CCG Dialogue with John Thornton, Stapleton Roy and Adam Posen

[English]

【中文】

Six months into his presidency, US president Joe Biden has made major strides on his domestic and foreign policy agenda. Yet, the tensions between the US and China have shown no signs of easing. Many see the Biden administration’s emerging China policy as more of continuity than breakaway from its predecessor. As the administration promised a balance between competition and cooperation amidst a series of exchange between senior officials from both sides, what are future steps to be taken to break the impasse and move the bilateral relationship forward?   

On July 30th, on the theme of “Balancing competition and cooperation amid global challenges: What’s next for US-China relations?”, CCG President Wang Huiyao hosted a dialogue with Adam Posen, President of the Peterson Institute for International Economics (PIIE); J. Stapleton Roy, Founding Director Emeritus at the Kissinger Institute on China and the United States of Wilson Center; John L. Thornton, Chair Emeritus at the Brookings Institution and Co-Chair of the Asia Society and ZHU Guangyao, CCG Advisor and former Vice Minister of Finance of China.

This dialogue explored the past, present and future of the China-US relationship and was part of CCG’s 7th Annual China and Globalization Forum.

Wang Huiyao: Good evening and good morning, depending on where you are, and also good afternoon. Thank you for tuning in. We are very honored and pleased to host this CCG China-US think tank dialogue, which is part of our 7th annual China globalization forum. This dialogue is co-organized with the Asia Foundation.  CCG China and globalization forum is a flagship annual forum that we hold once every year and this year, we have drawn a very large attendance. Since 2015, this year forum is probably one of the largest that we hosted in conjunction of CCG  council members and during the last 2 days, we brought together the most prominent business leaders, government  officials, academics and also non-government sectors and had over 400 to 500 participants, including 50 ambassafors and seniior diplomats from different countries as well as over hundreds of representatives from internatioanl organizations and MNCs and goverement officicals and academics. Now we're getting into the webinar part of our conference, which is open to all to watch this online. This forum discussed ongoing pandemic and how we can cope with that, with new cases discovered in China. It's one of the issues we talked about, as well as global economy, trade, mobility of the people, China-Europe economic cooperation, global cooperation and the China's new development plan. And, of course, China's international communication and narrative as well.

Tonight features China-US think tank dialogue which is joined by 4 very distinguished speakers with the theme of “Balancing competition and the corporation amid global challenges - what's next for the US China relations?”. Last week, the US Deputy Secretary of State, Wendy Sherman, just concluded her visit for the Biden's administration to China and a new Chinese ambassador, minister Qin Gang has just arrived in Washington this week. So we have a lot of questions and lot of curiosity for how US and China can maintain its momentum of a diplomatic dialogue. But also, we want to hear the views from our speakers today, which is from Adam S. Posen, Ambassador Roy, John L. Thornton and also Mr. Zhu Guangyao. Let me quickly introduce our guests today. Adam Posen has been the president of the Peterson Institute of international economic since 2013. The Peterson Institute is a well-known independent nonprofit nonpartisan research organization dedicated to strengthening prosperity and human welfare in a global economy through experts' analysis and practical policy solutions.

Over his career, Adam has contributed to research and public policy regarding monetary and fiscal policies in the G20, the challenges of European integration since adoption of euro and China-US economic relations. The Peterson Institute is also very active in developing new approaches to financial recovery and stability. During his presidency, the Peterson Institute has won global recognition as the leading independent think tank in international economics. 

And, of course, we have our old friend, Ambassador Stapleton Roy. He is the Asia Foundation's honorary director and also was a former US ambassador to China. The Asia Foundation is a non-profit international development organization committed to “improving the lives across a dynamic and developing Asia”. Roy is a fluent Chinese speaker, he was actually born in China and has spent time in Chengdu and has a lot of good fond memories there. He spent much of his career in the East Asia as a 3-time ambassador serving as the top US envoy in Singapore and People's Republic of China from 1991 to 1995 and also Indonesia. And in 1996, he was promoted to the rank of career ambassador, the highest ranking of the United States foreign service. Also, now Roy is the founding director emeritus and also a distinguished scholar of Wilson Center’s Kissinger Institute on China and the United States and a trustee of the Carnegie Endowment for International Peace. As we all know that this year also marks the 50th anniversary of Dr.Kissinger secret visit to China, this is one of our topics tonight as well. 

Mr. John L. Thornton is the Chair Emeritus of the Brookings Institution and Co-Chair of Asia Society. The Brookings Institution and Asia Society are two very prominent think tanks and in United States, it has really had a big influence not only in the US but also in China and the world also and John is the chair of both organizations speaks volumes. He's also the executive chairman of Barrick Gold and Chairman of Pinebridge Investments. And on top of that, John is also a professor and director of global leadership program at the Tsinghua University School of Economics and Management in Beijing. John retired in 2003 as President and a member of the board of the Goldman Sachs Group. John has a very long and enriched career. In 2007, Institution Investor Magazine named Mr. Thornton as one of the 40 individuals who had the greatest influence in shaping global financial markets over the previous 40 years. And he was also a recipient of in 2008 of the Friendship Award of the People's Republic of China, which is the highest honor, accorded to a non-Chinese citizen. And the Chinese government also named him as one of the 15 “foreign experts” who had made the most significant contribution to China's development over the previous three decades, so this is a very notable achievement.

Now allow me to introduce my friend, also my colleague at the State Council Consellors Office,  minister Zhu Guangyao, who is a CCG advisor and a former Vice Minister of Finance of China from 2010 to 2018. Minister Zhu oversaw the Customer Tariff Department as well as coordinating the economic track of the China-US Strategic and Economic Dialogue and the financial ministerial merting of the G20. He joined the Ministry of Finance in 1985 and has served in various senior positions with the Ministry, and was also Senior Advisor, Alternate Executive Director and Executive Director of the China to the World Bank in two occasions. We are very pleased to be joined by Mr. Zhu. As for myself, I'm the founder and president of the Center for China and globalization, one of the leading Chinese think tanks one of the top world think tanks 100 ranked by University of Pennsylvania. This is a dialogue between Chinese and US think tanks and I'm very pleased to be the host of this dialogue tonight. I would like to start with Adam. You are actually very knowledgeable. You've been traveling to China often and I see that you have made a lot of remarks about China and US and how they should collaborate as well as how to improve the CPTPP and a lot of trade issues. What is the thinking of the US and Chinese economy and how we get out of this pandemic? How about the US-China relations? What about trade, which is one of the themes of our conference today - people view that as a biggest promoter for the global future development, as the World Bank’s China director said in our conference today. So what do you think, as you are very savvy in this subject? 

A multipolar world emerges where the US is not the only dominant country

 Adam S. Posen: Thank you very much President Wang for including me on this distinguished panel and congratulations to your center for continuing to lead substantive dialogue in China and globally. Obviously, this is a major conference. I think the big message of what the questions you raise is really to say that the US-China conflict and frictions are not about economics, even though they currently take place in economics. And this has been a major preoccupation under Trump and again under Biden. As I argued in my recent article in Foreign Affairs on “The Price of Nostalgia”, it mostly is being driven by politics in both China and the US, where basically the males working in industry, in non-urban centers, are blackmailing the rest of society and we see this with the state-owned enterprises in China, we see this with the trade bailouts of the heavy industry in the US. And in both countries, those parts of the economy are the shrinking part of the economy and a shrinking, even faster, part of employment. They also are industries that are of course toxic to our environment as well as to our politics. And so what we are seeing is both the American and Chinese peoples are being ill-served by the trade conflict. And it's not about economics. So what we've seen under the Biden administration and in response in part of its own initiative from the Xi government is a shift now from trade to worrying about technology. Obviously, there have been frictions for many years, the others on this panel have been dealing with them directly for even longer than I have over issues of intellectual property and government subsidies. But for the most part, these have not been issues that should have imperiled the broader relationship on an economic basis. What is escalated it now is the sense in the US and China that each is posing a genuine threat in the geopolitical sense and in a sense to their system or their legitimacy. And this is a reality among the official class in both Washington and Beijing. There's some good reason for it, it's mostly exaggerated and colors every interaction. And so the question is what can we do from here?  Let me make three very brief points, so you can get to the others on the panel. First, remember that both US and China have led the world in recovery from the Covid crisis and are both growing well above trend growth rates right now by a large margin. So this is not a question of either is depriving the other of economic recovery. So there is no conflict over currency right now. There is no issue of Chinese surpluses coming at US expense. There is no issue of financial instability being promoted from one to the other or back and forth. So we have to focus on the non-economic issues, which is funny for an economist like me to say. The second point is as you've indicated in your set-up for this discussion, President Wang and others who have spoken about - even though it's boring, it has to be said - the biggest opportunity for collaboration between China and the US is on climate change issues. That was the case when President Obama was here, when our friend Minister Zhu was very active in the G7 and the G20, and that remains the best place for us to collaborate at this time. And third, since you were wise enough, generous enough, to convene a group of think tankers. I just want to say that we – like CCG, the Peterson Institute, Brookings, Kissinger Center, the Ministry of Finance - we all have a role in continuing to say that we should not be afraid of honest dialogue among experts. We have a common enemy in conspiracy theories and disinformation. And we think tanks should be bounding ourselves together to emphasize the possibility of objective analysis and honest frank talk. Thank you very much for this opportunity. 

Wang Huiyao: Thank you Adam for your great opening remark. I agree with you, that it seems that now economic issues have deterred us from talking of the real substance whereas in time we need to collaborate on pandemic fighting, climate change and many other things. So this is really needed - a frank dialogue between the 2 sides’ think tanks. I should also let ambassador Roy give opening remarks as well. You are a seasoned diplomat who knows China since you were a child and you lived through many years of turmoil. I remember visiting you in your office when I was as a visiting fellow at the Brookings in 2010. You showed me some photos and you have written so many things about China. So now we had the new Chinese ambassador go to the US, we don't know wehn the US ambassador is coming to China, but we had a visit of the US deputy secretaryWendy Sherman. What's your take  on Sino-US relation’s past, present, and future? This year is 50 years’ anniversary of Kissinger’s visit to China. Just on the 11th of July, there was a live dialogue with him to commemorate his historic visit - we had a dialogue with Dr. Kissinger that day – your institute at the Wilson Center is named after him. This year is also 50 years after China joining the UN,  20 years after China joining WTO, 30 years after China joining APEC and 30 years since the ending of the Cold War - so there are lots of things going on, in terms of the past, present, and future. As a senior advisor, your voice and your thinking is widely noticed, so ambassador Roy, your turn, please.  

J. Stapleton Roy: Thank you Dr. Wang and good evening to all of you who are in China. When President Trump lost the November 2020 presidential elections in the United States, some people hope that President Biden would adopt a less confrontational approach to relations with China. They have been disappointed. Early steps by the new American administration toward China seemed to be a continuation of President Trump's hardline policies. Shortly after the administration took office, the new Secretary of State echoed the charge of his predecessor that China was engaged in genocide against the Uighurs in Xinjiang. The tariff barriers on bilateral trade have been left in place. Senior officials in the Biden administration, bluntly stated that the US engagement strategies toward China had failed and that competition is now the principle driver in the bilateral relationship. For much of the last 50 years, the United States was confident that China's growing wealth and power did not threaten United States’ vital interests and their differences could be managed by diplomacy and engagement. That is no longer the case. And the question is why. A starting point to understanding what has happened is to recognize that the United States and China are both in the midst of fundamental transitions that affect their respective places in the world. The United States is seeking to adjust to an international situation in which it is no longer the sole superpower. This is not so much because of a decline in power, but because other countries have risen to major power status and China, of course, is the first and foremost example of that. A new multipolar world is emerging. Not surprisingly, the United States is reluctant to give up the dominant position that is has occupied since the end of the Cold War and to accept the adjustments that must make in order to establish a new equilibrium. At the same time, there is no question that the social and political polarization that has been a prominent feature of the US domestic scene over the last half decade has damaged the international image of the United States and the perception of its reliability as a great power. China, in turn, in a remarkably short period of time, has regained the wealth and military strength that are the attributes of major powers. This has altered the psychology of the Chinese people. This is what Zheng Bijian didn't take into account when he came up with the concept of peaceful rise. The Chinese people now are demanding a more muscular foreign policy, consistent with China's growing power. And this change Chinese behavior patterns, which have become more assertive. As a result, regional countries, including the United States finding China's assurances less and less credible that it will rise peacefully and never bully its neighbors. These are two of the key background factors that have influenced the sharp plunge in the bilateral US-China relationship, to the lowest depths in half a century. This has created a dangerous situation. Where missteps by either side or by both, could plunge the world into an unprecedented crisis. I use the term unprecedented, because China and the United States are both major nuclear powers. And confrontations between them are particularly dangerous, repair work by both sides is vitally necessary.

Fortunately, despite some superficial similarities, the Biden administration is fundamentally different from his predecessors. President Biden has more foreign policy and national security experience than any American president since the first President Bush 30 years ago. In contrast to the Trump Administration. President Biden has appointed capable and experienced officials as secretary of state and national security advisor. These are officials who could sit down without talking points and talk for hours with Chinese counterparts about any issue in the world. Now this was totally missing in the last administration. The Biden administration is moving carefully, to iron out internal differences and adopt sustainable policies that will not simply reflect the whims of a woman. Of particular importance for US-China Relations, the administration has reaffirmed that it will adhere to one-China policy and that it does not support independence for Taiwan, it is also seeking a pattern of regular consultations between Beijing and Washington.

The recent consultations between US Deputy Secretary of State Wendy Sherman and state Councilor Foreign Minister Wang Yi and Vice Minister Xie Feng were surrounded by a barrage of charges by each side against the other. However, if one reads carefully the public reports regarding the consultations. It is evident that there were constructive elements. According to the Chinese account in the meeting, Deputy Secretary Sherman called the US-China relationship as the most important bilateral relationship in the world, noted the many times that two sides have had contact with each other since President Biden was sworn in, expressed US’s willingness to have open and candid contacts and dialogues with China, declared the United States’ hopes that the two countries could coexist peacefully, said that the United States has no intention of restricting Chinese development and does not want to contain China and would like to see China develop further. Noted that the two sides can engage in healthy competition, cooperate on climate change, drug control in international and regional hotspots and strengthen crisis management capacity and avoid conflicts. American accounts of the meeting she had are consistent with the above statements. These are encouraging words that you would not have heard from the previous administration. 

However, the reality is less positive. President Biden needs congressional support for his domestic programs and congressional attitudes toward China are hostile. Changing these attitudes will be difficult but not impossible. A hardline American approach to China does not mesh well with the interests of US allies and friends in East Asia who do not wish to see the region polarized. In other words, the United States that tries to work with our friends and allies will discover that they do not support a hardline approach to China, and I think that will have an impact overtime. But as the first step, it would be useful for both China and the United States to tone down their rhetoric toward each other. Governments have the responsibility not only to formulate wise foreign policies, but to talk in ways that develop public support for those policies – and we are not doing that. We are talking publicly in ways that undermine the wise policy that we should be pursuing. So as a starter, let's get our rhetoric under control and I hope that will have some chance to exchange views about other steps that could be taken.

 Wang Huiyao: Thank you, I agree that it’s a deep concern on both sides that we seem to argue and quarrel at each other all the time. Trump has done quite a lot of damage to the existing relations. One of the problems with the Trump administration is that its core team is not that savvy on China. I had a debate at the Munk debate with Mr. H. R McMaster who is a retired general and a former National Security Advisor of Trump, whomaybe did not have much knowledge on China and with Mr. Michael Pillsbury as well. General McMaster perhaps is more knowledgeable  on the military front. So there was a lack of a great China team  in the Trump administration. But you’re right, we see President Biden has a lot of knowledge of foreign policies, as you said, and he is a president that has spent more time with President Xi than any other leaders in the world and he called the Chinese President  on the Eve of Chinese New Year and said Happy New Year to Chinese people  and issued an executive order banning the use of terms of the China virus. Consequently, all these good moves  have been noticed. But somehow lately, we see there was some acceleration of changes, maybe from the Chinese point of view, such as the G7 summit where there is also an agenda   on China and the NATO summit, the US-EU summit, the US- Russian summit and so on. So now I'm glad that the Deputy Secretary Sherman visited China, we hope that we're going to start a new dialogue. 

I think the dialogue this time in Tianjin was more concrete now as there's a lot of issues being raised and proposed. We hope to reduce all those frictions on both sides. One of the things that is of great concern, is tracing this origin of the virus from lab. This had already  actually been criticized during the US election and before  they won the election, the Democrats already said that is a conspiracy theory. Because the WHO already sent a delegation that went to Wuhan, and they came back with a suggestion that it’s the least possible to have this kind of man-made virus from labSo, on issues like that, to have FBI or CIA make a conclusion is something we should not emphasize  on, because it's going to divide the current efforts of trying to dialogue. This virus origin issue is getting hot under the Biden administration. Other than that, there's dialogues between the USTR and the Chinese Vice Premier and Commerce Minister, which is great. But the virus origin tracing is not a practical idea. I don't know if you have any comments on that,ambassador Roy. 

J. Stapleton Roy: A very brief comment. This, in particular, is an issue on which we should be cooperating and not fighting each other. I think it is important to trace the origins of the virus and we have our own views about how that should be pursued. But the basic point is the pandemics threaten every country in the world and if the two leading countries in the world are unable to cooperate in dealing with the common threat, then there's something wrong with both of us and we need to consider what the problem is that is preventing us from cooperating on this vital issue. 

Wang Huiyao: I agree with you, and the US and China should work together to fight against with the mutant of this virus. This morning, we had a conference where there were 15 ambassadors from Europe, Asia, Africa, Latin America and so on and also the US. ministerial counselors attending. They all agreed that the whole world should act together for the mobility of the people around the world such as working on vaccine passport or certification as well as finding out the ways in which we can really make economic to go around, rather than focusing on non-urgent issues because some cases actually appeared maybe even before Wuhan. But let’s do it systematically rather than ping-point at China. Again, I hope we're not getting stuck into that.

Now I'd like to invite Minister Zhu after hearing two think-tank leaders from the US. You are a CCGadviser, and you work for the think tank of the Ministry of Finance, after attending our conference this morning, speaking with Chinese business leaders and government officials like former Minister of Commerce, Chen Deming and former Vice Minister of Commerce, Chen Jian, and a host of other international experts. Since you are a top expert in China on the subject and you led the strategic and economic dialogue and were you are a shepherd for G20, what's your take on this issue, Minister. Zhu? 

The US should reconsider its position on tariff and Xinjiang

Zhu Guangyao: Thank you very much Huiyao. It's my honor to join this distinguished panel, particularly after President Posen’s and Ambassador Roy’s speech. I’ll try my best to discuss and give some response to Adam’s and ambassador Roy’s points. Firstly, on the tracing of the origin of the virus - I remember in April last year, I had a phone call with Adam, regarding how China-US cooperation can move forward to deal with challenge of pandemic. At that time, Adam suggested the two great countries must cooperate and enhance the transparency and work together within the WHO system. Despite the US administration’s attitudes toward WHO, Adam firmly supported that the WHO plays a leading role and emphasized the importance of cooperation between China and the US to deal with challenge of the pandemic. And I remember clearly that he also suggested us to pay attention to the situation’s development. After China controlled the situation well, the global situation continue deteriorating and then he pointed out three ‘I’ titled countries, India, Iran, and Indonesia. He suggested us to think about the global situation that is continually deteriorating, particularly the three “I” countries. Unfortunately, what Adam said at that time has become reality. Until today, the world is still in the very difficult pandemic situation, which is not just a public health risk, but also has already become a systematic risk in the whole world economically and governance issues are also deeply impacted. And that’s why we really need the two important economies, China and the US, to cooperate together.    

Unfortunately, just as President Posen and Ambassador Roy said, China- US relations now is absolutely in the critical juncture and I think the big issue is the trust between each other. As Posen said, it’s something that is beyond the economy. Indeed, that’s the situation. But as two important countries, we must keep communication and steadily increase understanding of each other and try our best to restore the trust. I know this is not easy to do. But I still think that economic relation is the anchor for our relations. Last year, China-US’s trade volume reached 580 billions. And in the first half of this year, that number increased more than 50% of the total amount compared to the last year. For the six months of this year, the total amount of US China trade has already reached 340 billions. So, even facing the pressure politically and other negative impact, including both sides’ negative public opinion, we see trade still increases, which is a good thing. And that is, I think, very integrated economies have made our interest so closely connected. But I agree with Adam Posen that trade tariff and technology war have very negative impact. How we restore our basic communication now is really important. Just now, Ambassador Roy mentioned the Biden administration’s team is professional, I agree with it. I used to deal with many officials in Biden’s team, and I understood they are indeed professional. But I must point out some key issues that Biden administration should correct immediately since that is a part of the US interests, including tariffs - just as Secretary Yellen said, are not in US’s interests and damage the benefit of the US consumers . However, until now, six months passed and there isn’t any single change. And as for the key issue beyond tariff and the economic side – on the political side, as ambassador Roy mentioned, such as the genocide issue, which is an absolutely wrong judgment made by the last administration within the last two weeks when they were in position. They used this as a reason to block import of all cotton and tomato produced in Xinjiang. Unfortunately, the secretary of state in the Biden administration still conforms the previous policies and continued to blame that in Xinjiang there are genocide of Uighurs. And this kind of standpoint is definitely wrong and makes it dangerous for China-US relations. And just as Ambassador Roy said in his words – “an unprecedented risk”. I think this one is a real cause to result in and we must use public and private conversation and communication to solve the problem and that's why China welcome foreigners to visit Xinjiang and I know that foreigners can freely visit. We should have a real professional way to solve the problem. These obstacles must be overcome and we must find real facts to solve this problem. And this is the key for Chinese principles and this is just one of the cases. I do think that such communication is very clear to the point and is a very useful option on the table. 

Adam suggested three points of that kind, which I think are very important. One thing Adam said is that there is something beyond economic situation. Yes, we should have more comprehensive discussion and to realize it, we should find a way to expand our discussion beyond the economic. Also, I think that everything will be connect in terms of economic relations because US entrepreneurs need good environment for their investment in China and Chinese investments in US. Second, climate change certainly is a practical way for cooperation, including ESG (environment, social and governance). I think this has already become beyond the pure climate change issue and it is broader and more comprehensive and think tank certainly is a real channel for our cooperation.

In this regard, I figure out four points suggestions. One is we China and US must find the way to deal with each other’s challenges, to develop peaceful coexistence. Based on communication, mutual understanding, we could enhance our cooperation into the peaceful coexistence. Second, both China and the US need to keep on opening and reforming. China is deepening its structure reform and is more open to the outside world for our domestic interest of course, and this is also in line with global cooperation.

The third point is we must have real cooperation in our multilateral system on trade and financial institutions, WHO, IMF, World Bank, and other UN special agencies. The global network needs our operation to maintain, improve and to enhance it, ensuring the peace and development of the world. Last one, I suggest we keep this real dialogue and communication, and we need real mechanisms such as S&ED (US-China Strategic and Economic Dialogue), BIT (US-China Bilateral Investment Treaty) in the Obama administration to which I joined that negotiation discussion and now it’s 90% finished. The most important issue that have been not solved is digital economy which is related to data flow across the world, data privacy issue which has become more important today. And now every country, including US China EU and others is emphasizing domestically how important the development of digital economy as well as enhancing the security of civil system and privacy. These all need global condition and global negotiations. Maybe one possible breaking point is E-commerce negotiation in WTO. I know that's still very difficult, but we should try, which is for the future growth and the real need for our cooperation between China and US. 

Wang Huiyao: Thank you, Minister Zhu. You raised many good points, among which I particularly agree with you is the standing issue of Xinjiang. Of course China in the past has no experience dealing with terrorism so the situation could be improved. However, it is definitely no  genocide in Xingjiang. I think that Pompeo came up with that statement and then Blinken went along with it to testify in order to pass norminatiom at the senate hearing. Access to Xinjiang is now really open, all the foreigners can visit there. Recently, we talked to some foreign embassy officials - the ambassadors didn’t go but the embassy did send staff there. They came back with their own report. It's obvious there's nothing like genocide. So now, there's nothing special restriction for foreigners to visit Xinjiang. Just buy your ticket and you can go and see whatever you would like to see in Xinjiang. So, I think that issue must be sorted out so that we can reduce the tension.

And on seeking more collaboration as Minister Zhu mentioned, if the 90% of the US China BIT negotions has concluded why can't we continue this 10% remaining? On data issues, now, after six years from Obama administration, we have had lots of new progress. Now, China is a country with much more  big data  and data is like oil - if you don't flow data there is no wealth being created. And there are  other changes - China recently agreed to join the OECD minimum global corporate tax plan, which is proposed by G7 and G20, which is a good example of how we can avoid these loopholes of tax heaven and then tax return can benefit both the host and home country. Also, we can talk about collaboration on WTO as Minister Zhu said, as well as CPTPP which was proposed by the Obama administration to which China announced that it's going to join as the Ministry of Commerce has put the CPTPP agreement on its website. So that's the standard and target that we should aim for. China is not afraid of talking about these points but I hope that we have more channels to talk, including the WTO.

Now I really would like to invite John Thornton, a very well known and highly influential panelist. John, you have been the honorary chair for Brookings for a long time and the John Thornton China Center in Brookings is named after you. More than 10 years ago, during my days at the Brookings as a visiting fellow, it was already there. You are also the co-chair of Asia Society, which is a very influential bridge between the US and China. On top of that, you are very familiar with China, you were the first American to become a professor at the Tsinghua’s Economics and Management School. During last year’s CCG Annual Forum, you  talked about thedeficit of trust between US and China and how we can  build up the trust. Now we are half year into the new Biden administration, what more can be done? John, you have the floor, please. 

The US-China relationship is the most important bilateral relationship of this century

John Thornton: Thank you Henry and thank you for inviting me to participate in this very interesting and important dialogue. And I'm honored to be a member of this particular panel. We’ve already heard quite a bit of wisdom from my three colleagues and I will try to make a modest contribution to that. What I'd like to do is to step back from the breathless statements of doom, which dominate much of the media commentary, in the media, among politicians, and among so-called experts, or even the thoughtful observations of concern, which may be overly influenced by specific current actions by one party or the other.

The US-China relationship is and will be both the most important bilateral relationship of this century, and the one which will drive or create in large measure the world in which we all will live. In general, I am skeptical of the tweaking statements about inflection points or decoupling or Cold War analogies. For me, these kinds of statements are mostly emotional, provocative, not helpful and wrong. I think we're better off looking at the long term and the trajectory of the dynamics trends and forces creating that long term. Recently, I have taken to looking at the mid-21st century, the year 2050 or thereabouts. The best estimates are that the world's population in 2050 will be about 10 billion people. Today we are approximately 7.8 billion. The incremental 2.2 billion - more than half of them will come from 9 countries: India, Nigeria, the Democratic Republic of the Congo, Pakistan, Ethiopia, Tanzania, the United States, Uganda and Indonesia. In 2050, as now, a small percentage of the world's countries will represent 65 to 70% of the global GDP - maybe the top 10 countries will represent that. In that world, in which very few countries dominate the global GDP, and in which the incremental 2 plus billion people are coming from very poor countries, does any serious thinking person believe the world would be better off with the rich countries primarily arguing or even fighting amongst themselves, while the rest of the vast percentage of the world remains poor, malnourished, victims of climate change, sources of migration and disease and poverty? Or do the wealthy most powerful countries have a responsibility to work together to lead the world to a safer, more prosperous, harmonious place? Isn't the answer obvious? If the answer is so obvious, then why does it feel or seem that at least some maybe many of the world's richest most powerful countries do not seem to be animated or motivated by such a collective goal? 

There are a myriad of answers to this question, but it certainly includes a penchant for being captured or trapped by the past’s old thinking, as well as a fear of change, of losing one's place. Whatever the reasons, surely the world's two most powerful countries, the US and China, have a disproportionate responsibility to lead the world. Of course, with others. And there is no reason why they cannot do this. In fact, we have a unique asset at this very moment in history, which we have never had before. An extraordinarily powerful asset: the newly elected US President Joe Biden has a pre-existing relationship with the Chinese President Xi Jinping. When President Biden and Xi were vice presidents of their countries, they spent extensive, continuous, informal time with one another, probably more genuine private time than any two US and Chinese presidents have ever spent with one another. This is a gift from p providence. We cannot throw this asset away. Indeed, we must use it to its fullest extent.

Knowing the two presidents, Biden and Xi, as people, as human beings, as leaders, does anyone think that a well-conceived meeting, one on one, between the two of them, would be anything other than a strong, good, healthy, warm and productive meeting? And knowing what we know about the two countries and their positions in the world, does anyone think such a good meeting would not be well-received by the American and Chinese people, or by people all over the world? Of course, it would. This is not that difficult, and there is a screamingly obvious place to start: climate change in the G20 meeting in Glasgow. The issue of climate is a global one, it is larger and more important than the US and China. The entire thinking world wants it to be solved or well-managed. The two leading countries must lead on the solution or it will not be solved. Everyone knows this. Tellingly, the two presidents are following the only path, the only modus operandi, that works in US-China relations - one might call this the Zhou Enlai-Kissinger Kissinger model, or, more recently, the Liu He-Lighthizer model. The only model that we know works is when the US and Chinese presidents appoint a very senior, serious, experienced, highly trusted individual. And together the two presidents instruct the two people to get into a metaphysical room, truly work together, build a relationship of trust and do not come out until they have solved the problem. The two presidents have done just that with the appointment of John Kerry and Xie Zhenhua. Meanwhile, it would be helpful, while the two are doing their work, if the two sides moderated their language about all other matters. Or as Stape said – “tone down the rhetoric”. No other matter by definition is as important as the existence of the planet. Mankind has to exist for all other matters to have an opportunity to flourish and or be addressed. This is a point of simple compelling priority. Both presidents have publicly said that they will cooperate on climate irrespective of other issues. Both should instruct their senior leaders to give the existential issue a real chance to get resolved. Finally, to state the obvious, success on climate will demonstrate yet again that the US in China working together can lead the world to a better safer, healthier, more harmonious existence. This is good for both countries and the world and gives hope and a concrete model, that all other gnarly complex problems can likewise be addressed by the two leading countries working together with others for the collective benefit of their countries, their peoples in the world. Thank you. 

Wang Huiyao: Thank you very much. John, you have an excellent proposal. I think you have gone really deep on that I agree that this relation between China and the US is the most important in the world and of course, we can work on many issues, given the world is really having profound changes as you outlined. Knowing that the population is going to hit 10 billion by 2050, we need a longer horizon and need to look at history with a broader view. When I had a dialogue with Joseph Nye, he also talked about that by 2035 or even later, maybe China and the US would treat each other differently, less hostile than today because we have the world in mind and it's going to make a huge difference. Now we have challenges like climate change, like floods in Europe, floods in China’s Henan, wildfire in North America, which we really need to contain. And I agree with your brilliant idea that since President Biden and President Xi have a such a great personal rapport, they should appoint special envoys and what you regard as Zhou Enlai-Kissinger and Liu He-Lighthizer model. These are really great. 

I may have a follow-up question since you are in the investment community and you had been leading the Goldman Sachs for so many years. The world really needs a lot of help and you said nine countries are going to be populous in the next several decades. The infrastructure seems to be what's lacking in many  developing countries. As a matter of fact, at this CCG annual forum, former Vice Minister of Commerce, Chen Jian, who looked after the Chinese outbound investment for many years, actually said that what had been proposed at the G7 conference about B3W could be looked at together with China's BRI and other EU investment plans. The world should work together with some infrastructure plan and to look at the future, particularly for the developing countries. As a matter of fact, President Xi had a video conference with French President Macron and Angela Merkel, the German Chancellor, just several  weeks ago, and they talked about China-EU collaboration in Africa. We need things that glue these countries together to work on a better objective, rather than being obsessed with these non-urgent issues such as tracing the source of the virus. So what do you think? John, please. 

John  Thornton: First of all, I want to remind people that the BRI - when it was first conceived back in 2013 - there was a G20 meeting, and President Xi met with a very senior American who is standing in for President Obama as President Obama was not present. And in that meeting president Xi told the Americans of the concept he had with the BRI, and the senior American said to President Xi, "What a fantastic idea, maybe we can do this together?" And President Xi said, "That would be an excellent idea, let's do it together". And the senior American went back to the United States and  in the next six months or so, the Mandarin technicians decided it wasn't a good idea, and the idea got killed in the US before it ever got to President Obama's desk and so the cooperation never occurred. And since then, as you know, the BRI has been characterized by many people in the United States as some kind of nefarious geo-strategic plan to take over the world and it’s not. Now to your direct question, of course, the B3W and BRI - all those efforts should be coordinated globally by the wealthy countries, trying to build the infrastructure necessary for the rest of the world, so that we build a safer, more prosperous world. We all know these projects are very difficult to execute, it's not as though anyone's got a monopoly on how to do this well. They are hard. And we would be doing ourselves a great service if we the world became particularly expert at building important infrastructure all over the world in an efficient manner for the benefit of the respective. So obviously we should be doing it, there's no question about that. 

Wang Huiyao: Thank you. Actually, I heard the same story last year in February at the Munich Security Conference where CCG hosted a roundtable. We had the former Secretary of State John Kerry as a speaker there. He actually mentioned that when he met President Xi, he was inviting China to join the Paris Accord and President Xi also invited the US to join the Belt and Road. At the time, John told me that it was a positive concern, but the mandarin technicians somehow lost it in the system and it never materialized. But I think it's time that for the next several decades, maybe China, US, EU, and Japan and all those countries could work together for the infrastructure revolution that has really transformed for China. Also China has built the AIIB, and the US was also invited but somehow, they didn't join. Now, the AIIB has 104 country members, including almost all the European countries, just excluding Japan and the US. I hope that we could upgrade AIB to GIB, to a global infrastructure investment bank, and let the US, China and EU work together. Thank you for opening our minds on that.

So, after having the first round of discussion, allow me to come back to other distinguished panelists. Adam, I know the Peterson Institute has been studying TPP for so many years. So when Trump withdraw from TPP, CCG is the first think tank in China to propose that China should join TPP. We issued several reports and have been constantly advocating for it. And finally, Premier Li mentioned at last year’s National People's Congress that China's interested in joining CPTPP and President Xi announced at APEC summit that China will positively consider joining CPTPP. The Minister of Commerce has now put the CPTPP agreement on the Ministry of Commerce’s website to show the standards for all these issues. So Peterson is a great think tank on economic issues and you have many scholars who have been studying TPP for many years. So what's your take on these issues? Because TPP involves data flow, as Minister Zhu said, which used to be an obstacle, as well as IPR protection, environment protection, labor standards, SOE reform, comparative neutrality. Like John said, we should have two sides talk about that. The US designed the TPP, and why doesn't it come back to talk about those urgent issues? And US and China can push the reforms in the WTO by regional integration experiments that we already have on RCEP, CPTPP and others as well. So Adam, your take, please. 

Plurilateral trade agreements should be based on quality and standards

Adam S. Posen: Thank you, Henry. Let me pick up on what you and my friend Guangyao were saying about reform. The most important thing about CPTPP, especially as it has evolved since President Trump withdrew, is that it is an incredibly high standard agreement and it is an incredibly open agreement. In other words, when we, Peterson Institute, as you say, has been proudly doing work on economic agreements on free trade areas, particularly in Asia, for decades. And long ago, there was a debate between my predecessor, Fred Bergsten and the distinguished Columbia Economist Jagdish Bhagwati about trade blocs - stumbling blocks versus building blocks. And the basic message that we took, that I have altered slightly, is that you can have regional agreements be useful if they genuinely open things up and if they genuinely encourage reform and high standards in the countries that are members and if you are not biasing them by political factors. So I'm going to go out on an unusual limb here and say, for the time being, it would be good if CPTPP continues to succeed and grow without either China or the US being involved. I think in the current context, where a number of people in both Chinese and American governments are looking to line up various developing countries around the world, including but not solely East and South Asia, as being on one side or the other. And this relates to what professor Thornton was saying about the Belt and Road Initiative and how that goes. I think it was very good to have a live, high-standard, open entity that is neither Chinese nor the US, and that offers a way forward without asking people to commit to one side or another in some sense. And we can see this in the extension of CPTPP, potentially to the UK and to Korea. In both cases, this would send an important message to the rest of the world that you can have high standard Commerce on the issues you raised, including labor rights, environmental standards, data privacy, state subsidies and so on, all the things that the Obama administration and former USTR Mike Froman, but also importantly, the Japanese, Singaporean, Australian, New Zealand governments argued for. And have that be a standard that then puts pressure on both the US and China to raise their own games. And this goes with something I wrote almost a year ago, where I encouraged the Australians and the Japanese to pursue what I call principled plurilateralism, that is that they should be willing to engage in these plurilateral deals, but they have to be based on quality and standards. I think this will disappoint some people in both Beijing and Washington, particularly in Washington, where the arguments for CPTPP initially and the claims to bring it back to Washington are all about aligning the trading system against China or having a bloc that puts pressure on China but by pressure on China by exclusion. I also think that it's preferable to go this route by having an independent strong CPTPP that's not dominated by China or US because, frankly, we know that once trade agreements are made, you'd have issues of enforcement, and China and the US would probably make as conditions of their accession changes to the TPP or changes to enforce it. It will not be entirely reliable. We've seen this in the way the US is repeatedly renegotiated USMCA and US-Korea trade agreement. We've seen this in other ways in China’s deals. Whereas if we keep it open to everyone but China and the US without saying so, CPTPP is big enough that anybody who accedes, including South Korea or the UK, would have to be an accession country. Now, my friend Guangyao mentions the importance of multilateral institutions and obviously, the WTO is lurking in the background here. I think there are completely ways of keeping this compatible with the WTO but the kind of plurilateral deals are less of the willing are necessary to keep moving reform forward, we cannot have India and Brazil blocking all progress of trade. I should put in one footnote, thank you for your indulgence. This is my own view - we are a center of work on CPTPP and on trade integration in Asia. My colleague Jeff Schott recently wrote telling Japan that they need to get the US back into CPTPP. So the above is not as a Peterson Institute’s position, this is my own. The final point I would make is, in light of Guangyao’s and Stape’s rightly raising, that the pandemic response is far more important than any other things that we talked about. I chose not to talk about that because I was trying to be responsive directly to your question and I don't want to give the impression that I've changed my mind since you and I spoke a year and a half ago, it is still the critical thing. But what that means it is, as seen in the latest IMF release, which came out overnight that the world is incredibly divided with the poor countries being excluded from vaccine distribution, and likely to have very long lasting suffering economically and socially as you or John said rightly this isn't just about public health this has much more long lasting implications. I think a China and or US included CPTPP would reinforce the message to the rich countries or the countries already integrated can get on with their business and ignore what happens in the rest of the world. And that message is already coming through much strongly on the vaccination and aid front. So at this time, I would much rather see China and the US put their efforts into being helpful, there, than into CPTPP. I want Japan, Australia, Singapore, Canada and all the members of CPTPP to move forward, but not China and the US.

 Wang Huiyao: You mean, we should let CPTPP run for a while and experiment more. But what about the WTO? The WTO ministerial conference is coming up this year, and we have the new director general being approved by the US and has been running office already for a few months. So what do you think of the prospect of the WTO reform? We have those plurilateral meetings on digital economy, t on liberal investment facilitation as well. It seems that now as G7 and OECD proposed this corporate minimum tax internationally, to which China is one of the 130 countries who agreed. So how can the G20 really turn their efforts to fighting the pandemic and addressing those economic issues?   

Adam S. Posen: On the WTO, with so many things to rhetoric has outstripped the reality, all the talk about WTO reform and WTO dysfunction, especially in Washington, is exaggerated and unjustified. I think the frustrations with the large-scale trade rounds are real and there are some tweaks to be had to the WTO body. But the new director general Ngozi Okonjo-Iweala, who I admire greatly, has come in with the right attitude, which is don't try to fix everything at once, don't get caught up in procedures, try to get deliverables and show the world that the WTO can deliver things that matter to people. And so she is rightly focusing on trade issues, having to deal with the pandemic, with fisheries, with direct limited appellate body reforms. I think this is the right way to go. There are too many things to be done, what's important is that the WTO leadership gets the membership in time for the end of this year's ministerial conference to make meaningful progress on two or three of these issues, one of which is pandemic. Otherwise it doesn't matter which of the issues, you just need to demonstrate that the WTO can do something useful. And I think if we go off onto too many directions at once, it's not going to be helpful.  

 On minimum cooperate tax, it was a wonderful thing to see China as well as other major economies agree on this. I think it is critically important for the legitimacy of taxation in all societies as well as providing revenues on a stable basis for all societies, that we get the international corporations, notably but not solely the US digital giants, under this regime and not having base erosion and profit shifting. Again Minister Zhu was involved in the first rounds of those discussions and I praise him and I praise Secretary Yellen for leading us. My fear speaking, frankly, is that this may be a League of Nations repeat moment, John warned us against excessive analogy, so I hope you'll forgive me. But you have a progressive democrat that in this case the American leadership that gets agreement on something at the global level and comes back and finds an isolationist Republican US Senate prevents it from being enacted, and then the world has to go forward somehow, without the US participating. I think this could be disastrous if the US Congress does not take up what the US Treasury Secretary rightly negotiated on behalf of the US in the world. The second point is that it's not perfect, going back to the themes we've all hit. This was an OECD agreement because that's where the multinationals are and that's where the expertise was and it makes sense. But as my colleagues Gary Hufbauer and Simeon Djankov have written for the Peterson Institute there are a lot of small countries in the world that are not purely tax havens that are not Ireland or the Netherlands that are going to be affected by this development. Again, it's wonderful to see China and US willing to cooperate on something substantive but there has to be some engagement of the needs of developing countries and small countries, again, not the tax havens that have made billions over the years but other countries. So it's not a done deal but my biggest fear as I said, is the US creating, not as important as the League of Nations, but in another League of Nations moment, doing the right thing internationally and failing to deliver domestically to keep up with it. 

Wang Huiyao: Thank you Adam, for your very explanatory answers. It's good to understand both sides. I think particularly China’s accepting the G20 proposal on global minimum tax is really a good sign. If we do sit down and really analyze those international and global economic situations, we can collaborate.

Ambassador Roy - you have been a seasoned diplomat for a long time. You were in China for so many years, even during your childhood time, and I still vividly remember a few years back we went to Dun Huang together and then when we went to the US, you accopanied us  to visit Seattle. It’s really good hearing of your wisdom. US and China, after four decades of engagement, there is a saying now in the USA – “China doesn't converge with us and has not become one of us.’ But you see, China has 5,000 years of history, you probably know very well, its civilization was never really interrupted that often. And China really is working on its own development path. I attended the previous US ambassador Terry Branstad’s farewell reception in Beijing and he actually said that the success of China development attributes to three factors, first one is hard work, diligence, he felt that people are working very hard here; second is education - Chinese family attach great importance to education; the third is the family value - China really respect seniors and authorities and that's how the Chinese system went. So you'll see that China has its own unique system and even fighting covid virus with that system seems to have some advantage. It doesn't have to exactly converge with the USA.  Because if China can lift 800 million people out of poverty, if China can contribute over a third of global GDP growth, as time goes on, we all don't have to get into the Thucydides’ Trap. I'm talking to Graham Allison a few months ago and he doesn't agree with falling into the Thucydides’ Trap as well. Joseph Nye also said we should have a longer horizon - maybe looking at 2035, during one of our conversations. So given your lifetime experience on China, what's your take on the future development between China and the US, from the perspective of a former American ambassador and a very experienced China hand?

The US and China should strike a balance and achieve a new equilibrium

J. Stapleton Roy: Thank you. I think that is the core issue in the bilateral relationship. I referred in my opening remarks to the fact that the United States was having difficulty adjusting to the need for a new equilibrium in East Asia. I think that's a real problem for us. Because if you read American speeches and writings on the subject, we still have many people who think that dominance in air and naval power for example, is necessary for the United States. And you can't have a new equilibrium if either China or the United States are setting dominance as a goal because the other side will not accept it. Therefore if we're going to have a dialogue with China, we have to begin addressing the question of how do we strike a military balance, in which each country feels it can meet its defense needs? For the United States, that includes the defense needs of our allies, but is not so powerful that we appear to have the capability to engage in aggression against the other side. We are not yet there, and we are not yet mentally prepared to try to undertake that task, and it is absolutely necessary. Because you have to have a balance of power in East Asia, otherwise we're going to be continually in strategic rival with each other. That's one reason why I think it is absolutely wrong to think that our dominant factor has to be strategic rivalry. Because strategic rivalry always focuses on the military component. And that ends up generating an endless arms race in which resources are diverted away from economic development into military development. Now here I think the United States has to stop thinking in terms of dominance, and I think the Biden administration was wrong by introducing this concept of dealing with China from a position of strength. Anybody would understand that China would never accept that as a basis for the United States to deal with China, and the same term cropped up during the Cold War when I worked on Soviet affairs, the Soviets were very sensitive to the idea of the United States dealing with them from a position of strength. But China is making an enormous mistake by not defining its defense needs strictly in terms of China's defense requirements. But now China has linked its defense needs to its international status as a great power. At the 18th Party Congress in 2012. The first part of the military portion of the work report talked about China needing a powerful military commensurate with its international standing and appropriate for its defense and development needs. And at the 19th Party Congress, China talks about requiring a world-class military power. Well, if China has a world-class military power when it has no global military responsibilities, China has no allies beyond its immediate periphery in which it has the size its military to meet those requirements, when Americans look at China, we don't see any ceiling in terms of where China wants to develop its military power. And in my opinion. China has to rethink how it is talking about its military requirements. Because if every country tries to develop military capables in terms of their international status. What size of military does Japan need? What size of military does India need, et cetera? It's the wrong way of looking at the issue. Military requirement should be linked to your defense requirement, and the United States and China need to be thinking in terms of, as President Xi himself has said, “a pacific in which China and United States can both function together.” He said the Pacific is large enough for both China and the United States. And Xi Jinping, in his earlier speeches, has specifically referred to the defense dilemma, which is if China has absolute security, then its neighbors have no security. He's used that exact language in his speeches, so he understands the issue, that there has to be a limit on China's defense capabilities or its neighbors will all lack of security. And this is an area where United States in China, sooner or later, and the sooner the better, need to start engaging in a dialogue to see if there is a possibility for a strategic equilibrium in East Asian that is compatible with the national interests of both sides. And that means that national interests also have to be defined in a way that doesn't exclude that possibility.

So I think there is enormous scope for China and the United States to stop looking at the world in terms of their own domestic driving factors. And I understand that they have to look at the external circumstances in the world in an objective way and then formulate foreign policies that are compatible with the international circumstances in which they have to operate and gain the domestic support for that approach. The United States is not yet doing that, for example, if we look at East Asia, where all of the countries of East Asia have more trade with China than with the United States. It is clear that if we ask Asian countries to choose between China and the United States, they are not going to want to do so because they have very important interests with China. So we have to understand that and our foreign policy approach to China and the way we talk about China must not be put in ways that require countries to choose between the good United States with our democratic system and the bad China with its authoritarian system - that's the wrong way to formulate our foreign policy concepts. And China, as I've already illustrated in my judgment, is making the same mistake as it is talking about needing global military power because of its status as a great power. Going back to the 19th century, when China talked about the need for China to regain wealth and power, the power was so would no longer be the subject of aggression by stronger countries, it was a defensive concept, not an aggressive concept. And that has been lost now because China is talking about how powerful military is needed because of its international standing. So this is an area where I think both of our countries need to do a lot more serious things. 

Wang Huiyao: Ok, thank you, Ambassador Roy, you explained really well that most countries should not really use ideology or the old mentality to measure the 21^st-century reality. We need a new narrative. You are absolutely right that we should not be seeking dominance on each other. China also said many times that historically China has never colonized any place or sent soldier anywhere. In our observation, what China is actually doing is that when we build up military, China is really just expanding its military from a defensive purpose. Asthe US exercises launched in the South China Sea or Taiwan Strait - China is really just catching up with its defense. Note one fact that the US military budget is equal to that of the next ten countries combined, whereas China’s total length of high-speed railway is equal to that of the next ten countries combined. But your idea is well taken, we should really be seeking for peace and understanding. I agree with you that we need more exchanges to talk through those issues to get out of the suspicions and mistrust.  Now Minister Zhu, I remember in 2016 at the Hangzhou G20, you were the coordinator for the G20 from the Ministry of Finance. I watched on CCTV then that you were doing an interview next to the West Lake in Hangzhou, you were saying that the BIT was almost closed between China and the US. Another story I heard from you is that when the 2008 financial crisis happened, you got the call from the US Treasury office talking about how China and the US could work together to really fight with this financial crisis. China immediately launched the 4-trillion RMD revival plan. The US and China have really worked together through the crisis. So what do you think about current crisis of the pandemic? How we can really work together, please give us some view, as you have a lot of experience working with US, Minister Zhu.  

Zhu Guangyao: Before I answer your question, I just want to respond to ambassador Roy’s idea regarding military strategy and military intention. To be honest, in the modern history, China suffered a lot from foreign invasions and the Chinese people deeply understand that, so it’s the peoples willingness that China becomes a stronger country. However, for strategy and the real situation, when China talks about its core interest, that's always three points: 1.Sovereignty, 2. territory integrity, 3.developing rights. We hope with that, China can really become a modernized socialist country, a united country and a country which can improve people's living standards. I think for those of us, we can have very frank communication to deepen understanding. So I think it has become very important for China and the US to real understand each other's intentions, particularly at this time. Now regarding the 2016 G20 meeting, and BIT between China and the US - yes, that's indeed under strong leadership of president Xi Jinping and president Obama. Before G20 Hangzhou Summit, Chinese team and the US team worked very hard. At that time, the leader of the US team, Michael Froman, the Trade Representative, did a lot of work to keep very close communication with Chinese team, nearly every day, maybe even three or four times a day. Both sides did very hard work under the strong leadership of the two presidents. We can say openly to the Chinese and foreign media that at that time, the treaty between China and the US - the BIT, was nearly 90% complete. We also understand some key challenges - digital economy, particularly, data privacy, data across borders need to keep moving and we just need more hard work to be followed. 

Unfortunately, after that, everybody knows that the US administration changed and even abandoned TPP, which delayed the continued negotiations. Another case was in 2008. I remember that during the international financial crisis, in October 2008, in a very early morning – 3 am, I received a phone call from my counterpart in US Treasury. She immediately arranged a meeting between the secretary Treasury Hank Paulson and his Chinese counterpart to talk about possible upgrade of the G20 format from finance minister under central bank governor to the leaders. I think it was 10 am in Beijing time and we had a 3 or 4-hour phone call. It really forged the path for the G20 summit in November in Washington DC, chaired by President Bush and joined by Chinese President Hu. It was a very successful meeting which paved the way for the next G20 meeting in London to build up a real firewall for IMF - one trillion US dollars ware gathered through that meeting for a strong deal to face the challenge of international financial crisis. That really demonstrated how strong China-US cooperation is and how positive the impact of their cooperation on the world is. 

Wang Huiyao: Thank you, Minister Zhu. We should draw lessons from this kind of cooperation we had in fighting the global financial crisis about 13 years ago. We can really be using that spirit to fight the current pandemic as well. You have provided a very good example of how useful it is to work together for the sake of the global prosperity.  

Now my staff is telling me there's about half a million people watching us online currently in China and elsewhere globally. We had a very good discussion. At the end of this second of discussion, I'd like to ask John to comment. I know that you've been a professor at the Tsinghua University’s Economics and Management School for many years and you have taught a lot of Chinese students. You have been serving as an honorary chair of Brookings Institution for over a decade, and have been with the Asia Society in the US for several  years. You travel frequently. There's an issue about the students’ exchanges between China and US. I heard that the US Embassy is issuing 1,000 visas a day and by the end of summer, it is going to issue 200,000 visas for Chinese students going to the United States. But looking at the numbers, there's about 2 or 3% of refusal rate. So how do you think we can promote these people-to-people exchanges, business exchange, tourism, cultural exchange and of course, think tanks exchanges during this special time? How we can really work out this travel ban, as we are probably going to have to live with this virus for a long time? If we don't really have international mobility, we may suffer. I'd like to hear from you, John, thanks.

 Ties between the commons of US and China are central to forward progress

John Thornton: Thank you Henry, I can be succinct on this point. To state obvious, the ties between American and Chinese people, to me, are absolutely essential to getting the relationship where it needs to be. I'm hopeful that the younger people who have a vested interest in the long-term future of their countries in the world will be forces for good in a relationship. In one way of thinking about China, for example, you think about roughly 400 million millennials, how they have grown up and how they think about the future. The Chinese leadership needs to be responsive to that group. And the same thing is true in the United States. The ties between those groups are absolutely central to forward progress and I'm pleased to see that the Biden administration - this is one area where they are moving quickly - to rectify the policy of the previous administration, to open back up again, to people-to-people exchange. We all know that the ties are deep and broad, they are state-to-state, universities-to-universities, NGOs-to-NGOs, individuals-to-individuals. It cannot be overstated that the sort of societal trust that needs to be built, was being built and can be built. This is probably the single best insurance policy against untoward policy on the part of the leadership. I think in some ways, the wisdom or common sense of ordinary people can act as a kind of a break against the occasional unwise policies of elites.

 Wang Huiyao: Good, we’ve had a very good discussion. Because the webinar is on air to the public, we received some questions. I just want to cite a few of them. During this last round of concluding remarks, you could also address some of those questions that we collected  from the Chinese media.  

China Daily: The US administration made the rounds pushing "lab leak" hypothesis while actually there were cases not just in China but elsewhere. Should we pursue these?

China News Service: This year marks the 50th anniversary of Dr. Kissinger's visit to China. At the July 9 commemoration, Dr. Kissinger mentioned that the U.S.-China relationship is more critical today than it was in 1971. So, is there any chance that the two sides will somehow “break the ice” again 50 years later? And on the occasion of the 50th anniversary, what is your vision for the future development of China-Us relations?

Red Star News: On July 28, Qin Gang, the new Chinese ambassador to the United States, arrived in the United States and delivered a speech. He mentioned that 50 years ago, Dr. Kissinger visited China secretly and knocked on the door of China. The door to Sino-US relations has been opened, and it will not be closed. What do you think of Qin Gang's arrival? 

Beijing News: on the eve of China’s New Year, president Xi Jinping and the president Biden had a phone call, and also the US and China had a high level talk in Alaska, and recently in Tianjin. How would you comment on the future government to government exchanges between China and the US? What about the prospect of the President Xi and the President Biden’s meeting at the G20 Summit?

During our final round of concluding remarks, maybe you can pick up the question you want to address, and add any further thoughts on our theme - balanced competition and cooperation. As Secretary Blinken said, competition, even fierce competition, cooperation and confrontation - probably we don't need the confrontation. So what's your take? Maybe we'll start with Adam again.

 Adam S. Posen: It's been such a rich discussion, and you gave me plenty opportunities to speak. All I would say is that as we're trying to balance competition and cooperation, the key point for both countries, or at least both economies is to allow for some openness and allow the businesses and people in the scholars to cooperate, even if the governments choose to compete. We know from history, including the McCarthy era and the parts of the Cold War in the US that when societies closed down, they create their own corruption and their own abuse of power as well as having obviously economic and human costs. So I think this is where the think tanks to the extent that we are allowed to do so have to be out there reminding people that even if the top government officials in Washington and Beijing want to emphasize the competition that usually gets distorted into abuse of power internally in those countries and we should be calling people out on that. 

Wang Huiyao: Good, Ambassador Roy? 

J. Stapleton Roy: I think the visit to Beijing by Dr. Kissinger 50 years ago is well worth commemorating. Because it illustrated that when national interest is served by cooperation, differences in political and social systems does not have to block that cooperation. The problem with differences in systems, which has become a big issue in the United States in terms of thinking about China, is that at some level, it does influence cooperation, but it shouldn't block it, if it's in the national interest to cooperate. The problem is illustrated by our ability to cooperate with Joseph Stalin, when we were opposing Hitler. But when Hitler had been defeated, our ability to cooperate with the Soviet Union broke down. So, in some ways that's the type of issue we face with China. There are forces in the United States that want to block our cooperation with China because of the differences in our political systems and we need to rethink about the Nixon and Kissinger opening to China at a time when there couldn't have been bigger differences between our domestic systems. China was in the height of the Cultural Revolution when that occurred and yet we set that aside because of the importance of cooperating with China against the Soviet threat. And in my judgment, if we look at what the world requires as our responsibilities as great nations, it is clear to me that the lesson of the Kissinger’s visit to China is, when it is necessary to have cooperation between China and the United States. We should not let the differences in our systems block that type of cooperation. So I think it's a very important visit. Historically, it created the possibilities for the United States and China to create enormous common interests and those common interests in my judgment continue and we have to find ways to cooperate in promoting them. 

Wang Huiyao: Thank you, Ambassador Roy. So Minister Zhu - your concluding remarks. 

Zhu Guangyao: Thank you Huiyao. Today’s situation and the relationship between China and the US, is something different from that of 50 years ago. One very key point is that the Chinese and American economy are so closely connected. Not every year do two countries have more than 500 billion trade, and the investment and global governance coordination between two countries are closely connected. However, we also face new challenges with domestic opinions such as populism in both America and China. This time, we really need strong leadership by two presidents. I think that we must follow the spirit that President Xi and President Biden embraced during their conversation at the Eve of Chinese New Year. Just as Ambassador Roy said, we should expand our common ground and make our cooperation more broad. Also as Adam said, two nations’ social society, including the academic side and people-to-people exchange must be enhanced to solid our people’s base and to make our two great countries understand each other and cooperate more. Thank you. 

Wang Huiyao: Thank you, Minister. Zhu. Now we will have the final words from John, we’d really appreciate your final comments.

The US and China are responsible to lead the world to a safer and better place

John  Thornton: There's so much to say, I'll try to be very succinct. I was admiring the efforts on the part of Jeff Bezos, Richard Branson, Elon Musk and others to go to space. And if you want to use one's imagination being on these spaceships and looking down on the planet, when you're up there looking down, there's no difference between people living in China, people living in the United States, and people living in Africa. I think that we need to hold ourselves to a higher standard and be more conscious of the fact that we live on one planet and the issues are only going to get more complicated and more complex as we go forward. The United States and China, which are the two leading countries now and will be for a very long time, they have a very big burden. The burden is they are responsible to lead the world to a safer and better place. Therefore, when we talk about competition and cooperation, I can understand and be comfortable with both of those ideas between the countries. But when we add the idea of confrontation, to me that's absolutely out of the question, and we shouldn't even be considering that as a concept. The world simply can't take it. We shouldn't waste any time on it. As I said in my earlier comments, should the leading countries of the world really be spending their time arguing or trying to do each other down, or should they be spending their time trying to get the world to a better place? To me the answer is very obvious. And the sooner we recognize that, the better, and we have a right to demand of our leaders that they get the big things right, as Nixon, Mao, Kissinger, and Zhou Enlai did 50 years ago. Thank you. 

Wang Huiyao: Thank you, John. You talked about all the recent space trips and looking down to the Earth from outer space to see that we are all really one. I remember the 2008 Beijing Olympics’ slogan then was One World, One Dream. This year, the Olympic in Tokyo actually enriches the motto of the Olympic – “Faster, Higher, Stronger“ by adding  “Together”. So I think it's really great that we are adding a new dimension. So tonight the dialogue between the US and China think tanks at our 7th Annual CCG Forum was a vivid example. I think you all had shed a very good light, proposed very good insights, recommendations and suggestions and it’s really great for communication. We’ve had over half a million viewers and we covered many grounds, from economic, social, international relations, geo-politics. I totally agree with what John just said at the last minute that we can compete and cooperate, but not confront. Let's have the Olympic kind of peaceful competition. But we should have a lot of cooperation too, like climate change, minimum tax, nuclear issues, North Korea, Iran, Afghanistan – which is another really urgent issue now. I think that the Tianjin high-level meeting has covered all these grounds, and identified a number of areas to collaborate. We have also covered how we can revive the world by facilitating the movement of the people, like a global vaccine passport, or vaccines that can quickly be sent out  the developing countries.

So I really appreciate all your time and I also look forward to continuing our conversation like we did with the Wilson Center in the past and we hope to do that with Peterson Institute and of course, Brookings and Asia Society. I'm having another two dialogues with Asia society’s Vice President, Wendy Cutler and Ex-WTO Director General Pascal Lamy , and Ex-Assistant Deputy Secretary of State Susan Thornton anf Asia Society’s Hong Kong Chair, Ronnie Chan for the last two rounds of online webnairs. On behalf of CCG,  I want to thank Adam Posen, President of the Peterson Institute, Stape Roy, Founding Director of the Kissinger Institute of the Wilson Center. And of course, John Thornton, the Honorary Chair of the Brookings and the Co-Chair of Asia Society, and of course, my fellow counselor to the State Council Counsellors’ Office, Minister Zhu Guangyao. And we thank all the audience and we look forward to the future dialogues. So once again, thank all of you, thank our viewers and we appreciate our speakers’ time. Thank you all very much. 

Note: The above text is the output of transcribing from an audio recording. It is posted as a reference for the discussion.

CCG Books

● Published by Springer 

● Edited by Wang Huiyao, President and Miao Lu, Vice President, Center for China and Globalization(CCG), Beijing, China 

More Information

The internationalization of Chinese enterprises is one of the most notable aspects of economic globalization in the 21st century. Despite the 2008 financial crisis and weak global outbound investment, under the “go global“ initiative, Chinese outbound investment has gone from strength to strength, while also diversifying in terms of investment modalities, destinations, and industries. However, growing anti-globalization sentiment in some countries has also created new challenges for Chinese firms expanding internationally.

Drawing on nearly 3000 data samples, using both quantitative and qualitative research methods, this book presents unique insights into the features and patterns of Chinese enterprises’ globalization. The analysis provides a useful reference for enterprises that have already gone global and those that plan to. In particular, this book investigates challenges confronted by Chinese companies when doing business in foreign countries. It summarizes research covering three angles, namely: the current situation, causation analysis and corresponding solutions, and recommendations for firms, government agencies and other institutions.

This book provides a comprehensive overview to help readers to grasp the broad picture of the international expansion of Chinese enterprises. It has important reference value for enterprises to help devise foreign investment strategy, seize opportunities, and navigate challenges in the course of globalization.

● Links：

https://www.springer.com/cn/book/9789811546457

● Published by Edward Elgar 

● Edited by Wang Huiyao, President and Miao Lu, Vice President, Center for China and Globalization(CCG), Beijing, China 

More Information

An excellent guide for understanding the trends, challenges and opportunities facing China through globalization, this Handbook answers the pertinent questions regarding the globalization process and China’s influence on the world.

With contributions from leading experts and international researchers, each chapter covers key topics regarding China’s participation in globalization, including: China’s new role in global economic governance; outward direct investment; China’s soft power and the implications for foreign relations; global migration, diaspora and talent. An enriching range of case studies and extensive empirical research are used to explore the successes and failures of globalization in China, and to discuss the dilemmas facing decision makers in today’s globalized world. A major contribution to the field, this Handbook offers valuable insights to China’s often misunderstood globalization process.

An essential reference for academics and researchers looking for a go-to empirical resource, this Handbook provides scholars of economics, politics and East Asian studies with an exemplary selection of contemporary research on China and globalization.

● Links：

https://www.e-elgar.com/shop/handbook-on-china-and-globalization

● Published by Springer

● Authors: Wang Huiyao, President and Miao Lu, Vice President, Center for China and Globalization(CCG), Beijing, China 

The first effort to address the gap regarding higher-end talent within the scholarly work on internal labor migration in China

Provides an essential overview of the major milestones in China’s talents attraction policies, as well as several recommendations to help further improve those policies

Investigates corresponding policies in Germany, Japan, and Singapore to serve as a basis for comparison

Provides a snapshot of first-hand reference material for relevant stakeholders involved in cooperation with China

More Information

This book offers the most comprehensive, up-to-date assessment of China’s domestic and international migration. Restructuring economic development requires large numbers of educated and skilled talents, but this effort comes at a time when the size of China’s domestic workforce is shrinking. In response, both national and regional governments in China have been keen to encourage overseas Chinese talents and professionals to return to the country. Meanwhile, the Chinese government has initiated a number of policies to attract international highly-skilled talents and enhance the country’s competitiveness, and some Chinese policies have started attracting foreign talents, who are coming to the country to work, and even to stay. Since Chinese policies, mechanisms, and administration efforts to attract and retain skilled domestic or overseas talents are helping to reshape China’s economy and are significantly affecting the cooperation on migration and talent mobility, these aspects, in addition to being of scholarly and research interest, hold considerable commercial potential.

● Links：

https://www.springer.com/gp/book/9789811362552#aboutBook

Other CCG News: