This year marks the 40th anniversary of the reopening of relations between China and the United States. Forty years ago, the Chinese and American leaders, with great vision and political wisdom, made the decision to reach out to each other after 22 years of estrangement and hostility. It was a decision that opened a new page in China-U.S. relations and brought about profound changes in international relations. In this connection, I want to recognize the unique role played by Dr. Henry Kissinger, through his secret visit to China in July 1971. Forty years later, despite ups and downs, the China-U.S. relationship has surged ahead and has become one of the most important and dynamic relationships in the world.
The economic interests of China and the United States have been closely interconnected. We are now each other’s second-largest trade partner. Last year, bilateral trade reached 385 billion U.S. dollars. China has been the U.S.’s fastest-growing export market for the last decade, and U.S. exports to China increased by 468 percent from 2000 to 2010, while its exports to other countries increased only by 55 percent. The U.S. continues to be the number 1 source of foreign direct investment for China, and China remains the number one foreign debtor for the U.S.
Dialogue and consultation at various levels have increased and improved. There have been frequent high-level visits and exchanges. Over 60 dialogue and consultation mechanisms have been established covering a wide range of areas, including the Strategic and Economic Dialogue, the Joint Commission on Commerce and Trade, the high-level consultation on people-to-people exchanges and the recently established Strategic Security Dialogue and the Asia-Pacific Affairs Consultation.
There are closer connections between our two peoples. Every year, more than three million visits are made between our two countries. Over 9,000 people are traveling across the Pacific every single day. We have 36 pairs of sister province/state relationships and 161 sister-city relationships. As we speak, about 130,000 Chinese are studying in the U.S., and over 20,000 Americans are studying in China. Currently, about three hundred million people in China are learning English, and more than two hundred thousand people in the U.S. are learning Chinese.
The two countries have kept effective communication and cooperation on many important regional and global issues, such as counter-terrorism, non-proliferation, global financial stability, climate change and transnational crimes.
It is fair to say that the China-U.S. relationship has evolved to a point that would have surprised even the most imaginative person 40 years ago. The fundamental reason and driving force lies in the expanding common interests between the two countries and shared responsibilities in ensuring sustainable development and dealing with emerging global challenges.
At the same time, the China-U.S. relationship is probably one of the most complex bilateral relationships in the world. China and the U.S. are different in our political systems, social values and historic and cultural traditions. There is a huge gap in the level of economic and social development, with China being the world’s largest developing country and the U.S. being the largest developed country. In terms of power structure, China is an emerging economy while the U.S. is a strong, established power. Because of these differences, we do not see eye to eye with each other on many issues. These differences can also lead to misunderstanding and mistrust in each other’s strategic intentions.
In the history of human civilization, there perhaps has never existed a bilateral relationship such as the China-U.S. relationship; therefore, there is no ready path to follow and no historical experience or model to copy. How we finally choose to manage, shape and grow this relationship will determine its course in the next 40 years.
In January this year, President Hu visited the U.S. Among the many results of the visit, the most meaningful was the shared commitment that President Hu and President Obama have made in the Joint Statement, that the two sides will work together to build a cooperative partnership based on mutual respect and mutual benefit. This has laid the groundwork, and its success depends on how we work together to make it happen.
We Must View China-U.S. Relations From A New Perspective
In the era of globalization and given the size and the degree of interconnectedness of the two countries, China and the U.S. can be regarded as a community of interests. This is not and should not be a zero-sum-game relationship. If people continue to look at each other with the Cold War mindset, China and the U.S. will be drawn into confrontation and conflict. It is imperative to shift from the old habitual way of thinking and begin to frame China-U.S. relations from a strategic and long-term perspective. We could both emerge as winners if we work together as true partners.
We Must Fully Tap The Potential To Advance Our Mutual Economic Interests
Our economic and trade relations have always been the cornerstone and engine for our overall relations. Currently, China and the U.S. are undertaking massive efforts to restructure our economies. The core of China’s 12th Five-Year Plan is to transform the mode of economic development and expand domestic consumption. The U.S. is also striving to jumpstart its economy through revitalizing American manufacturing, strengthening infrastructure and expanding exports. This offers real opportunities not only for increased trade and investment activities but also for expanding cooperation in such areas as clean energy, energy conservation, environmental protection and infrastructure.
There is also great potential for collaboration at the sub-national level. In the past decade, 47 out of 50 U.S. states have seen a three-digit, in some cases even four-digit, growth in their exports to China. The China-U.S. Governors Forum, which was launched this summer, has been well received by both sides and will provide a new and effective platform to promote economic and trade ties at the sub-national level.
We Must Continue To Improve Strategic Mutual Trust
Trust is the basis for any partnership. To a large extent, how deeply we trust each other will determine whether we can cooperate and how well we cooperate. It is imperative to have a correct judgment and understanding of each other’s strategic intention and policy objectives. Following his successful visit to China in August, Vice President Biden wrote in the New York Times that “a successful China can make our country more prosperous, not less.” Equally, a successful and growing America is also in China’s interests.
We need close dialogue and communications in order to build strategic trust and avoid miscalculations and misperceptions. We should take advantage of the dialogue mechanisms we put in place, in particular, the Strategic and Economic Dialogue, Strategic Security Dialogue and Asia-Pacific Affairs Consultation, and use them fully and wisely in order to communicate in a prompt way and minimize the chances of conflicts and strategic surprises.
We Must Properly Handle Differences And Disagreements
In the history of China-U.S. relations, the relationship has been smooth and stable when the core interests of one side are taken seriously and taken care of, and relations were less stable, and even strained, when core interests are not taken seriously.
The question of Taiwan is critically related to China’s sovereignty and territorial integrity. It is an issue that the Chinese people feel strongly about. Last month, the U.S. announced another large-scale arms sale to Taiwan. This has seriously interfered with China's internal affairs, undermined China's security and damaged China-U.S. relations. It has cast serious doubt among the Chinese people over the sincerity and credibility of the U.S. to forge a partnership with China and to contribute to the peaceful cross-Strait relations. We urge the U.S. to fully implement its commitments made in the three Joint Communiqués, especially the August 17 Communiqué, and take real actions to uphold the larger interest of China-U.S. relations and peace and stability in the Taiwan Straits.
Our economic and trade relationship is so big and expanding so rapidly that problems will naturally arise, but to politicize economic problems will not work. We recognize that there is trade imbalance between China and the U.S. Such imbalance is caused by a combination of factors, including structural trade and investment differences, divergent patterns of saving and consumption and the international division of labor, rather than caused by the issue of the RMB exchange rate. In fact, the RMB has appreciated by nearly 30 percent since the reform of its exchange rate regime started in July, 2005. However, between 2005 and 2011, the U.S. unemployment rate increased from 5.1 percent to 9.1 percent. This proves that RMB appreciation alone will not reduce the trade imbalance, nor will it help lower the unemployment rate in the U.S.
We do not seek trade surplus with the U.S. We have taken steps to import more from the U.S. in an effort to address the imbalance. Domestically, we are working to improve our legal framework, strengthen intellectual property rights protection, and provide a favorable and level playing field for foreign businesses in terms of indigenous innovation and government procurement. It is important that the U.S. take similar steps to ease the restrictions on high-tech exports to China and to provide an open and friendly environment for Chinese investment, which can contribute to the U.S. economy and employment.
How China Sees The Impact Of Its Development In Relation To The Rest Of The World
Recently, in the U.S., there has been a lot of interest in China’s "rise." Some people see the rise more as an opportunity, while others regard it more as a threat. Some even suggested that China be contained. Many people have debated the pros and cons of the China phenomenon.
The People's Republic of China has gone through an extraordinary journey in the 62 years since it was founded, particularly over the past 32 years of reform and opening up. China is now the second-largest economy, the largest exporter and the biggest emerging market in the world. More than 300 million people in the rural areas have been lifted out of poverty. The average life expectancy has increased from 35 in 1949 to 73.5 years in 2010. The living standards and educational and cultural levels of the Chinese people have greatly improved.
However, despite China’s impressive achievements, it is still a developing country in the true sense of the word. Our per capita GDP is only 4,400 U.S. dollars – one-tenth of that of the U.S. – and ranks lower than 100th in the world. Based on the UN standard of one dollar a day, 150 million Chinese are still living under the poverty line. Unbalanced development exists between the urban and rural areas and among different regions; the structural problems in economic and social development remain acute; and economic growth, which excessively depends on resource input, is increasingly constrained by resource shortages and environmental problems. China's social security system is inadequate, lagging far behind those of developed countries. There is clearly a long way to go. But we will continue to forge ahead, steadily and peacefully, for the good of the people in China and beyond.
We recognize that there are challenges associated with China’s rapid growth, but what has happened has proved and will prove that China's peaceful development not only brings tangible benefits to the people of China, but also can positively contribute to the well-being of the rest of the world.
China Can Serve As An Important Engine For World Economic Growth And Prosperity
In recent years, China has contributed to over 10 percent of global economic growth and to over 12 percent of international trade. In 2010, China contributed to over 30 percent of global economic growth. Since its accession into the WTO, China has imported an average of 750 billion U.S. dollars worth of goods every year and created more than 14 million jobs for its trade partners. After the global financial crisis broke out, China has worked closely with the international community and played an important role in facilitating global economic recovery and growth. In the next five years, China’s imports will reach 10 trillion U.S. dollars, providing further opportunities to farmers, manufacturers and workers in other parts of the world.
China has played its part in meeting the UN Millennium Development Goals, both by canceling over 25 billion RMB worth of debt owed by 50 heavily indebted, poor countries and least-developed countries, and by providing over 30 billion U.S. dollars in financial aid to Africa and other developing countries. We are helping least-developed countries expand their exports to China and have pledged zero-tariff treatment for 95 percent of their imports.
China Can Serve As A Positive Force For World Peace And Stability
China is the only nuclear-weapon country to publicly state that it will not be the first to use nuclear weapons, or use or threaten to use nuclear weapons against non-nuclear-weapon states or nuclear-weapon-free zones. China opposes all forms of terrorism and has taken an active part in international cooperation in anti-terrorism and non-proliferation.
China has played a constructive role in addressing such international and regional issues as the Korean nuclear issue and the Iranian nuclear issue, and has helped to establish the Six-Party Talks mechanism on the Korean nuclear issue.
China has taken an active part in international peacekeeping operations. We have sent 210,000 personnel to 30 UN operations – more than any other permanent member of the UN Security Council. We have dispatched naval escort fleets to the Gulf of Aden and waters off the Somali coast, playing a constructive role in combating piracy and ensuring the safety and security of international navigation routes.
China Can Serve As A Contributor To International Systems And Regimes
China has joined over 100 inter-governmental organizations, signed more than 300 international instruments and is a responsible participant and contributor in the international system. We support multilateralism. We will continue to taking part in international cooperation, promote reform of the global governance structure, contribute to the formulation and improvement of international rules and make the international order more just and equitable.
We will continue to participate in the G20 process and encourage it to move from a crisis-response mechanism to a platform for international economic governance and to better reflect the aspirations and interests of the developing countries. China’s increase in the quota and voting power in the World Bank and the IMF will enable us to play a more constructive role in improving world economic governance and economic rebalancing. We will continue to support the Doha round of talks for a balanced, “win-win” multilateral trading system with universal benefit. We will continue to speak against all forms of trade protectionism.
China is the first developing country to formulate and implement the National Climate Change Program. China is among the countries that have made the greatest efforts in energy saving and emissions reduction and that have made the fastest progress in developing new and renewable energy sources in recent years. We will continue international climate change negotiation and work with others to protect our globe based on the principle of common but differentiated responsibilities.
China Can Serve As An Important Force For A Stable And Prosperous Asia-Pacific
China is an Asian-Pacific country. We have a stake in a prosperous and secure Asia-Pacific region and will contribute to it with our own development. The fundamental goal of our Asia-Pacific policy is to achieve mutually beneficial and common development with regional countries, including with the U.S.
In maintaining peace and stability in the Asia-Pacific region, we have reached out to our neighbors to build political trust through security dialogue and military exchanges. We have solved border issues with 12 neighboring countries. We support the freedom and security of navigation in the South China Sea and have worked with the relevant parties to promote maritime security cooperation. China is committed to peacefully resolving maritime disputes with relevant countries through bilateral negotiations and friendly consultations.
China values the role of the ASEAN Regional Forum (ARF) in enhancing mutual trust among its members and in strengthening regional dialogue and cooperation. China’s economic growth has been a strong driving force for the region. We have built closer trade relations and cooperation with regional partners and have stood with them in the face of the financial crisis. We will sustain our efforts to ensure the Asia-Pacific region achieves strong, sustainable and balanced growth.
We support regional economic integration. The China-ASEAN Free Trade Area, which was established last year, opens broad prospects for intra-regional trade and investment. We will continue to promote trade liberalization and investment facilitation and to support the role of APEC as a platform for economic cooperation.
China and the U.S. share broad common interests in the Asia-Pacific, including a mission to maintain peace and stability and to achieve prosperity in the region. We respect the legitimate interests and presence of the U.S. in the Asia-Pacific and welcome a positive and constructive role by the U.S. in this region. We support and welcome U.S. participation in the East Asia Summit. We attach great importance to the Asia-Pacific Affairs Consultation and see it as an effective cooperative mechanism to advance bilateral interests as well as the common good for the entire region.
To conclude, I offer a quote from the renowned American essayist, lecturer and poet Ralph Waldo Emerson, “don’t go where the path may lead, go instead where there is no path and leave a trail.” China and the U.S. – two great nations – share enormous common interests and common responsibilities in this fast-changing, globalized world. We need vision, courage and wisdom in order to leave a trail: a trail toward a new type of relationship and a trail toward a new model for different social systems to grow and flourish together.