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"The US-China Relationship:

What’s Next?"

C H Tung

8 December, 2009

Princeton University

Dean Paxson, Tom, Students and Faculty of the Woodrow Wilson School,

      Good afternoon.

I would like to thank you all for having me here today to speak with you about China’s relationship with the US.  I feel very much at home here because I belong to a Princetonian family – my three children are all Princeton graduates; even my son-in-law is a Princetonian.  I am proud to be the head of a Princetonian family.

To be giving a talk on the subject "The US-China relationship: What's Next?" today is timely.

The world we live in has entered a post-cold war era, in which ideological differences have given way to a whole new set of issues.  If the 20th Century was shaped by the conflicts of great powers, the 21st Century will be shaped by how we, the human race, can successfully take on the challenges of energy security, climate change, food sufficiency and scarcity of natural resources, all of which are issues crucial to sustainable development and economic growth in the 21st Century.  Beyond those challenges, the world continues to face the threat of nuclear weapons proliferation, transnational terrorism and localized conflicts. There is also an urgency to improve global efforts on epidemic prevention and drug trade eradication.

There is a need for common effort to bring about global financial stability and economic recovery.  Protectionism in any way, shape or form, cannot be accepted.  Fiscal responsibility must be restored, and global imbalances must be addressed.

Today, the world yearns for peace, security, stability and sustainable development. Indeed, never has the world been faced with so many transnational challenges coming together all at the same time.  To successfully overcome these challenges, multilateral cooperation, particularly by the major powers, is critical.  The United States is the most developed and strongest nation in the world.  China is the most populated developing nation in the world.  In the multilateral effort to overcome these challenges, a good and productive relationship between the United States and China is essential.

      It is against the backdrop of the myriad and seemingly insurmountable common challenges that have arisen that President Obama has assumed the US presidency.  It is also against this backdrop that President Obama visited President Hu Jintao in Beijing in November.

From their earlier meetings, the two leaders had already expressed their wish for a “positive, cooperative, and comprehensive relationship” to tackle the challenges that face us.  At the end of President Obama's visit to Beijing, President Hu and President Obama issued a comprehensive joint statement.  The breadth and the depth of discussion, and the extent of common understanding as reflected in the joint statement, bode well for moving the relationship forward.  I would like to quote two particular paragraphs amongst the many important paragraphs, as follows:

“The United States and China are of the view that in the 21st century, global challenges are growing, countries are more interdependent, and the need for peace, development, and cooperation is increasing.  The United States and China have an increasingly broad base of cooperation and share increasingly important common responsibilities on many major issues concerning global stability and prosperity.  The two countries should further strengthen coordination and cooperation, work together to tackle challenges, and promote world peace, security and prosperity.

The two countries believe that to nurture and deepen bilateral strategic trust is essential to US-China relations in the new era.  During their discussions, the Chinese side said that it resolutely follows the path of peaceful development and a win-win strategy of opening-up, and is committed to promoting the building of a harmonious world of enduring peace and common prosperity.  The United States reiterated that it welcomes a strong, prosperous and successful China that plays a greater role in world affairs.  The United States stated that it is committed to working with other countries in addressing the most difficult international problems they face. China welcomes the United States as an Asia-Pacific nation that contributes to peace, stability and prosperity in the region.  The two sides reiterated that they are committed to building a positive, cooperative and comprehensive US-China relationship for the 21st century, and will take concrete actions to steadily build a partnership to address common challenges.”

The title of my talk today is “The US-China Relationship: What’s Next?”  I wish to highlight one of the sentences contained in the above two paragraphs: “The two countries believe that to nurture and deepen bilateral strategic trust is essential to US-China relations in the new era.”  In my view, the next step is how we go about building strategic trust between the two countries; trust that is so essential for the US and China to move into a new era.  

The first step in building trust is about promoting better understanding of each other’s history, future aspirations, areas of core national interest, and areas of common concern. China is a poorly understood country in the West.  In addition, China’s effort to reach out to the American people has not been sufficient.  Therefore, to start with, I would like to retrace with you, how far China has come in the last 60 years, since the founding of the People’s Republic of China.

When the PRC was founded on 1 Oct 1949, political institutions were only starting to be formed. People were hungry. The average life expectancy was 35 years. Infant mortality reached a high of 20%. The overall illiteracy rate was 80%. There was little organized education, no health care and no means of social security. The national treasury was empty, the economy bankrupt. There was no industry to speak of and little basic infrastructure. Indeed, the Chinese people had been enduring a century of government mismanagement, political instability, constant civil war and warfare imposed by other countries.

In the six decades since the Republic was formed, China's economy has become the world's third-largest. Life expectancy has reached 73 years; infant mortality is down to 1.5%. The literacy rate is now 95%. A nine-year education has become available to all children. Health care and social security are improving. Modern industries are being developed. Roads, railways, airports and ports blanket the country. In the areas of democracy, the rule of law and human rights -- including the rights of her 55 minority groups -- China has made enormous progress.  At no other point in history has so much improvement been made for so many people in such a short period.

I shall be happy to discuss with you in greater detail how such success came about at the Q&A session if time permits. 

China's historic journey continues to shape its future. It is a developing nation of 1.3 billion people, nearly 60% of whom live in vast, underdeveloped areas.  With a GDP per capita of 3,000 US dollars, ranking her around 100th in the world, it will take decades for China to realize comprehensive modernization. But our 60 years of progress give the Chinese people confidence toward the next 60 years.

As China has opened up to the outside world, its people have realized how increasingly intertwined their destiny is with the rest of the world. China shares the anxiety posed by challenges such as combating global warming, protecting the environment, creating energy security, achieving global financial stability, economic recovery, countering terrorism and preventing the proliferation of nuclear weapons.  China’s continuing effort in these areas should assure other nations that China will be a force for a better world in the years ahead.

             So much for the past and the future of China. I hope this has been helpful to you.  

             In addition to having a better understanding of how far we’ve come, we must also address issues that cause anxiety within our relationship.

             First is the concern in the US of how China’s rising prosperity is undermining America’s economic well-being. In a time of recession, this view tends to be easily accepted and its impact easily exaggerated. Indeed much of the increase in the unemployment rate in the United States from about 5% in January 2008 to about 10% now is not as a result of globalization or trade with China, but as a result of the global financial turmoil.

            But let us look at some of the other important facts that may give us perspective.   Throughout recent history, the United States has maintained very strong competitive advantages in crucial areas, such as your ability to attract the best talent from around the world to settle and work here. You run the best universities in the world.  You excel in innovation and creativity; your investment in scientific research annually is many many times more than any other nation; and you are blessed with the availability of enormous reserves of natural resources. On top of all that, your population is growing, whereas almost all other developed nations, as well as China, are experiencing an aging population. Indeed if you look at the past 60 years, the wealth creation in America has been extremely impressive. These competitive advantages will be with you for generations to come.

Then there is the concern that China will one day be a military threat to America.  Let us be clear: China has neither the ability nor the reason to challenge the military might of the United States.  China’s defense expenditures are for national defense purposes only.  After all, China has 14 neighbors (compared the United States, with only two neighbors).  China also needs to keep major sea lanes open because of her enormous involvement in world trade.  People ask, what if China continues to grow economically?  Would she then become a threat?  I think we need to look back at history for guidance.  At the height of China’s power, some 600 years ago (when China accounted for over 25% of world GDP), China’s ships were sent overseas for trade and goodwill purposes only.  No colonies were ever taken, and no land was ever occupied.  The Chinese culture of Yiheweigui, or ‘peace being the best policy’, will ensure China’s peaceful intentions now and in the future.  Furthermore, in practical terms, because of globalization and the advancement in transport, logistics and information technology, the prosperity of each nation today is created by enlightened domestic policies and trading with others in the global community.

Let me say a few words on the crucial issue of building strategic trust between our two nations.  The foundation of building strategic trust between two partners is first and foremost to look after one's own national interest.

The next step in building strategic trust is about recognizing the core national interests of your partner.  It is also about recognizing the areas of concern of your partner.  It is about extending help to your partner to the extent of your ability.  Certainly it is not to take action which is going to affect your partner in a detrimental way.  The United States is concerned most with financial stability and economic recovery, the fight against terrorism, preventing nuclear weapons proliferation and climate change.  These areas of concern coincide with China's.  The aims of the two countries are often the same, although the approach may be different.  Greater policy coordination and cooperation is important.  Successful cooperation will not only be helpful to finding solutions to these areas of concern but will also be helpful to building trust between the two countries.

 For China, the peaceful unification of Taiwan is an issue of core national interest. For Americans, it may be difficult to comprehend the impact of the ravages and national humiliation that the Chinese people suffered. The strength of Chinese feelings on the issue of sovereignty and territorial integrity, and hence the issue of Taiwan, and our resolve to pursue peaceful unification must be better understood in America.  Constructive efforts to push for a peaceful unification by the Obama Administration will be a good building block for strategic trust.  To start with, the Administration needs to take a serious look at the issue of weapons sales to Taiwan which is of no benefit to any of the parties.

      Trust building can be further enhanced through greater people to people exchanges, cultural exchanges, exchanges of law-makers, and visits by journalists.  There needs to be greater contacts between think tanks, academics, businesses, professionals, and youths of both our countries.  Think tanks, academics on both sides can be particularly helpful in developing ideas on how to move forward in building strategic trust.

      I am heartened to note, from the joint statement issued by President Hu and President Obama, that greater understanding and trust are being built.  Still, much work needs to be done to improve this level of trust.  All of us have an important role to play. And this is the work of the China-United States Exchange Foundation, which I established in Hong Kong two years ago.

      Princeton University, and the Woodrow Wilson School, stands at the forefront of academic scholarship on China and international relations.  It is my sincere hope that the young men and women of Princeton can help reverse decades of mistrust, and foster a stronger and more vibrant US-China relationship.    

Thank you.