Happy Lunar New Year from the USC US-China Institute!
U.S. Ambassador Clark T. Randt, Jr. on U.S.-China relations, USC Herbert G. Klein Lecture, April 21, 2008
I'm delighted to be here with you today at the University of Southern California's United States-China Institute to discuss what, not surprisingly, I believe and also the president believes is the most important bilateral relationship in the world. This is the relationship between the United States and the People's Republic of China.
I'm particularly delighted and honored to have been invited today as a speaker in the Herb Klein Lecture Series. As you all know, Herb has not only made huge contributions to the University of Southern California, but also to United States-China relations. If it weren't for President Nixon, Dr. Kissinger and Herb, and others in the Nixon administration, I wouldn't have this, the best job in the United States government. So thank you, Herb.
It was President Nixon who wrote in his famous 1967 Foreign Affairs article that taking the long view, we simply cannot afford to leave China forever outside the family of nations, there to nurture its fantasies, cherish its hates and threaten its neighbors. From this, at the time astonishing call for strategic engagement with communist China from a leading anti-communist, less than 40 years have passed to our current recognition of the important interests in not only peace and stability and prosperity for our peoples and our nations, but global health, climate change, international energy security to name but a few that we share with China. This period has witnessed one of the most significant and powerful events in our lifetime, an event that touches everybody in this room, the emergence of China on the world stage.
For many years, China watchers had to spend a great deal of energy trying to explain to Americans why they should care about China. Now I think most Americans are well aware that China has and will continue to have a tremendous impact on our lives in the coming century; on the prices we pay, how we deal with the common threats we face, and even with respect to the very air we breathe. At this point, I think it's important that we shouldn't forget how far China has come in a few short decades. My first trip to China was in 1974 and when I tried to practice my Chinese with people on the street, they would run from me. It wasn't their job to talk to foreigners. It might have been my Chinese was that bad, but they would actually flee from me. To buy staples such as cotton and rice, you needed ration coupons. It's a far cry from today, where China has, last year in fact, become the greatest consumer of luxury goods in the world. In fact on Wong Fu Jing, they just opened the Lamborghini dealership in central Beijing, a couple blocks from Tiananmen Square. So it is really remarkable and breathtaking.
President Bush has said that we seek a China that is stable and prosperous, a nation that respects the peace of its neighbors, and works to secure the freedom of its own people. His instructions to me are the same today as they were when I took office in 2001: we want a candid, constructive and cooperative relationship with the People's Republic of China. The fact is that we enjoy, as [Provost C.L. “Max”] Nikias said, a mature, complex, multifaceted relationship that embraces significant common strategic interests ,and at the same time, important differences; differences that can often present challenges to our bilateral relationship. Human rights and religious freedom, Taiwan, and our huge bilateral trade deficit are clearly prominent among these challenges.
Today, most citizens of the People's Republic of China enjoy a greater degree of freedom in their personal lives than ever before. But the Chinese government's fear of instability--remember, today's leadership mostly came of age during the cultural revolution--leads them to be intolerant of even peaceful dissent. This is not healthy for Chinese society and is detrimental to long term stability. As ambassador, no other issue has commanded more of my personal attention than human rights and religious freedom. The president always raises human rights and religious freedom when he meets with President Hu.
As Americans, we believe that some things such as democracy and the inalienability of human rights and the freedom to practice and express one's religious beliefs are universal. We respect China as a great nation, and the Chinese people as a great people with a long and rich history and culture. But a China that respects certain fundamental human rights, is open to all forms of religious thought, and that allows its citizens the freedom of spiritual expression will be an even greater and more respected China.
Human rights is not an abstract issue. Some examples of individual cases that I have personally repeatedly raised with Chinese officials include Chen Guangcheng. He's a blind legal activist, who exposed abortion abuses by family planning officials in Lin Yi County, Shandong province. After being physically abducted in Beijing by county officials in 2006, Mr. Chun was sentenced to over four years in prison following a trial fraught with irregularities. One of Chun's attorney's, Gao Zhisheng, has himself become a human rights case. Following a flawed trial in December, 2006, Mr. Gao was convicted of inciting subversion. Gao's three-year prison sentence was suspended, but he has not been heard from in recent months and his whereabouts are unknown. Zhang Rongliang is a Christian pastor who was detained in 2004 and remains in jail serving a seven-and-a-half year sentence for alleged passport fraud and illegal border crossing in connection with his travels to the United States and other countries to attend religious meetings. AIDS activist Hu Jia--you've been reading about him in the newspaper. And internet dissidents. We continue to raise Yang Zili, Shi Tao and Wang Xiaoning. Each has received lengthy sentences for posting articles advocating reform and democracy on the internet. Lastly, I continue to press for the release of a United States citizen, who has been jailed on questionable charges, and whom I have personally visited in Qingpu Prison outside of Shanghai. Jude Shao is an American businessman with a Stanford MBA. He was arrested in 1998 for alleged vat tax fraud and given a 16-year sentence. For vat tax fraud. He is now eligible for parole.
In this regard, I am pleased to report that the Chinese have recently agreed to restart our bilateral human rights dialogue at the end of this month after a long hiatus. In response to the unrest in Tibet, the Chinese government took the unfortunate step of locking down Tibetan regions and barring foreign journalists and diplomats. On March 26, President Bush spoke by phone with President Hu Jintao. The president encouraged China to engage in substantive dialogue with the Dalai Lama or his representatives, and to allow access to Tibetan regions for journalists and diplomats. Secretary Rice urged the Chinese authorities to exercise restraint and implored all sides to reject violence. I and my embassy colleagues have repeatedly called on the government of China to commence dialogue with the Dalai Lama or his representatives. The Chinese government has recently arranged for brief tightly controlled visits by small groups of journalists and diplomats.
But we see this as only a first step in the right direction. We continue to press the Chinese government on Tibet and important international issues such as Darfur and Burma. But we do not support calls for a boycott of the Olympics. As President Bush has said, the Olympic Games provide China with an opportunity to demonstrate a commitment to greater openness and tolerance. We urge China to put its best face forward and fulfill its Olympic bid commitments to increase access to information and expand freedom of the press. The Olympics is a sporting event, not a political event. As Secretary Rice has said, this is a big event for the Chinese people. And whatever one thinks of the regime, the Chinese people need to know that the United States and the American people support their emergence on the world scene.
While mainland China has been gearing up for the Olympics, Taiwan successfully held a free and fair election on March 22. I often say from the Chinese point of view, the three most important issues in the United States China relationship are Taiwan, Taiwan and Taiwan. The March 22 election demonstrated the strength of Taiwan's democratic system. the maintenance of peace and stability in the Taiwan Strait remains of profound importance to the United States. Taiwan's new president-elect, Ma Yin Jo, will take office on May 20. The election results provide a fresh opportunity for dialogue, and indeed the meeting between Chinese President Hu Jintao and Taiwan's vice-president-elect, Vincent Siew, at the Bo’ao Forum in Hainan on April 12 is the highest level contact between the two sides of the strait since 1949. Both sides agreed to take advantage of this historic opportunity and the new circumstances afforded by Ma's election to work toward the resumption of talks that have been suspended for nearly a decade.
Our policy towards Taiwan has been consistent over three decades and seven presidents. We have a One China policy based on the three joint communiqués and the Taiwan Relations Act. We do not support Taiwan independence and oppose unilateral actions by either side to change the status quo. Our consistent policy has resulted in 35 years of peace and prosperity in the region. Another challenge we face comes from our huge and expanding economic and trade relationship. China is our fastest growing significant export market, and last year became our third largest export market after Canada and Mexico. More Chinese are buying more American products than ever before, about $65 billion worth last year. Since 2001, we have more than tripled our exports to China. However, in 2007 our trade deficit with China also hit a new all-time record: $256 billion U.S. dollars. To put this in perspective, our trade deficit with China is now three times larger than our trade deficit with Japan. This record deficit combined with the sense that China is not playing fair particularly with respect to its commitments on market access and intellectual property rights, IPR protection, undermine support for continued economic cooperation in the United States for many of those skeptical about free trade at a time when China has become the face of globalization. I strongly believe that throwing up barriers to Chinese goods is not the answer.
As Treasury Secretary Hank Paulson recently said, neither China nor the United States can protect our way to further prosperity, rather we have pushed for further opening of China's markets, more effective enforcement of China's IPR laws and we've encouraged China to adopt a more flexible exchange rate regime. We have seen a notable and welcome change in China's exchange rate policy since last fall and we hope China will maintain that current pace. Since China abandoned its currency peg in July 2005, the renminbi, as of April 15 had appreciated 18.36 percent against the U.S. dollar. But we would like to see more. We would like to see a renminbi rate that reflects its free market value. A market-based exchange rate is, fundamentally, in China's interest because it will allow China's central bank to focus on financial stability and inflation rather than being forced to buy dollars to maintain the renminbi at an artificially low rate.
With respect to our market access and IPR concerns, the administration, led my ambassador Schwab, our trade representative, has initiated six WTO cases against China involving market access and IPR protection. With respect to the theft of intellectual property rights and DVD piracy, let me give you an example: the runaway success in China of the American television show, Prison Break. Prison Break is hugely popular in China. Sometimes I think I'm the only person in Beijing who's not seen it. But I have a good excuse, because it has never been shown on Chinese television. The show has become a hit entirely through pirated DVDs and illegal downloads. Chinese leaders do recognize that real IPR protection is in their own fundamental interest. Protecting IPR doesn't just enrich Apple and Time Warner, but it allows domestic brands like Haier and Hisense to make money at the design and marketing points of the value chain and not just in the low-margin manufacturing and assembly sectors. China's leaders understand that if, as they have set out in the 11th five-year plan, they want a creative economy, then they are going to have to have an effective system of intellectual property rights protection to protect the fruits of such creativity.
So far, I've concentrated on challenging bilateral issues like human rights, Taiwan and trade. If I were giving this speech ten years ago, my remarks could have ended here. But in my time as ambassador, our cooperation on regional and global security issues has increased in importance.
More and more, I find myself engaging Chinese officials on crises occurring in third countries, in regions oceans away from either of our capitals. First is the health of the global economy. China and the United States have shared strategic economic interests that go far beyond our bilateral trade. In recognition of this, Presidents Bush and Hu agreed in April 2006 to establish a strategic economic dialogue led by Secretary of the Treasury Paulson and Vice Premier Wang Qishan in their capacities as special presidential envoys, and bringing together top economic officials from both sides to develop long-term strategic solutions to shared economic challenges and to address immediate economic issues of pressing concern in order to promote not only our mutually beneficial economic relationship, but also to promote the continued stability, security and prosperity of the international economic system. This strategic economic dialogue is unprecedented and if imitation is the sincerest form of flattery, we should be pleased that so many other countries have demanded such dialogues with China. In the globalized independent world in which we find ourselves, the greatest threat to the United States economy is not that the Chinese economy will overtake us, but that the Chinese economy will collapse.
Next, concerning public health, cooperation with China is essential to maintaining the health of our peoples. Our Centers for Disease Control is working closely with China on pandemic influenzas and together with USAid and the National Institutes of Health on HIV/AIDS.
Energy is yet another vital area of cooperation. China is now the world's second largest consumer of energy and the largest emitter of greenhouse gases. At least one new coal-burning power plant comes online every week in China to meet China's huge energy demand. That puts pressure on the environment, but it also creates an opportunity and a market for American clean energy equipment and technology. No global solution to the challenges of energy, security and climate change can ignore China. Not only has counter-terrorism been an important common interest, but China and the United States also share a common interest in confronting the global threats posed by poorly governed and problematic states. But we don't always agree on what to do about them. Sudan is one of those places.
In Sudan, China supported a Security Council resolution, which paved the way for the development of a hybrid United Nations-African Union peacekeeping force. China has also committed 300 engineering troops to this force. But we still have substantial differences over how to approach Sudan. China's continued trade and investment ties with the Sudanese regime have drawn international criticism. We continue to urge China to use its influence in Khartoum to help end the violence and suffering in Darfur.
Nor do we see eye to eye on Burma. Burma is another problematic state where China enjoys significant influence. However, unlike Sudan, China has refused to support all formal UN Security Council action. We continue to urge China to use its influence to press the Burmese regime for genuine dialogue with the democratic opposition.
Another neighboring country, North Korea, presents a significant challenge to Northeast Asian security, impacting not only our allies, South Korea and Japan, but also China. The United States and China share a common interest in improving security and stability in the neighborhood through the denuclearization of the Korean Peninsula. We have seen China's encouraging words to that effect, backed by action.
When North Korea tested a nuclear device in October, 2006, China voted in the United Nations Security Council to impose sanctions against Pyongyang. This was a major departure from Beijing's traditional policy toward Pyongyang, a policy which emphasized that China and North Korea were as close as lips and teeth. Indeed China has played a critical role in hosting the six-party talks. While we have a long way to go to realize complete and verifiable denuclearization of the Korean Peninsula, we are well along in the process of dismantling the Yongbyon nuclear facilities, which is the source of North Korea's weapons grade plutonium. The six-party process would not have come this far without China's support and active involvement.
On another regional hotspot and proliferation problem, Iran, the Chinese government shares our goal of preventing Tehran from acquiring nuclear weapons. China clearly understands the destabilizing impact of a nuclear armed Iran and its effect on the world's energy security. China has supported UN Security Council efforts to sanction Iran. Unfortunately, However, China continues to expand its trade and investment links with Iran. The Chinese don't want a nuclear Iran. But they also don't want to sacrifice access to Iranian energy. In the villages of Darfur, on the streets of Rangoon, and in the oil fields of Iran, China is encountering the limits of its outgrown foreign policy model of non-interference in the internal affairs of other countries--a see no evil approach coupled with a focus on its own development needs. In this era of globalization and inter-dependence, China, because of its size, has been thrust into a leadership role, whether it seeks this role or not.
Let me be clear. The United States welcomes an emergent China taking its place on the world stage. Since 2005, the United States and China have engaged in a semi-annual, high level senior dialogue, led on our side by our Deputy Secretary of State, first by Bob Zoellick and now John Negroponte. The senior dialogue discusses regional and global security issues. It was in these talks that Deputy Secretary Zoellick discussed the role of China as a responsible stakeholder in the international system. And the need for China to contribute more to the maintenance of international institutions and the conditions that have enabled China's stunning economic success.
This kind of regular high-level interaction on strategic issues frankly did not exist when I first became ambassador. Our frequent high-level exchanges with China have worked to increase understanding and cooperation generally in the relationship. But building trust starts at the top.
Prior to President Bush, no sitting president has ever visited China more than once during his term. President Bush has already visited China three times and will visit again this summer. He meets face to face with President Hu at least several times each year, on the sidelines of international meetings. And I know he has exchanged numerous letters and telephone calls with President Hu. That's because when the presidents speak, I'm the operator and when they exchange letters, I'm often the postman.
So far I have focused on our expanding government-to-government ties. But government policies require public support to be sustainable and truly effective. Private people-to-people exchanges have had a profound influence on the relationship. An ever-increasing number of Chinese are coming to the United States to do business, to sightsee, and to study. And we welcome them. In 2007, the United States Embassy together with our consulates issued an all-time record 417,000 non-immigrant visas to Chinese citizens, and some 56,000 education-related visas to Chinese students. There is no better way to dispel popular Chinese misconceptions of the United States than to let Chinese citizens visit our great country and see for themselves. Going the other way, we estimate that we have approximately 240,000 American citizens present at any given time in mainland China, whether they be residents, students, businesspeople or tourists. But there is more that we can do on our side. According to the institutes of international education, 8,800 American students, including my daughter, participated in study abroad programs in China in 2007. This is a big increase from previous years, but still is certainly very small compared with the nearly 68,000 Chinese students currently studying in the United States. For those students who are here today, other than the Chinese students who are represented here today and I understand that the University of Southern California has about 1,200 Chinese students.
But those of you who are American students here today I encourage you to consider studying the Chinese language and to visit China to see for yourselves the incredible things that are happening there. For the last three decades, since the late Deng Xiaoping set his country on the path to economic reform, and the United States and China normalized relations, we have made remarkable progress in our relationship.
China is more prosperous than it has ever been in history. And the United States, by providing markets and investment, has played an important role in helping hundreds of millions of Chinese emerge from poverty. Just as low-cost Chinese goods have helped keep America's standard of living high, so has Chinese investment helped keep our interest rates low. We cannot, however, pursue a policy towards China based on excessive optimism and disregard for the real differences in values and history and natural circumstances that exist between our two countries. But it would be an even bigger mistake to focus solely on the difficulties, while ignoring the increasing opportunities that China presents. Each of you, even if you've never set foot in China, has a stake in the success of this important relationship. The tectonic plates of the comfortable world order that we have known are indeed shifting. The way we deal with China today is going to impact our world and the world that our children and grandchildren will someday inherit, for better or for worse and for many decades to come. I thank you.
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