China will not suffer from a Plaza Accord: envoy

It’s always been a great pleasure to come back to the Center for Strategic and International Studies (CSIS), especially with my old friends and colleagues today. I feel inspired every time I come here, particularly as we have the Chongyang Institute for Financial Studies of Renmin University of China (RDCY) with us today.

The term “think tank” is very clear and easy to understand in English. But its Chinese equivalent “Zhiku” is more sophisticated. It literally means a reservoir of wisdom. It not only requires people to think, but also to think wisely. I am sure this is how we should describe the discussions today, which humbles and scares me whenever I am invited to speak to think tanks. I do not intend to offer you anything of wisdom, but rather something that carries common sense.

Honestly speaking, we are facing a big problem. Some people in high places or advise the government and leaders on economic and strategic issues don’t have sufficient common sense. For instance, they believe that they could disrupt the global supply chain in defiance of all the economic imperatives without any damage to their own economy. They believe that they might keep a monopoly of innovation forever and prevent others from making innovations and benefiting from technological progress. They believe they could point fingers at others and escape the heavy responsibility of addressing the increasing economic and social divides at home. They believe that they could make themselves great by making everyone else their enemies. I think it is such a mindset that could go a long way to account for the current uncertainties in international relations and difficulties in our bilateral relations, especially on trade and economic issues.

The topic for lunch is “Next Steps.” On what to do next, for China it is very clear. I wish to advise people to give up the illusion that another Plaza Accord could be imposed on China. They should give up the illusion that China will ever give in to intimidation, coercion or groundless accusations. But at the same time, China is always ready to engage in serious, substantive and pragmatic negotiations and consultations to address the economic and trade issues on the basis of mutual respect and a balanced approach to resolve the concerns of both sides. This has to be a process of goodwill for goodwill and good faith for good faith. If we can reach an agreement through this approach, I don’t think the current economic and trade issues would be that difficult.

And of course many people are worried about the impact the current situation would have on the future of our relations and where China-US relations are headed.

I think they have very good reasons to be worried. But I’m still confident that our two countries would be able to overcome the difficulties and build a strong and steady relationship for the future, as long as we have a clear understanding of today’s world, as long as we have a clear vision of our common future.

People now talk a lot about the socalled “Thucydides Trap.” I have had several very long conversations with Prof. Graham Allison, the author of Destined for War: Can America and China Escape Thucydides’s Trap? I think the key message in this book has been misread and misinterpreted by so many people. In the book, he mentioned 16 cases in history of the relations between the so-called “rising power” and the “existing power.” Out of the 16 cases, 12 ended up in wars and conflicts. Only four of them experienced relatively peaceful transitions. So some people believe that what happened in the past would recur between our two countries.

But I don’t think what happened in the past in Europe is inevitable for our two countries. For America, if you believe so, then why did the American founding fathers come to the New Continent in the first place? For China, it has its own long civilization. Out of all the countries in these 16 historical cases, how many of them practice a type of medicine that takes the body as an integral whole with achieving balance as the key? How many of them use chopsticks that emphasize the coordination of fingers? How many of them use characters in their languages and each character standing on its own would need a good structure, but together they could make numerous combinations in a very flexible way and mean a lot of different things.

I am not suggesting that the Chinese culture is exceptional; what I am saying is that we do have a different choice; we do have a good alternative. Chinese civilization and culture have stressed the values of harmony, cohesion, flexibility, openness and tolerance. If we give full play to these values, I am sure our two countries can find a new path and build a new type of relations between major countries. And indeed, the best way of avoiding a trap is to open a new path. And this is I believe a common task for our two countries and our shared responsibility to the world and to history. Of course, in order to achieve these goals, we need people to show us the way forward, we need people to draw up the roadmaps. That’s why we need people in think tanks, people in CSIS and in RDCY to help us and guide us. I look forward to benefiting from your discussions here today.

Thank you!