In this interview with China-US Focus, Myron Brilliant, senior counselor at Dentons Global Advisors-ASG, discusses ways to enhance economic stability and increase cooperation between China and the U.S. He analyzes the influence of the four-year U.S. election cycle on candidates’ stances toward Beijing and discusses how the next U.S. leader can seek out ways to compete on a level-playing field with China — fostering constructive pragmatism and cooperation where feasible. This interview is part of a special series of conversations conducted with speakers at the 2023 Hong Kong Forum on U.S.-China Relations.
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KJ Kerr, China-US Focus:
Mr. Brilliant, first off, thank you so much for being here today and traveling to Hong Kong to be with us in person at the HK Forum. We just had your panel earlier, and one thing that stood out to me was your point about what the business community can do in the relationship and how the business community should be standing up and saying something to help ease tensions. So in line with that, what opportunities and challenges do you see for businesses and investors in the evolving China-U.S. relationship? And what do you think the business community can tangibly do to help ease tensions?
Myron Brilliant:
It's really important that the China-U.S. Exchange Foundation create an enabling environment that's quite candid, so that business leaders and other stakeholders in the relationship can exchange not only a direct perspective about the challenges, but also foster some opportunities. What this forum is doing today, and what the organization is about, is to not obscure the challenges that exist at the macro level in the U.S.-China relationship. There are well-defined tensions politically, and challenges in confronting technology. And the link with national security is there. But there is an overwhelming sense that the two countries are tied economically in really pronounced ways. Eighty percent of trade between China and the United States does not touch on national security concerns. In fact, that number may be even higher.
Business leaders in the United States, ones that I've worked with in my role as the head of the U.S. Chamber’s international operation, want to do business in China, and they want to do business in the United States, and they want to do business around the world. They don't want to have to confront choices because of politics. But they also want to mitigate risk. And out of COVID, certainly, supply chains were challenged. There were issues around resiliency, and there were concerns about how the United States and China were going to manage their relationship going forward. So there has been, not just a political change. I think business leaders have awakened to a complex geopolitical environment. And they have to mitigate some risks. So they're not leaving China, but they are de-risking some of their investments in China by changing some of their supply chains, which is not easy, or by looking at other markets, whether it's India or Vietnam. But they're not losing sight of the 1.3 billion customers that live in China. And they're not losing sight of the importance of business-to-business exchanges, of people-to-people exchanges, of the need to recognize that whatever industry we're talking about, both China and the United States are critical to the global economy. And we've got to confront those challenges that are creating the downward spiral in the relationship.
We've got to promote opportunities that recognize, whether it's in health, the agri-food business, the service industry, portfolio investment or direct investment and in so many other ways, including climate and clean tech … where we've got opportunities, even in this difficult political environment. And it is difficult. It is as difficult as I've seen it in the 30-plus years that I've worked on the U.S.-China relationship. But we have to get through it. And this is an inflection point in which business leaders need to step out more. They need to have their voices heard in this debate. They cannot be passive at a time where business has so much at stake in the global economy, and so much at stake in continuing to find ways for China and the United States to find pragmatism in this relationship. So I encourage business leaders to speak out. I encourage them to use their voice in Washington, I encourage them to use their voice in Beijing, and to also recognize that not all business is done between the two capitals. Whether it's in the Pearl River Delta or in Louisville, Kentucky or other parts of the United States, there are plenty of opportunities still for business to flourish and for partnerships to be developed, even in this complex environment.
KJ Kerr:
Thank you so much for that. There's also a lot of buzzwords that we're hearing surrounding the relationship, and even here at this conference — decoupling, dual circulation. … I think it was Dr. Lampton who said Deng Xiaping and Jimmy Carter ... those kinds of things are not the world that they dreamed of whenever they met together and worked on normalizing relations. So what do you think about economic decoupling between China and the U.S.? Do you think this is the right approach? Why or why not? And what do you think is the best way?
Myron Brilliant:
We're throwing a lot of words out in the United States and China relationship. Decoupling, de-risking, China-plus-one strategies. … I think the reality is that if you're sitting in the boardroom of a U.S. company, you are going to look at the geopolitical landscape, you are going to look at not only growth rates in key countries but also to protect your supply chains, protect your resources. But you're going to look at ways that you can advance relationships in the big markets of the world. Of course, China is one of the most important markets. I know that politicians like to talk about decoupling and de-risking, and there is certainly a lot of that going on in terms of the public narrative. But at the same time, what's going on in the boardrooms is some rethink about supply chains — not a drastic rethink in all cases, and certainly some sensitivities to how to speak to these issues with their shareholders, with their employees, and of course, with politicians. But I would just say that what's most important is to remember that business travels around the world, and that protecting a home market loses you other opportunities. So whether it's government policy in the United States or in China, this notion of self-reliance in an interconnected world, this notion of dual circulation, and not letting there be an integration of global supply chains — whether that's policy coming out of Beijing, or whether it's policy in the United States to increase the use of industrial policy means, or in Europe, where you also see Europe deviate from the United States in areas like standard development — that fragmentation is not in the interest of business leaders.
What does business want? They want certainty. They want to know that they can do business, not just today or five years from now but in 25 years. They're making long-term investments in every country they engage in. They're not going to pull out of those investments overnight, but they need some certainty from government leaders to support their ability, whether it's doing research in one market and manufacturing in another, whether it's interconnected in other ways, whether it's creating joint venture relationships, they have to recognize that there are different models out there. I don't think competition is a challenge. I think confrontation and the notion of confrontation in the U.S.-China relationship, and even in other markets, that's a challenge. We can deal with competition, let everyone play on a level playing field. And how we get there is not just good government policy, but business leaders speaking out to the importance of a global community. Globalization is a dirty word now. But really, it doesn't have to be. It's about lifting up out of poverty. Millions of people around the world, including China have benefited from globalization. The United States has benefited from globalization. We have to rethink going forward what that means.
KJ Kerr:
Thank you so much for that. I think you already touched on a few of my follow-up questions regarding the economy. But can you expand a bit more on what you think are the most pressing issues vital for enhancing economic stability and cooperation between China and the United States?
Myron Brilliant:
There are a number of important issues that the United States and China have to work on —a number of pressing issues in this relationship. First of all, we have to create a framework for dialogue. I love the Chinese proverb that dialogue doesn't cook rice. But the reality is you have to have dialogue between government leaders, and it can't always be formal. The informality of the dialogue between the two countries is not there like it used to be five or 10 years ago. So we need to have more consistent dialogue. Second, we need to have this notion that there are areas where the two sides should encourage not just private sector engagement but scientific cooperation — we've heard that about that today — and educational exchanges. We know how few American students are now studying in China, and decreasing numbers of Chinese students feel safe to study in the United States. That's a terrible narrative. We need to reverse those trends, and that comes from government action. But it also comes from civic-minded leaders in both countries standing up for the fact that people-to-people exchanges are good. When they declined during the COVID-period, the relationship got worse. When we reverse that trend, when we encourage people-to-people exchanges, sub-national exchanges … when we think about the fact that global pandemics are better addressed when China and United States don't accuse each other but figure out ways to work together; when we think about climate and clean tech. I don't want to go to another conference in China where I'm the only American voice talking about clean-tech cooperation.
Incredible innovation is going on in China. Incredible innovation is going on Europe and the United States, in Japan and elsewhere. We need to work together on making sure that innovation translates into improvements for humankind. To do that, it means that the United States and China have to figure out a way to have greater cooperation on climate and on clean tech, and encourage scientific cooperation. It doesn't mean that we shouldn't protect our national security. But we should define national security in a way that's not an excuse for a trade impediment. We will have reasons to protect highly sensitive national security interests. China will have its reasons. But we have to be careful that we don't develop national security tendencies in either country that really are disguised trade barriers because we're trying to enhance our own competitiveness at the cost of the other, the zero-sum dynamic. And that's a hard issue to reverse, because that has been now the pattern for both countries and others that are involved in this as well over the last five to seven years. So how do we get out of that? Governments have the right kind of dialogue, but they don't leave the private sector on the sidelines, they integrate the private sector. So whether it's AI dialogue that the two governments are now contemplating, a 1.5 tract that brings a private sector component, or whether it's talking about other elements of technology, I don't think you can have progress unless the public-private partnership is incorporated in a stronger way. So we've got work to do. There are pressing issues, there are always going to be market access concerns. There's always going to be regulatory challenges. There's certainly going to be questions about intellectual property. …Those issues are not going away. But they're not going to be addressed by sitting around tables where China and the United States are not at the same table.
KJ Kerr:
Absolutely. I know you talked about this in the session that was closed to the media, so if you don't feel comfortable answering this question, that's OK. But you talked about how in the U.S., we're in a four-year cycle — how our presidents change every four years, and how the narrative that a president is weak on China is not the way to win. How do you think we can change that narrative and integrate that change into our presidential elections, particularly as we're entering the election period next year for the upcoming 2024 elections?
Myron Brilliant:
China and the United States have different political systems. China has the benefit of a long-term narrative. If government officials move up the ladder, they take on more senior roles. President Xi Jinping is a good example of that. In the United States, the political cycle is much shorter. Our presidents are serving at most two four-year terms. They have to get a lot done, and then you never know who's going to be the next president and which party that president's going to represent. So we have a lot of change always in our system. Democracies can be messy. However, we also know that there is now more consensus in the United States about the perceived challenge of confronting China. Some of that consensus, I think, is wrong. But in order for that to change, you need political courage, and when you're running through a four year cycle as president, it's complicated when not only most of your party, but the other party also, thinks that China is increasingly a threat to America's competitiveness, as well as to national security and in other areas, not sharing the same values. So it's going to require a lot of courageous leadership. We had that from President Nixon and President Carter. We may be getting to a point where we're going to need that kind of leadership now. It may not be popular at first, but there is some good news here. If I think about the presidential election cycle coming forward in our country, I don't think China is the centerpiece of it. I'm not saying that China won't factor into the discussions. But I think there are other issues that are going to get more attention, including our own domestic economy. Also the two candidates will present some interesting issues as well. What I hope is that no matter who wins the election, that either presidential candidate and whoever that ends up being, whoever emerges from it will try to take a new, more stabilizing direction. I believe that President Xi and President Biden next week in San Francisco will make every effort to set a floor on this relationship and manage the downward trajectory. That's good. That's what these high-level visits in the last couple of months have represented: an opportunity. I hope that neither China nor the United States will do any harm that would undermine that ability to create a floor, a stabilizing floor in the relationship — not just in the interest of people in both countries but in the global interest.
What I really want even beyond that is a strategic, overarching vision that the American public hears from the next president of the United States — yes, we are going to have areas where we're going to compete hard with China, as we do with Europeans, Japanese and South Koreans. But we're also going to probe areas where it's in our mutual interest to have cooperation. Again, whether it's dealing with global health, whether it's dealing with climate change and clean tech cooperation, whether it's dealing with other forms of scientific cooperation, whether it's dealing with AI governments, I would hope that the next president of the United States, whoever that is, will share a vision for the American people and go sell it on the premise that the two most important countries in the world, the two largest economies, cannot be on a course of confrontation. They have to find ways to compete on a level playing field and also find pragmatism, constructive pragmatism, and cooperation where they can.
KJ Kerr:
Thank you so much for those insights. Last, as you know, it's CUSEF's 15th anniversary. So we would love if you would take a moment, if you don't mind, to talk about the significance of CUSEF's work, or perhaps your experience in working with CUSEF over the years.
Myron Brilliant:
Well, let me just say that CUSEF has played an important role in creating a forum — forums I should say — where different kinds of community stakeholders in the U.S.-China relationship feel free to offer their views in a very transparent, very candid way. I have a very long-standing personal relationship with the founder. Mr. Tung Chee-hwa. We have known each other since the mid-1990s. And I've known Dr. Victor Fung. I am very encouraged that CUSEF is now in the hands of new leadership, because there are tremendous people who have committed to supporting this organization and to making sure this organization has impact, not only to help Hong Kong but to be a positive force of change in the U.S.-China relationship. But for that to happen, you need new leadership and new opportunities, for new stakeholders to step up. And I think it's great that CUSEF at the 15th year is beginning to really embrace that. We talked about change and progress in the U.S.-China relationship, which is the theme of this conference. I think this organization at this moment in time is embracing that as well. And whether that's through John Zhao's leadership and Andy Tung's leadership now, and the array of activities designed to bring youth into the dialogue, to design to look at different areas of work streams ... again, whether it's around climate, around healthcare, around AI or in other areas, I think it's tremendously important.
I also want to add one other point about what CUSEF is trying to do, which I think is important. We cannot frame the relationship solely through the U.S.-China perspective. We have to recognize that the global community is impacted. I think CUSEF in its mission is also trying to bring other stakeholders from other countries into the conversation. And we see that as evidence from the forum over these last two days. I know that is embedded now very much in the mission of CUSEF. So happy anniversary! But I think the next 15 years will be even more impactful and more important for this relationship because we are now at a very fragile time in the global community, with the kinds of disruptions we're seeing, whether it's in the Middle East, the war in Europe, obviously around food security, around energy security — and so it's terrific to be participating. And I congratulate CUSEF in its mission and objectives.
KJ Kerr:
Thank you so much, Mr. Brilliant. We really appreciate you.
