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Petraeus Discusses Foreign Relations

The retired four-star general and former CIA director, David Petraeus addressed the issues of economic challenges facing China and the U.S.-China relationship during a roundtable discussion at USC Price.

April 3, 2014

Originally published by USC News on April 3, 2014. Written by Matthew Kredell.

U.S. Army generals never unlearn how to pack the most possible tasks into a day. David Petraeus navigated an array of meetings, class visits and speeches during his most recent tour of the university since being named Judge Widney Professor with a joint appointment at the USC Price School of Public Policy last fall.

Over the course of four full days beginning March 25, the retired four-star general and former CIA director impressed graduate students with his thorough knowledge of the issues affecting Mexico and China, and spoke about leadership to alums of USC’s Price Executive Master of Leadership program.

He also had individual meetings with USC President C. L. Max Nikias and USC Price Dean Jack H. Knott, as well as dinner with leadership from the USC Student Veterans Association. He spoke with Master of Public Policy students on the role women play in the military, and held a Q&A session with undergraduates. And he was the guest of honor at a dinner hosted by Nikias and Knott that raised more than $128,000 for scholarships for veterans and ROTC cadets at USC.

In addition to those activities, he also met with students, faculty and representatives from the USC Dornsife College of Letters, Arts and Sciences, the USC Marshall School of Business, the USC Gould School of Law and the USC School of Social Work. And he participated in the annual ROTC Trojan Games on his final morning, where he withstood the challenges of several cadets and ROTC cadre members in various physical endeavors.

The first event during Petraeus’ visit was a USC Price roundtable discussion for students on the economic challenges facing China and the current state of China’s relations with the United States. He joined USC Price Professor and Director of International Initiatives Eric Heikkila; Dornsife faculty Stanley Rosen and Guofo Tan; and moderator Clayton Dube, executive director of the USC U.S.-China Institute.

China’s challenges

China is in the process of implementing comprehensive reforms endorsed at the third plenum of the 18th Communist Party of China last year.

Petraeus painted a picture of a China that is experiencing slower economic growth than the extraordinary gains over the past decade. Nonetheless, he noted that despite rising labor costs, diminishing returns on people coming from rural areas to cities and the need to introduce more market competition into the state-owned enterprises, China will still account for one-quarter to one-third of the growth in the world in the next several years.

“The number of challenges I think is quite substantial, but China’s leaders have so far shown themselves to be up to the tasks ahead,” Petraeus observed.

“Having Gen. Petraeus here to address the issues of the U.S.-China relationship and the general movement of China is hugely important, especially to the Price community,” said Heidi Greenhalgh, a second-year Master of Public Policy student. “From Los Angeles, we’re on the fringe of the Pacific Rim, so relationships with China and China’s growth is going to be crucial long term to the development of our region and our studies.”

Economic reforms

Mexico, with 16 constitutional amendments in a single year, is also going through unprecedented changes. Joining Petraeus in a discussion on Mexico were Carlos Sada, consul general of Mexico in Los Angeles; Roberto Suro, director of the USC Price Tomas Rivera Policy Institute; and Pamela Starr, director of the U.S.-Mexico Network at USC Dornsife.

Economic reforms include ending the government monopoly over the energy sector, promoting competitiveness in the area of telecommunications, tax increases to fund social spending and more rigorous standards for teachers.

“I’m really captivated by Mexico,” Petraeus said. “I think the potential there is extraordinary, but it has some extraordinary challenges as well.”

Mexico already is the No. 2 trading partner of the United States, behind only Canada, and is now the No. 4 automaker in the world. However, 52 percent of the population is below the national poverty line, and it will take years for the reforms to be fully implemented and their impact to be shown.

“The biggest determinant of Mexico’s growth this year is not going to be all these reforms,” Petraeus cautioned, “it’s going to be how the U.S. economy does. The electorate expects Mexico to have its own destiny, yet it’s so tied to the U.S. economy that if we don’t pick it up a bit, they’re just not going to achieve all that they would like, either.”

Immigration remains the most pressing issue between the countries. Suro indicated that one in 10 people born in Mexico now live in the United States, and that one in 10 Mexicans in America was forcibly removed from 2009 through 2012.

Policy questions abound

“One of the questions I ask Mexican audiences is, ‘At what point does Mexico say that it is in the business of exporting people?’ ” Suro said. “There are all kinds of policy questions that can be addressed if you say this is really something that’s happening.

“Right now, the two governments simply refuse to have policy about the fact that there are 11.5 million Mexicans living in the United States,” he added. “There’s no constructive effort to say, ‘What’s the win-win here? What do we get out of it, what do you get out of it and how do we do this constructively?’ ”

Petraeus also took the time to speak with alumni of the Executive Master of Leadership program and the Southern California Leadership Network about his keys to leadership and the elastic approach he used in providing direction depending on the situation.

“General Petraeus’ comments on strategic leadership were right on target with material we discuss in the Executive Master of Leadership program,” said Professor Robert Denhardt, director of leadership programs at USC Price. “His emphasis on the importance of ‘big ideas’ rather than ‘vision’ underlines the importance of communicating to followers not only what we intend to do, but why.”