be the experts!!
Just like the United States, China is a country of remarkable diversity. One of the poorest countries in the world per capita is the biggest market for Rolls Royces. China’s modern cities are impressive, but many places still have the look of a developing country. When I took the multi-billion dollar high-speed rail from Beijing to Tianjin, I looked out the window and saw workers hoeing and farming by hand. Contradictions like this abound, and are part of the complexity - but also add to the richness - of the relationship:
#4) While hot button political issues often grab the spotlight, our foundation is largely commerce and trade.
Trade has provided a foundation for the relationship to build upon. Many of the earliest deals that have been brokered were based on trust.
Bilateral trade is now $400 billion per year, which has grown from just a billion or so in less than 30 years. A stark contrast to when President George H.W. Bush headed our liaison office in Beijing in the 1970s. He lamented that when he was our liaison trade had just dropped from $1 billion to $500 million. Henry Kissinger said at the Embassy during his last visit that the pace of growth in trade was far greater than they ever could have imagined when he and Nixon made the first trip here to initiate the start of our modern diplomatic relationship.
The economists I talk to tell me America will remain the premier international economy well into the second half of this century. But China is catching up. Our three percent growth on 15 trillion dollars in the U.S. roughly equates to China's nine percent growth on a five- trillion-dollar economy, though - in per capita terms - the additional value added each year is still about four times greater in the U.S. than in China.
One sensitive area is the imbalance in the trade relationship: we are beginning to correct this. In the first quarter of 2010, U.S. exports to China rose almost 50 percent from the year before, while U.S. exports to the rest of the world rose at less than half that rate. During this period we have seen double-digit growth in a variety of export sectors, ranging from high-end manufactured goods and chemical products to agricultural goods like soybeans. Since 2000, China has moved from being the 11th largest market for U.S. exports to being the third largest. And in the future, I believe China will be investing more than the $1.2 billion it has in non-financial instruments in the U.S., which signals a special kind of trust in our markets.
We welcome China's decision to increase the flexibility of its exchange rate. Vigorous implementation would make a positive contribution to strong and balanced global growth. We look forward to continuing our work with China to strengthen the recovery. This is an important step, but the test will be how far and how fast the Chinese let the currency appreciate.
When we review our sometimes fractious trade relations with China, I think there is a tendency to try to find a sort of silver bullet or rip cord – the one string you can pull that will unravel the whole problem. But it just doesn’t work that way – in fact, our relationship is more like a Gordian Knot, with layers upon layers of tangled, interdependent complexity.
There are a lot of specific issues that cause friction, but in my view it’s possible to identify a few underlying causes – the biggest, most central “knots.”
First, and most basic, are China and the United States’ relative macroeconomic environments.
China has a range of policies the have encouraged excessive resource-intensive production and discouraged consumption. You can point to fiscal, financial, pricing, and foreign exchange approaches, among other things.
The US system, on the other hand, encourages government and household consumption, at the expense of savings.
The result, in short, is that the average China person spends too little of their income, and we Americans spend too much – leading inevitably to a bilateral trade deficit and, in tough economic times, trade friction.
The second irritant: China and the United States look very differently at government’s role in the economy. China supports state-led economic development, including supporting national champions. We view state-owned enterprises and products from non-market economies less favorably.
This creates tensions as U.S. firms operating in China feel the cards are stacked against them, while Chinese exporters at times feel our trade and legal system is biased against them in the US.
A third important aggravation is one that I truly feel we are working together to overcome: weaknesses in China’s enforcement of its economic rules and laws. The facts speak for themselves: although China may have perfectly good laws on the books, in reality enforcement of intellectual property rights, labor rules, environmental protections, and food and product safety standards still leaves room for improvement.
It makes it hard for any outsiders – and by this I mean not just foreign companies, but also private Chinese start ups – to succeed; and makes it hard for our regulators to trust Chinese products, sometimes blocking access for goods that are legitimate and safe.
Finally, maybe the toughest knot to untangle: differences in our forms of governance. China, at this point in time, needs to make progress in accountability, in transparency, in basic rule of law.
There are commercial reasons – companies, especially the most innovative companies, need predictability and security to flourish. This difference in forms of governance also affects the overall climate in which our relationship operates – mood matters, and you just can’t wall off economic interactions from the overall relationship. On our side, our own complex political system results in swings in the U.S. attitude towards China.
The good news is that, although these underlying causes of trade friction are intertwined and convoluted, I am optimistic -- we are making progress in every area. Trade friction will continue –it is characteristic of a deep and multifaceted relationship.
But hopefully, overtime, many of these fundamental disconnects will find resolution, and we will move into a more mature, workmanlike environment.
We’ve done a respectable job managing our differences in what has become one of the largest and most complex bilateral trading relationship in the world. No more than 3% of total trade is wrapped up in disputes.
#5) The long-term relationship will be based upon investment in the next generation.
Real trust is earned through people to people interaction. This means we must understand each other better.
As we look at how we engage with one another in the present, we must also look to the future. I look to Gracie, our adopted and beloved daughter, as an example of how the next generation can help bridge the futures of our two countries. I was struck by the reception that my family felt when we visited Yangzhou last year. Gracie was born there, the locals knew her story well and they reached out to us - as family - based on trust that we loved and cared for her. In some way we were an extension of the Yangzhou people.
China has invested heavily in the relationship with America over the years, sending its students to be educated in the United States, trusting that many of the best and brightest, motivated by love of country would return home to build the foundations of China's modern economic and scientific systems. Indeed, Chinese scientists who obtained advanced degrees in the United States are playing a key role in China's S&T development and the U.S.-China S&T relationship: 81 percent of Chinese Academy of Sciences academicians, 54 percent of Chinese Academy of Engineering members and 72 percent of National Key Project leaders are scientists returned from abroad (the majority from the U.S.) Nearly nine percent of scientific papers originating in China have at least one U.S.-based co-author. As many mid-career scientists are returning to China, their impact on the overall relationship will continue to grow.
So how about working together to find a cure for cancer, or aggressively pursuing alternative energy research? Our collaborative efforts are capable of producing transformative results!
That collaboration, however, has to start with people, especially our youth. We recently established an initiative to send 100,000 students to China to promote more understanding, more programs of Mandarin-language learning in public schools in the U.S. (own experience in Utah). That understanding requires us to know one another's political and cultural systems better, not just our science, tech and commercial ones.
We’re always trying to find new ways to connect with Chinese and figure out new ways to improve the relationship, to build more trust. Last year we started a new blog and message forum for our visa applicants. We definitely heard from them: we heard the interviews were too long and too short; we found out which officers should be avoided, which officers should work on their Chinese. We also heard from one applicant who said the interview process seemed really hard on the elderly. Thanks to that honest critique, we have taken steps to address these concerns. We trusted that they were providing honest feedback. I mention this because our visa requests are up 40% over the last year, with no relief in sight.
So let me close where I started:
The fuel that powers this relationship is trust.
That is the backdrop against which we operate. When trust is in short supply, we have challenging circumstances. So it is our job to build up that reservoir of trust.
We will continue to monitor one another's activities closely, with good reason, since we have an obligation to ensure first, our country's security.
Thirty years ago, no one predicted the extensiveness of our relationship – a large number of high-level meetings – strategic, economic, commercial, energy-related, cultural, educational, to name but a few – highlighted by President Obama's visit last November and the recent Strategic and Economic Dialogue.
Finally, we must be realistic about our expectations. It’s a relationship that must be managed—and in a way that minimizes the number of grievances. There are sometimes deep anxieties that run in both directions. It will never be a Panda Hugger paradise, nor a Cold War stare down – but probably something in between. And it is in the interest of both countries to manage it with care.
It took Nixon’s trust in China’s reception to make his famous trip there, and Mao’s trust in Nixon to invite him and to engage with the outside world. While the moments ahead will not necessarily be as dramatic as that trip, they will require multiple, continuous leaps of faith, and a reservoir of trust, from both sides. Thank you.
#####