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China-US Relations at a New Historic Starting Point

2013/10/23

Keynote Speech by Director-General Xie Feng at the Seminar
"China-US Relations under Changing Circumstances:
A Time of New Beginnings" sponsored by
Fudan University Centre for American Studies and
Brookings Institution Centre for Northeast Asian Policy Studies

23 October 2013, Shanghai

President Yang Yuliang,
Professor and Director Wu Xinbo,
Senior Fellow and Director Richard Bush,
Consul General Robert Griffith,
Dear Friends, Ladies and Gentlemen,

Good Morning. It gives me great pleasure to join old and new friends at this seminar, organized by Fudan University Centre for American Studies and Brookings Institution Centre for Northeast Asian Policy Studies. I appreciate the long standing efforts made by Fudan University and Brookings Institution and all present here for closer mutual trust and cooperation between China and the US. I pay my tribute to all of you.

This seminar has an important and highly relevant theme, "China-US Relations under Changing Circumstances: A Time of New Beginning". It is very true that this year China-US relationship has stand at a new historic starting point. It is at an important stage that builds on past achievements and will determine the future course of the relationship.

First, both countries completed government transition.

On March 14, the very day when President Xi Jinping assumed office, he and President Obama had a telephone conversation. The new foreign policy teams of the two countries very quickly established smooth and effective communication channels, and built good working relations. Thanks to the joint efforts by the two sides, China-US relationship has got off to a good start and achieved a smooth transition.

Second, a new model of presidential meeting was established.

The historic meeting at Annenberg Estate in June was not only the first face-to-face discussion between the two Presidents after the two countries' government transition, but also an innovation in high-level exchanges between China and America. The two Presidents held two meetings, a working dinner and a walk together. The time of communication totalled over eight hours, which was unprecedented in China-US relations. While previous presidential meetings had mainly focused on bilateral relations and international and regional issues, this time, the two leaders started with and spent a long time on respective domestic development and governing idea. This has been very useful in deepening mutual understanding and trust.

During the meeting, President Obama presented President Xi with a California redwood chair as a gift. In 1972, President Nixon planted several redwood saplings in Hangzhou during his visit to China. Redwood tree has since become a witness to the development of China-US relations. Perhaps this is the consideration behind the selection of this gift.

Third, China-US relationship has entered a new stage of development.

The most important outcome at Annenberg Estate was the consensus on building a new model of major-country relations between China and the US. This charts the strategic course and blueprint for the future development of China-US relations. President Xi has laid out a clear vision for the new model. In his words, the essential features of this model include number one, "no conflict or confrontation", number two, "mutual respect" and number three, "win-win cooperation". President Obama responded positively, and stressed the importance for America and China to explore a new model of state-to-state cooperation on the basis of mutual respect and mutual benefit. This is a strategic choice made by the two leaders, by drawing on the experiences of over four decades of China-US relations and in light of the circumstances in their two countries and the world at large. China and the US cannot afford to repeat the old pattern of confrontation and conflict between major countries. Instead, we must find a road of win-win cooperation.

Since then, our two sides have worked diligently to implement the consensus between the two Presidents, and reaped an "early harvest".

- We conducted close and smooth high level exchanges. The two Presidents had another important meeting during the G20 summit in St Petersburg, which lasted almost two hours. Premier Li Keqiang had a meeting with Secretary Kerry during the East Asia Summit in Brunei. Vice Premier Wang Yang, State Councillor Yang Jiechi and Secretary Kerry, Secretary Lew held the fifth Strategic&Economic Dialogue in America. State Councillor and Defence Minister Chang Wanquan and Foreign Minister Wang Yi both visited the US.

- We have made full use of the existing dialogue mechanisms. The fifth S&ED in July has come up with a record 179 outcomes, covering wide ranging areas like economic, military, science, energy, environment, people-to-people and local-level exchanges and cooperation. The Dialogue has added new impetus to the bilateral relations. Working groups on climate change and cyber issues were established. Their first meetings were held successfully, with a number of cooperation intentions agreed.

-We have made new breakthroughs in economic and trade cooperation. A highlight is the agreement to start substantive talks for a Bilateral Investment Treaty (BIT) on the basis of pre-establishment national treatment (PENT) with a "negative list" approach. The ninth round of BIT negotiations was conducted in China last June, and the tenth round is taking place this week in the US. Chinese investments in the US has continued to grow. America has become China's second largest destination of foreign direct investment.

-We have opened new ground in military-to-military relations. Both sides are committed to developing a new military relationship consistent with the new model of major-country relations. Not long ago, Chinese Defence Minister Chang Wanquan and Navy Commander Wu Shengli paid successful visits to the US. Chairman Dempsey, Under Secretary Miller and the Chief of Staff of the Air Force Mark Welsh visited China this year. To implement the consensus between the two Presidents, our two sides are holding talks on the establishment of a notification mechanism for major military activities and the rules of behaviour on military air and maritime activities in high seas. The two navies recently conducted a joint maritime search-and-rescue exercise in Hawaii and a joint anti-piracy exercise in the Gulf of Aden. China will also attend the 2014 Pacific Rim exercises.

- We have worked together through dialogue and coordination to ease tensions on hotspot issues. China and the US have maintained close consultation and coordination with other parties concerned on issues like the Korean Peninsula, Syria and Iran. With their joint efforts, an escalation of tension on the Peninsula was prevented, the Syria chemical weapon issue realized a soft landing, and the Iranian nuclear issue has seen positive developments. China received visits by Palestinian and Israeli leaders and worked with the US to encourage peace talks. Our two countries' coordination on Afghanistan and the two Sudans has also been productive.

At the same time, the building of a new model of major-country relations is an unprecedented cause. There is no existing examples to follow and it will be a long term task. We need to:

First, be confident. We live in a world featuring fast political multi-polarization, economic globalization, cultural diversification and an information-based society. As the two largest economies in the world and both permanent members of the UN Security Council, China and the US enjoy a deep convergence of interests. Our two countries are interconnected and interdependent. We are on the same boat and must go for win-win cooperation. To build a new model of major-country relations is not one item of a multiple choice, but the only correct answer.

Second, show sincerity. Differences between China and the US will not disappear overnight just because we are building a new model of relations. The key is for our two sides to respect each other's social systems and development model, as well as sovereignty, security and development interests. We should find constructive ways through dialogue and consultation to manage differences. It is improper to take the new model of major-country relations as a basket and put everything into it, such as raising a list of concerns and having conditions attached. Nor should we take the concept as a ruler to judge the other side unilaterally, or link it to every issue.

Third, take real actions. The new model of major-country relations is not only a nice wording. We must make it work. It must be translated into real action and concrete cooperation, and reflected in all aspects of the bilateral relations. Our two sides should deepen practical cooperation in areas like economy and trade, investment, military-to-military relations, cultural and people-to-people exchanges, new energy, environmental protection and infrastructure development. We need to maintain and strengthen coordination and cooperation on the Korean nuclear issue, Iranian nuclear issue, Syria, Afghanistan, climate change, cyber security and other regional and global issues, by conducting more joint projects with good demonstration effects to kickstart broader cooperation.

To be more specific, in the coming months and years, China and the US should focus on the following aspects.

First, take as an opportunity their respective economic restructuring and transformation, use the BIT negotiations as a break point, and open a new chapter in China-US economic and trade cooperation.

China and the US are two huge economies at different levels of development. Our two countries have great complementarity and huge potential for cooperation.

Next month, the third plenary session of the 18th National Congress of the Communist Party of China will be convened. The meeting will draw a masterplan on deepening reform in all aspects, including a time frame and road map. The priority is to give bigger play to the basic role of market in allocating resources. The pilot free trade zone in Shanghai is aimed at exploring experience in opening up investment access and the services sector, with trade facilitation measures introduced to boost import and export. It is projected that in the coming five years, China's imports of commodities will exceed US$10 trillion, its overseas investment will reach US$500 billion, and Chinese tourists will make over 400 million outbound visits. China welcomes companies from the US and all other countries sharing the dividends of China's new round of reform and development.

China is ready to work with the US side to advance the BIT negotiations. It also hopes the US will take measures to provide a fair and sound investment environment for Chinese companies, and facilitate healthy development of two-way investments.

In the US, the energy independence strategy has achieved notable success. China hopes for an early opening of LNG export from US to China and cooperation in shale gas development. This will help reduce the trade deficit, improve our joint efforts to tackle climate change, and deepen integration of interests between our two countries. The US is upgrading its infrastructure, an area that China has rich experiences. If there is more convenience for investment and financing by Chinese companies in America's infrastructure development, new horizon will be opened in China-US cooperation.

The control on high-tech export to China has long been a bottleneck in the growth of China-US trade relations. The US side has on many occasions suggested an adjustment to the policy. But we only heard footsteps on the stairs, with nobody walking down. More recently even the footsteps could no longer be heard. China hopes the US side will take real actions at an early date.

Second, jointly promote unity and cooperation in the Asia-Pacific to increase mutual trust and realize benign interaction.

The Asia-Pacific is more dynamic and has more potential than any other region in the world. It is the main source of growth for the world economy. In over thirty years, there has been no major war in the region. Countries have enjoyed peace, focused on development, and remained committed to cooperation. Both China and the US, the whole region and the rest of the world have all benefited. Such a situation should be cherished.

China and the US have more converging interests and frequent interactions in the Asia-Pacific than anywhere else. It is imperative that our two countries start the building of this new model of relationship from the Asia-Pacific. Our common interests in the Asia-Pacific far outweigh the differences. Both of us hope for continued peace and stability in the Asia-Pacific. We both want to promote economic growth and facilitate trade and investment in the region.

China and the US have many common friends in the Asia-Pacific. China-US relations and the two countries' relations with third countries should develop in parallel. Most countries in the region do not want to choose sides between China and the US. Nor should America choose sides between China and certain countries in the region. Military alliances formed in history should not impair the interests of any third party, or intervene in territorial and sovereign disputes in the region.

The East China Sea and South China Sea are bilateral issues between China and relevant countries. They are not and should not become issues between China and the US. China is committed to resolving disputes peacefully through bilateral and friendly consultation. Oriental people have their own wisdom, and Asia has its own way. It is hoped the US side will take an objective and fair position, and play a constructive role in Asia-Pacific affairs.

Third, work together to resolve hotspot issues, tackle global challenges, and enrich the strategic dimension of China-US relations.

On the Korean Peninsula, despite some relaxation, the situation remains sensitive and fragile. China, the US and other parties concerned should work together and encourage the DPRK to move toward denuclearization step by step. We hope the US will carefully consider an appropriate threshold for dialogue, and respond to the DPRK's concerns. Relevant parties should make concerted efforts and create positive conditions for an early resumption of dialogue.

In Syria, the work of the OPCW is progressing smoothly, and Chinese experts has also participated. China and the US should jointly support and participate in the verification and destruction of chemical weapons, work for an early opening of the second Geneva Conference and facilitate a political solution.

On the Iranian nuclear issue, the latest round of dialogue in Geneva has touched on substantive issues, and achieved some positive developments. China, the US and other relevant parties should seize the opportunity, narrow differences through negotiations and work for more progress. In the meantime, the US should stop sanctions against Chinese companies.

On Afghanistan, China is ready to advance assistance cooperation with the US and facilitate a smooth transition in Afghanistan. China will host the forth foreign ministers' meeting of the Istanbul Process next year. We hope the US will support and take an active part in the meeting.

In Middle East, growth and spread of extremist, terrorist and separatist forces following turmoils in the region are not in the interests of China, the US and all other parties. China is ready to strengthen dialogue and coordination with the US on peace talks between Palestine and Israel and other major issues in the region, to jointly promote peace and stability in the Middle East.

In all above issues, China and the US share important common interests and same or similar strategic goals. Certainly when handling them, our two sides may have different ideas and approaches. It is essential that our two countries respect and accommodate each other's interests and concerns, and strengthen cooperation and coordination.

Climate change, cyber security, counter-terrorism, non-proliferation, energy security, food security and transnational crimes are common challenges facing mankind. China and the US should strengthen cooperation with the rest of the international community, and jointly tackle these challenges.

Forth, properly handle sensitive issues and effectively control differences and risks.

The Taiwan question remains the most important and sensitive issue in China-US relations. Since 2008, cross-Strait relations have achieved a major turnaround for peaceful development. No matter how cross-Strait relations develop, the one China principle will never change. On the Taiwan question, China and the US share at least three common positions. First, to oppose "Taiwan independence"; second, to maintain peace and stability in the Strait; and third, to work for a peaceful solution. We hope the US side will recognize new developments in cross-Strait relations, follow the new trend, and adopt new thinkings. We hope the US will abide by the one China policy and the three China-US joint communiques, support peaceful developments of cross-Strait relations and political dialogue between the two sides, and stop arms sale to Taiwan.

The Chinese side also hopes the US side will properly handle sensitive issues related to Tibet, Xinjiang, Hong Kong and Macau, human rights and religion, and minimize disturbances to the bilateral relations.

Dear Friends,

In the next two months before the end of the year, China and the US still have a full agenda, including a number of important high level exchanges. The forth High-level Consultation on People-to-people Exchange will be held in November in America, and 25th Joint Commission on Commerce and Trade will be held December in China.

The building of a new model of major-country relations needs wide support from all walks of life in our two countries, especially the active participation and contribution from the think tanks. I value this opportunity to exchange views with you, and look forward to hearing your insightful observations. Thank you.

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