Vision and conviction will take China-US relations forward

Keynote Speech by State Councilor Wang Yi

At Dinner Co-hosted by

National Committee on US-China Relations,

US-China Business Council,

US Chamber of Commerce and Council on Foreign Relations

New York, 24 September 2019

Ladies and Gentlemen,

It is my great pleasure to come back to New York and meet so many friends, both old and new.

During the UNGA leaders’ week last year, I spoke at the Council on Foreign Relations, and I argued that the crux of the China-US relationship was the US perception of China. I asked the audience to think really hard about the key questions: Is a peaceful, cooperative and open China an opportunity or a challenge to the US? Is a proactive and constructive China on the world stage a partner or an adversary for the US?

One year on, these questions are still being debated in the United States, which seems to be leading to two different views. This may not be a bad thing for a relationship as important and complex as China-US relations, as the debate will help people get closer to facts and truth. I believe that at the end of the day, Americans will reach a sensible consensus and find the right answer to those questions.

This year marks the 70th anniversary of the founding of the People’s Republic of China as well as the 40th anniversary of China-US diplomatic relations. This is a moment that means a lot to both China and the United States. A Chinese proverb has put it well, “A man in his forties should have no doubts about life.” At this historical moment, we need to stand high, look far and take China-US relations forward with vision and conviction.

Over the past four decades, China-US relations have weathered many twists and turns. Yet they have steadily moved forward with progress beyond even people’s boldest imagination. It has brought tremendous benefits to both nations, and contributed greatly to peace, stability and prosperity around the world. On the other hand, however, China-US relations have once again come to a crossroads. Some people are using every means to depict China as a major adversary, marketing their prophecy that the relationship is doomed to fall into the Thucydides Trap or the Clash of Civilizations Trap, and they even clamor for a full “decoupling” with China.

Therefore, this giant ship of China-US relations is faced with two very different routes. One features calm seas and broad prospects, and the other faces churning waters and raging waves. It begs the question: Where will China-US relations go in the next 40 years? Are we going to move ahead along the right route, or veer onto the wrong one with endless troubles ahead? When we assess and decide on such a momentous issue, we must turn to history and look at the past four decades of China-US relations for inspiration and guidance.

First, mutually beneficial cooperation is the only right option for China and the United States, and neither country has taken advantage of the other.

Recently there is such a claim that the US has been “ripped off” in its cooperation with China. Is that really so? Of course not. In fact, both countries have benefited tremendously from cooperation in the past 40 years. Such cooperation, enhanced by our comparative strengths, has helped drive robust growth of the US economy, substantially cut the cost of living for US families, and enabled American firms to take home huge profits.

Over four decades, China-US trade in goods surged by 252 times. A USCBC report found that between 2009 and 2018, US exports to China alone supported more than 1.1 million jobs in the US. Ninety-seven percent of the US companies surveyed reported profits from doing business with China. And trade with China has saved the average US family US$850 on a yearly basis.

Economic globalization, as the trend of the times, should not and cannot be held back. The free flow of resources enabled by globalization has created enormous wealth, yet it will also lead to uneven development within countries and trade imbalances between them. The right approach to tackle domestic challenges is to deepen reform and improve the distribution system. And issues between nations should be addressed by enhancing global governance through equal dialogue and consultation. Neither scapegoating nor unilaterally initiating a trade war is the right prescription. The trade frictions between China and the US in the past year and more have inflicted losses on both countries, losses that shouldn’t have happened. Higher tariffs have raised the production cost of US companies, pushed up US consumer prices, and dampened the growth prospects of the US economy. Businesses, farmers and consumers of the United States have felt mounting pressures. For instance, the Federal Reserve Bank of New York estimated that due to the additional tariffs imposed on US$250 billion of Chinese exports in 2018, US consumers would have to spend an extra US$52.8 billion every year. That is US$414 more in expenditure for every US family. According to The Trade Partnership, an American consulting service, a 25 percent additional tariff on US$300 billion of imports from China will make at least 2 million American jobs disappear, drive up household cost by over US$2,000, and wipe out 1 percent of the GDP of the United States. Yet that is not all. When the two largest economies lock horns, the world will suffer. The OECD already warned that China-US trade frictions could dent global growth by at least 0.7 percentage point. All this points to one simple fact: Cooperation benefits both China and the United States and the rest of the world; friction will only create a lose-lose situation and harm the whole world.

Second, opening-up and integration represents the right direction, and neither China nor the United States can move ahead without the other.

Over the past four decades, China-US relations have grown in sync with China’s reform and opening-up as well as globalization of the world economy. The two countries are now the most important trade partners and investment destinations for each other. Our industrial, supply and value chains are deeply interconnected, and our interests closely entwined. In 2018, the bilateral trade exceeded US$630 billion, and two-way investment surpassed US$240 billion in cumulative terms. China has become a major export market for US aircraft, farm products, automobiles, and integrated circuits. Of all US exports in 2017, 57 percent of soybeans, 25 percent of aircraft, 20 percent of automobiles, 14 percent of integrated circuits, and 17 percent of cotton were sold to China. At present, there are five million travels between our two countries every year. That translates into 17,000 passengers every day, with one flight either taking off or touching down every 17 minutes.

Given the size of our economies and the level of interdependence, the so-called “decoupling” or “shutting the door to each other” is just like an attempt to build castles in the air. It is neither sensible nor realistic. After several decades of hard work of the Chinese people, the Chinese economy has grown from a small pond to something as big as a vast ocean. China is now the world’s second largest importer of goods and services. It has the world’s biggest and most promising market with the largest and fastest-growing middle-income population. Decoupling from the Chinese economy would be decoupling from opportunities, and from the future. I hope the US business community would fully appreciate this logic. According to US statistics, despite the on-going trade frictions, US companies invested US$6.9 billion in China in the first half of 2019, an increase of 1.5 percent over the average level in the same period of the last two years. Eighty-seven percent of US companies in China indicated that they would choose to stay in China because the advanced supply chain and labor force in China are just irreplaceable. And 74 percent of the members of AmCham China plan to invest more in China.

Opening-up is China’s set policy. China’s door will not be closed; it will only open even wider. We fulfilled as early as in 2010 our tariff reduction commitments made upon joining the WTO. Currently, our average tariff has been cut further to 7.5 percent, lower than that of most other developing countries. China is also the first in the world to host an annual import expo. The purpose is to open up China’s market, and share with others opportunities brought by China’s development. China is accelerating the structural reform of its economy. This month, we announced further opening of the Chinese market by abolishing the QFII and RQFII investment quotas. The Foreign Investment Law and its matching regulations will enter into force next year to foster a fairer, more transparent and orderly business environment. The management model of pre-establishment national treatment and the negative list is being applied nationwide. Foreign investors will find the negative list getting shorter and shorter. Yet, opening-up should go both ways. While China opens wider to the US and the rest of the world, we expect the US to do the same to China and remove all unreasonable restrictions. All in all, China’s efforts of reform and opening-up during the past few decades and what it has accomplished along the way should be recognized by others, rather than be disparaged or denied. China’s development and progress has delivered enormous benefits to other countries, including the US. No one should attempt to deny or distort this fact.

Third, conflict and confrontation will lead nowhere, and neither country can mold the other in one’s own image.

China and the United States differ from each other in history, culture, social system, development path and national conditions. Disagreements and frictions between us are almost inevitable. What matters most is that we perceive them objectively and handle them properly. Over 2,000 years ago, Chinese sage Confucius observed that “A gentleman seeks harmony without uniformity whereas a petty man does just the opposite”, making the case that real harmony is anchored on recognition of and respect for differences. Your great philosopher Ralph Waldo Emerson wrote that in true friendship, both parties “recognize the deep identity which, beneath their disparities, unites them”. The two philosophers, though living millennia apart, spoke to the same truth. The advance of human civilization must not stop, still less go backward. Differences and disparities should not be a chasm preventing people from engaging each other. Rather, they could become an impetus for mutual learning and shared progress.

In the early years of the People’s Republic of China, the United States sought to contain China. The two countries even fought a war on the Korean Peninsula, which was followed by 22 years of confrontation. General Omar Bradley, then Chairman of the Joint Chiefs of Staff, called what happened in Korea “the wrong war, at the wrong place, at the wrong time, and with the wrong enemy”. It was not until the 1970s that things began to change. Dr. Kissinger’s secret visit to China and the meetings between President Richard Nixon and Chairman Mao Zedong and Premier Zhou Enlai re-opened the door of contact, and set the two countries on a path toward peaceful co-existence and joint pursuit of prosperity. The ups and downs in our relations provide ample evidence that confrontation and conflict is not in the interests of either China or the United States, and that dialogue and cooperation is the only way forward. Some Americans claim that the US’ decades-long engagement policy has failed in its original purpose of changing China, and that it is time to revert to a policy of containment. Such an idea of molding others according to one’s wish is wrong, and will never work. Seventy years have passed, and the US should not start another wrong fight with the wrong country.

The world we live in is a diverse place. In the modern times, China had explored and experimented on possible paths toward development and rejuvenation, including by adopting the Western system at one point. But they all ended in failure because of their incompatibility with China’s national conditions and needs. It wasn’t until the Communist Party of China (CPC) adapted the Marxist theories to Chinese realities that a path toward national rejuvenation and happiness was found. And that is the path of socialism with Chinese characteristics. Seventy years of history leads to the conclusion that this is a right path and is hence fully and firmly supported by the Chinese people. Polls by multiple foreign institutions show that China enjoys the highest domestic support rate regarding its social system and development path among all the countries surveyed. Since it is a successful path, why should we change course? Since it enjoys the people’s support, why should we give it up? Let’s ask ourselves: Which other system on earth could ensure unity and stability of a country as enormous and sophisticated as China and make it an important pillar for world peace and security? Which other path could China take to create a miracle of development, lifting 1.4 billion people out of poverty and delivering moderate prosperity in all respects, and, while at it, making such a major contribution to human progress? As an ancient civilization with 5,000 years of history, China will not be blinded by floating clouds. We will maintain our strategic focus and our confidence in our culture. We will not be influenced, and even less manipulated. We will unswervingly follow the path and direction we have chosen. We will always grasp the future of our country and nation in our own hands and march toward the great renewal of the Chinese nation with an indomitable will.

Of course, China’s development path ahead is long and winding, and much remains to be improved through reform. We welcome all well-intentioned advice and valuable suggestions from foreign friends. At the same time, countries differ in national conditions and have different needs. We fully respect the choices other countries, the US included, have made about their system and path. We will not export our social system or development model. And China will not follow the old path of past powers who sought hegemony. It is never China’s intention to change the United States. Likewise, the United States should not seek to change China. The United States is working to “Make America Great Again” and “Keep America Great”. The Chinese people, like the American people, are entitled to a better life. These two development goals are not mutually exclusive or a zero-sum equation. We may well help each other and work with each other. China’s renewal will provide the US with a stable and sustainable market; a vibrant US will provide a better external environment for China’s development. The key is to embrace an open mind and respect each other’s right to development, and appreciate each other’s accomplishments. In the final analysis, for the sake of our two countries and the world, we must find a way for two major countries different in social system and cultural background to live together on this planet in peace and to cooperate with each other for win-win results.

Fourth, shouldering responsibilities together accords with the trend of history, and neither of our two countries has to replace the other.

Some in the United States are hyping up the so-called “shift of international power”. They worry that China will unseat the United States from its role in the world. This is a strategic misjudgment about China and shows a lack of self-confidence. China is still the largest developing country in the world. It is far behind the United States in terms of per capita national income, the Human Development Index and sophistication of science, technology and education. Traditional Chinese culture stresses moderation and humility, and believes kindness should be reciprocated and repaid. Seeking hegemony has never been in the Chinese DNA. China has no intention to play the “game of thrones” on the world stage. For now and the foreseeable future, the United States is and will still be the strongest country in the world. Mr. Deng Xiaoping once said humorously that should the sky fall, there is the tallest guy to prop it up. We hope the United States will continue to play a constructive role for global peace and development, and we welcome such a role. The world is confronted with growing global challenges. No country can do well in isolation or fix all the problems by itself. Sharing international responsibilities is an inevitable trend. All countries, especially the big ones, can complement one another by drawing on their strengths. China stands ready to fulfill its due responsibilities.

When the world was hit by the financial tsunami 11 years ago, China and the United States, together with other countries, worked in solidarity to effectively stem the crisis. Today there are more destabilizing factors and uncertainties in the international situation. And various “black swans” and “gray rhinos” are lurking across the world. If and when another storm hits, the only choice for us is still to rally together in the same spirit and with one heart, one mind.

As the second largest contributor to the UN regular budget and peacekeeping assessment, China has sent 39,000 peacekeeping military personnel to UN peace missions around the world, the largest among the permanent members of the UN Security Council. China has played an active part in the multilateral process of global governance regarding climate change, sustainable development, nuclear security, cyber-security and non-proliferation. China has been working with other countries to seek a political settlement of hot-spot issues. And we take seriously our cooperation and coordination with the US on all these issues.

President Xi Jinping once pointed out that by working together, China and the United States can accomplish great things that benefit both countries and the world. The two Presidents have agreed that our two countries need to manage differences on the basis of mutual respect, expand cooperation on the basis of equality and mutual benefit, and jointly advance the China-US relations based on coordination, cooperation and stability.

How to effectively implement what our Presidents have agreed upon? I wish to share with you three observations.

First, for areas where we can cooperate, we need to resolutely advance and deepen such cooperation in a win-win spirit.

Under the current circumstances, there are more and more areas where China and the US can and should cooperate. Issues ranging from fighting terrorism and drug-related crime to dealing with issues of the Korean Peninsula and Afghanistan, all require that our two countries engage in focused and deeper cooperation to benefit our peoples and beyond, and to lend new impetus to the growth of our relations in the new era. In the past weeks and months, the Chinese government has taken firm measures to schedule the whole class of fentanyl-related substances. This has become the latest highlight in China-US cooperation.

In China-US relations, economic cooperation has been the “ballast” and people-to-people exchanges the “propeller”. The last thing we should do is to throw off the ballast or shut down the propeller. On the contrary, we need to build on the good work in place, craft new plans based on new realities, actively look for and expand our shared interests, and explore new areas of cooperation. Our people’s desire for enhanced exchange and cooperation must be honored. Interactions on business, science, technology, education, tourism, culture, youth and at the sub-national level must be encouraged, not restricted or blocked.

Second, for issues where we do not see eye to eye with each other, we need to have them properly managed in the spirit of avoiding conflict or confrontation.

It is nothing new that there is competition and disagreement between us. However, we must not let our mind be controlled by prejudice and apprehension, or let our relationship be defined by conflict and confrontation. What we need is to have those differences properly handled, and keep working to expand common ground while setting aside and reducing differences, so as to create space for dialogue and open up prospects for cooperation.

China’s Belt and Road Initiative is not targeted at the United States. There may be some doubts on the part of the US, something that could be worked out through dialogue and communication. What we don’t welcome are attempts to discredit the initiative. Regarding the United States’ global alliance system and cooperation proposals, China respects the traditional influence and actual interests of the United States. Yet neither the alliance system nor the proposals should be predicated on harming Chinese interests or targeting China. Meanwhile, there is no need for our two countries to guard against each other in Africa, Latin America or the Middle East. Rather, we may increase dialogue and mutual understanding, and explore the possibility for tripartite cooperation.

Our trade frictions need to be resolved through dialogue and consultation. China has kept its door to negotiation open. Yet the negotiation must be based on mutual respect, equality, mutual benefit, and honoring one’s word with action. Negotiation cannot take place under threats or at the expense of China’s legitimate right to development. In recent weeks, both sides showed some goodwill on tariffs. Last week, a vice ministerial consultation was held in Washington, D.C., and the consultation was constructive. Hopefully the upcoming 13th round of high-level economic and trade consultations will produce a positive outcome. China and the US are both great countries with great wisdom. If we have dialogue as equals and pursue win-win cooperation, I am sure we can figure out a solution to effectively manage and properly resolve our differences.

Third, for matters that involve each other’s core interests, China and the US need to stick to the principle of non-interference in each other’s internal affairs in a spirit of mutual respect.

If the China-US relationship is to remain stable, it is most important that we respect each other’s territorial sovereignty, social system and development path, and try not to impose one’s will or model on the other. China will never interfere in the internal affairs of the United States, and we trust that the American people are capable of sorting out their own problems. Likewise, we expect the US to treat China in the same spirit and not interfere in China’s internal affairs.

On the Taiwan question, the crux of the matter is that China faces the danger of a separation of its territory. Upholding national unity and territorial integrity is the bounden duty of all governments in the world, with the US being no exception. China stands for and has worked toward peaceful reunification, yet we will never allow “Taiwan independence” forces to get their way. We hope the United States will faithfully honor the one-China principle and the three Sino-US joint communiqués, and support the Chinese government in opposing “Taiwan independence” and separation.

As for Hong Kong, the “one country, two systems” arrangement has been a big success, a fact that no one can deny. To maintain Hong Kong’s prosperity and stability, the pressing task now is to reject violence and defend the rule of law. We hope the US will be consistent in its words and actions, respect China’s sovereignty, and respect the efforts of the Hong Kong SAR government to stop violence and restore order.

Let me also spend a moment to talk about the Xinjiang region of China. The government of the Xinjiang Autonomous Region has recently taken a series of preventive measures against terrorism in accordance with law. This is purely China’s internal matter, yet our preventive efforts have been deliberately discredited and attacked by some anti-China forces. So what is the truth of this matter?

The truth is that the Chinese government has all along valued Xinjiang’s stability and development, and taken care to preserve its religion and culture. In the 64 years since the Xinjiang Autonomous Region was established, its economy has grown by 80 times, and hundreds of thousands of local people have been lifted out of poverty. There are over 28,000 religious sites in Xinjiang and close to 30,000 clerical personnel. Both figures have increased ten-fold compared with several decades ago. Nowadays, every 530 Muslims in Xinjiang have a mosque, which is higher than even many Muslim countries.

The truth is that people of different ethnicities in Xinjiang suffered deeply from extremism and terrorism in the last 20 years and more. There had been several thousand cases of violent terrorism since the 1990s, and thousands of innocent people had been killed or injured. These attacks took a heavy toll on the life and property of the local people and their freedom of religious belief and other fundamental human rights.

The truth is that the measures taken in Xinjiang in recent years have a clear-cut purpose. It is to prevent extremism and terrorism at the root. These measures are consistent with Chinese law and the common approaches of the global community. According to the UN’s Plan of Action to Prevent Violent Extremism, poverty, unemployment and low levels of education are the causes of violent extremism along with the distortion and exploitation by violent extremist groups of religious beliefs. The Plan of Action suggests early engagement and combining counter-extremism actions with preventive measures. That is precisely what Xinjiang has been doing. Visible progress has been made: There has not been a single case of violent terrorism in the past three years.

The truth is that the education and training centers in Xinjiang are schools that help the people in question free themselves from the influence of extremism and terrorism and acquire professional skills. The centers are anything but “concentration camps”. This year, we have invited more than 1,000 Westerners from the diplomatic, media and academic circles, including from the United States, to visit Xinjiang. They have seen the education centers first-hand and visited other places. Their impression is that the situation on the ground is the opposite of what some Western forces and media have described. Not long ago some 50 countries, in a co-signed letter to the President of the Human Rights Council, expressed support for China’s position on Xinjiang-related issues. They pointed out that the education and training centers and other measures in Xinjiang have effectively prevented extremism and terrorism, and basic human rights in Xinjiang have been safeguarded. Among the co-signatories, nearly 30 countries are members of the Organization of Islamic Cooperation.

Rumors find no market among the fair-minded and pale in the face of facts. The measures taken by the Xinjiang Autonomous Region are all for the safety and happiness of the 25 million people of different ethnic groups there, and for contributing a greater share to the international fight against terrorism. We are fully open and above-board, and are confident that no vile smears will succeed. We hope to present a true picture of Xinjiang to all of you here and to people from other countries. We would welcome you to Xinjiang and see for yourselves the situation there, and we hope that no one is misled or deceived by the rumors.

Friends,

The China-US relationship is the most consequential bilateral relationship in the world. As President Xi Jinping has emphasized, our two countries have a thousand reasons to grow the relationship and none whatsoever to wreck it.

The future of China-US relations and global peace and development hinges on us drawing on the experience and lessons of history, and on the choice we make and action we take today. I am confident when we effectively enhance mutual trust, properly manage differences and strengthen exchanges and cooperation in keeping with the principle of no conflict or confrontation, mutual respect and win-win cooperation, China-US relations will surely enjoy sound and steady growth, bringing greater benefits to people of our two countries and beyond. Thank you!