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Home » Opinion » Foreign Views
Tending the garden of China-US relations
By Reuben Jeffery |
May 14, 2009, Thursday
|
Print Edition
Print Edition
THE US-China economic relationship is one of the most important bilateral relationships in the world - offering extraordinary benefits to both sides.
Let me start with some basic statistics that will help to illuminate the economic relationship between the US and China.
The two-way trade between the two countries was more than US$386 billion in 2007. In 1992, it was just US$33 billion. The US is now China's second-largest trading partner, and China is now the third-largest trading partner for the US, after Canada and Mexico.
This relationship benefits our two countries, while also contributing to global economic growth. In 2007, the US and China together generated more than 30 percent of worldwide GDP.
Goldman Sachs recently cited three reasons for optimism about the Chinese economy (in the global financial crisis).
The first factor is (China's) US$586 billion stimulus package.
The second factor is the (Chinese) government's announcement that it planned to implement a comprehensive health insurance policy for rural China by 2011, which would cover 90 percent of the population.
The third factor is the central bank's loosening of monetary policy.
I can say, as an outside observer, that China's response to the financial turmoil has been forthright - demonstrating a seriousness of purpose and a recognition of the consequences for the country, the region, and the world of standing still.
And I know from my time in government that my colleagues and I were impressed with the speed and scale with which the government took action.
Economics and financial sectors throughout the world remain fragile, and we don't know when stability and growth will return. But if there's a silver lining to the dark clouds, it would be that the financial crisis has helped to cement, and strengthen the economic relationship between the US and China.
Our two nations have worked together to address the financial crisis, both bilaterally, and through multilateral forums, such as the G20.
At the G20 meeting in London last month, China and the US helped the assembled leaders to reach agreement on making available an additional US$850 billion of resources through the IMF and the multilateral development banks to support growth in emerging market and developing countries.
On a bilateral basis, the US Export-Import Bank and the Export-Import Bank of China announced in December that they will provide funding to support over US$38 billion of finance for exports for emerging market countries.
The US has also been vocal in supporting China's membership in the reconstituted Financial Stability Board, as well as quota reforms within the IMF that will give China and other growing nations more influence and a role that is more reflective of their presence in the global economy.
Throughout the financial crisis, The US and China have developed a constructive record of collaboration, and I'm confident this collaboration will continue.
I'd now like to step back and try to identify some principles that can help to guide policymakers as they continue to build on our long-term relationship.
The first principle is to tend to the shared garden.
George Shultz, who served as Secretary of State for (US) President Reagan, has compared diplomacy to gardening.
He once wrote that "if you tend your garden regularly, and get the weeds out when they are small, your plants will have a chance to thrive."
This is a useful metaphor of the context of US-China relations, as diplomacy between our two nations has sometimes been haphazard, and the effect has been the delivery of different - and sometimes conflicting - signals. This relationship deserves sustained attention at the highest levels of the US government and the Chinese government.
The second principle is to be patient.
In dealing with Chinese counterparts, US officials must remember that China is a 5,000-year-old society, with not only a promising future but a glorious past.
Americans need to keep in perspective the fact that China is an enormous society of 1.2 billion people with the full range of attendant complexities. Both countries need to take the long view.
The third principle is to focus on the little things.
The fourth principle is to encourage and facilitate the move to multilateralism.
The fifth principle is to continue to focus on economic integration and development.
The sixth, and final, principle is for the US and China to acknowledge their interdependence.
Morgan Stanley has found that US imports from China resulted in US$600 billion of savings to US consumers from 1995-2005. The US, in other words, has a significant stake in continuing its economic progress in China.
(The author, a former US Under Secretary of State for Economic, Business, and Agricultural Affairs, is now a senior adviser of the Washington, DC-based Center of Strategic and International Studies. The article is adapted by Shanghai Daily from his speech at Shanghai Forum on May 11. The views expressed are his own.)
Let me start with some basic statistics that will help to illuminate the economic relationship between the US and China.
The two-way trade between the two countries was more than US$386 billion in 2007. In 1992, it was just US$33 billion. The US is now China's second-largest trading partner, and China is now the third-largest trading partner for the US, after Canada and Mexico.
This relationship benefits our two countries, while also contributing to global economic growth. In 2007, the US and China together generated more than 30 percent of worldwide GDP.
Goldman Sachs recently cited three reasons for optimism about the Chinese economy (in the global financial crisis).
The first factor is (China's) US$586 billion stimulus package.
The second factor is the (Chinese) government's announcement that it planned to implement a comprehensive health insurance policy for rural China by 2011, which would cover 90 percent of the population.
The third factor is the central bank's loosening of monetary policy.
I can say, as an outside observer, that China's response to the financial turmoil has been forthright - demonstrating a seriousness of purpose and a recognition of the consequences for the country, the region, and the world of standing still.
And I know from my time in government that my colleagues and I were impressed with the speed and scale with which the government took action.
Economics and financial sectors throughout the world remain fragile, and we don't know when stability and growth will return. But if there's a silver lining to the dark clouds, it would be that the financial crisis has helped to cement, and strengthen the economic relationship between the US and China.
Our two nations have worked together to address the financial crisis, both bilaterally, and through multilateral forums, such as the G20.
At the G20 meeting in London last month, China and the US helped the assembled leaders to reach agreement on making available an additional US$850 billion of resources through the IMF and the multilateral development banks to support growth in emerging market and developing countries.
On a bilateral basis, the US Export-Import Bank and the Export-Import Bank of China announced in December that they will provide funding to support over US$38 billion of finance for exports for emerging market countries.
The US has also been vocal in supporting China's membership in the reconstituted Financial Stability Board, as well as quota reforms within the IMF that will give China and other growing nations more influence and a role that is more reflective of their presence in the global economy.
Throughout the financial crisis, The US and China have developed a constructive record of collaboration, and I'm confident this collaboration will continue.
I'd now like to step back and try to identify some principles that can help to guide policymakers as they continue to build on our long-term relationship.
The first principle is to tend to the shared garden.
George Shultz, who served as Secretary of State for (US) President Reagan, has compared diplomacy to gardening.
He once wrote that "if you tend your garden regularly, and get the weeds out when they are small, your plants will have a chance to thrive."
This is a useful metaphor of the context of US-China relations, as diplomacy between our two nations has sometimes been haphazard, and the effect has been the delivery of different - and sometimes conflicting - signals. This relationship deserves sustained attention at the highest levels of the US government and the Chinese government.
The second principle is to be patient.
In dealing with Chinese counterparts, US officials must remember that China is a 5,000-year-old society, with not only a promising future but a glorious past.
Americans need to keep in perspective the fact that China is an enormous society of 1.2 billion people with the full range of attendant complexities. Both countries need to take the long view.
The third principle is to focus on the little things.
The fourth principle is to encourage and facilitate the move to multilateralism.
The fifth principle is to continue to focus on economic integration and development.
The sixth, and final, principle is for the US and China to acknowledge their interdependence.
Morgan Stanley has found that US imports from China resulted in US$600 billion of savings to US consumers from 1995-2005. The US, in other words, has a significant stake in continuing its economic progress in China.
(The author, a former US Under Secretary of State for Economic, Business, and Agricultural Affairs, is now a senior adviser of the Washington, DC-based Center of Strategic and International Studies. The article is adapted by Shanghai Daily from his speech at Shanghai Forum on May 11. The views expressed are his own.)
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