The Way Forward
As two major countries in the world, China and the U.S. must work together to combat global challenges. At a three-day webinar on China-U.S. relations hosted by the China-U.S. Exchange Foundation and the China Center for International Economic Exchanges from January 26 to 28, the participants examined the main issues in the relationship and the key areas the two should focus on. Edited excerpts follow:
Carrie Lam
Chief Executive, Hong Kong Special Administrative Region (HKSAR) of China
Over the past 18 months, ties between China and the U.S. have sharply deteriorated and the causes of such deterioration have gone well beyond trade and investment. That is a reality as lamentable as it is harmful, both to the relations between the world’s two largest economies, and to global economic growth.
Equally lamentable, if not a matter of outright resentment, is the unilateral action taken by the former U.S. administration against Hong Kong. Those totally unjustified actions, or “sanctions,” on the HKSAR Government, businesses and individuals were imposed under the so-called Hong Kong Autonomy Act and former President Donald Trump’s executive order.
The Trump administration tried to justify its actions by referring to the enactment and implementation of the national security law in Hong Kong in June 2020. Such argument cannot stand up to scrutiny. It is the legitimate right and duty of every state to safeguard its national security. Hong Kong is a special administrative region of China with a high degree of autonomy under the principle of “one country, two systems.” Given the extreme social unrest and violence that overwhelmed Hong Kong in 2019, the enactment of the law was both necessary and rational.
The law is clear and focused on four types of acts and activities that endanger national security. It contains specific provisions upholding Hong Kong people’s rights
and freedoms. It also provides for important principles of the rule of law, including presumption of innocence, prohibition of double jeopardy, and the right to a fair trial. These important features have made the law on par with, if not superior to, similar national security legislations in other jurisdictions, including the U.S.
As a matter of fact, since the implementation of the law, the street violence that haunted Hong Kong for months since June 2019 has subsided and stability has been restored. Such a stable environment is vitally important to the prosperity of Hong Kong and the business activities of both the local and overseas enterprises here.
Hong Kong has long been a gateway between the Chinese mainland and other parts of the world. Instead of being caught in geopolitical tensions between nations, particularly between China and the U.S., we hope to play a constructive role, leveraging on our unique advantages under “one country, two systems.”
Indeed, Hong Kong and the U.S. have enjoyed longstanding success in business, trade and finance. In 2019, bilateral merchandise trade reached $66 billion. The U.S. trade surplus that year amounted to more than $26 billion—the highest among its many trading partners.
Regarding financial services, U.S. banks, insurers and private equity firms are major players in Hong Kong’s financial sector, which accounts for over 20 percent of the GDP. They stand to benefit from Hong Kong’s participation in the continuous reform and opening up of the capital markets on the mainland. Thus, both in trade and investment and finance, Hong Kong is a highly valuable business bridge between China and the U.S.
Zeng Peiyan
Chair, China Center for International Economic Exchanges
Different social systems do not mean the two countries will inevitably head toward confrontation; coexistence and mutual progress are absolutely possible. China has no intention of changing the U.S., let alone replacing it, and it is impossible for the U.S. to impose change on China unilaterally.
The changing times have overturned the basis for the so-called Thucydides trap [a situation in which an established power regards a rising power as a threat.] The U.S. should abandon the narrow mentality of zero-sum game and work with China to build a relationship based on coordination, cooperation and stability.
China is a participant in and contributor to the current international order, bringing opportunities, rather than threats, to the world. In 2020, China was the only major economy with positive growth and it has been the world’s largest growth engine for 15 years in a row.
In the past 40 years since the establishment of their diplomatic ties, trade between China and the U.S. has increased by more than 250 times, which has created 2.6 million jobs for the two countries. Bilateral investment has risen from almost zero to nearly
$240 billion, with more than 90 percent of the U.S. companies investing in China making profit.
The U.S. should make concerted efforts with China, avoid confrontation and achieve mutual benefits. The two sides should restart dialogue, reshape economic and trade ties, improve mutual trust and expand overall cooperation.
Major countries play an important role in global governance. As China and the U.S. share responsibilities and interests in areas such as epidemic prevention and control, climate change and global poverty eradication, they should step up coordination, build a framework for cooperation, and work with other countries to address international issues and the major challenges facing humanity.
Carlos Gutierrez
Former U.S. Secretary of Commerce
When you call someone an enemy, they become your enemy. We are not an enemy of China, and I don’t think China is an enemy of us.
During George W. Bush’s administration, we always talked about the rise of China. We have never, until recently, talked about a strategy of containing China. I hope that we return to an attitude that is reminiscent of President Bush’s attitude and point of view regarding U.S. relations with China.
It is impossible to decouple the world’s top two economies, which have seen their interests intertwined and closely relying on each other. The two countries need to work together to avoid a new technological cold war. Technology is moving so fast that it will always be ahead of policies and ahead of governments’ ability to stop it, change it or modify it. A technological decoupling would not only isolate China, but also the U.S.
The U.S. desire to continue its technology supremacy should not come at the expense of China’s ambitions. Similarly, China’s innovation and technology goals should not be at the expense of those of the U.S.
The bilateral relationship should not be one based solely on transactions, but rather one that encourages a more strategic partnership that enhances areas of collaboration while avoiding frictions. They should keep trade deals and national security issues on separate tracks to avoid full-blown decoupling. Combining trade and investment with geopolitics and national security complicates bilateral relations.
The top priority for President Joe Biden and his administration should be holding discussions to resolve trade disputes. Communications should be reestablished so that the two nations can get back to the negotiating table.
Carla Hills
Former U.S. Trade Representative
Biden has shown his commitment to multilateralism and believes in free markets, so his definition of the relationship between China and the U.S. may be different from that of his predecessor, Trump. The tone in which we deal with all international governments, including China, will be more diplomatic.
We may see a return to some of the normal policies of Barack Obama’s administration. However, I don’t think the U.S.China relationship is going to improve very much economically and politically. Some of the policies that the U.S. has adopted toward China in the last four years may not change.
China and the U.S. must increase their areas of cooperation and reduce areas of tension as their over 40 years of bilateral cooperation have proved beneficial for both nations. They must sit down for talks during times of crisis in the bilateral ties and refrain from imposing restrictions on investments from either side. And the initial focus of the Biden administration’s cooperation with China could be areas in which the two nations share the same goals, such as climate change and global health.