It has been a while lately for the debate as to whether China-US trust or distrust is on the rise. Among those who are difficult to believe in the US willingness to accept China’s peaceful rise, their opinions of America finding troubles for a smooth Sino-US trade and investment environment can be conveniently supported by a number of facts.
Fortunately the latest session of China-US Joint Commission on Commerce and Trade, ended in Washington DC on December 19, has countered the aforementioned view by yielding a fruitful list of some 50 collaborative items, including reducing the threshold of exporting American dual-use goods so as to meet the demand of bilateral trade tie. This bodes well for China-US relations, especially in the era of new government of both countries from next spring.
Indeed with the normalization of bilateral tie in 1979, China and the US have developed a fast-growing economic partnership, much improving the livelihood and economy of each side and stabilizing their overall bond and the prosperity in the Asia Pacific. Though China has enjoyed an export surplus with the US, it is virtually an outcome of the globalization which combines all elements of production worldwide to benefit most, if not all, parties to the process. China and the US are major forces of such a current, and have no reason to regret.
However, with China’s economic growth, it is more able to promote importation from America so as to both benefit the two countries and to strike their trade balance. China’s modernization needs input from other countries, including from both developing countries and the developed world. Importing some dual-use goods and technology fits China’s need and helps balance China-US trade.
Over the years the US has promised to ease export control of such items to China, and the Obama administration has stated several times to facilitate such export to Beijing. Nevertheless, the US government needs action. It needs to take concrete measures to honor its commitment.
Obviously, China has taken notice of America’s concern over such export. First of all, the US is concerned about the issue of China’s protection of intellectual property rights. Secondly, it is also concerned about the linking between foreign investment in China and demand of technology transfer. It is even worried about possible diversion of dual-use items from declared end-use and end-user. These are not illegitimate reasons that warrant respect of its trade partners, as all governments are committed to protecting their technological innovation as well as competition edge.
But over-concern, rather than collaboration, neither removes sources of tension nor builds trust. Actually China and the US shall build their consensus that it is of their mutual long-term interest to protect their intellectual property rights; to assure reasonable transfer of technology; and to keep imported goods and technology from diversion.
To this end, Beijing and Washington ought to carry out honest talks and to take tangible effort so as to implement the latest round of China-US Joint Commission on Commerce and Trade. China needs to implement its commitment to using completely authentic software in all its governments, at central, provincial and various commission levels, as well as in all central government-administered state-run enterprises. Such implementation has to be as verifiable as possible. Such transparency is necessary not only to assure a legitimate order of China-US trade, but also to shape China’s own innovation and development in the future.
As for the two-way Sino-US normal trade and business, the two countries have vast amount of space for cooperation. Since the US is highly concerned about the end-use and end-user in China in terms of its dual-use export to China, this author would propose verification mechanisms such as long-range electronic monitoring and/or post-sale on-site visit, which builds trust of non-diversion. Such idea of collaborative business and security could also apply to China’s investment in America. For instance, recently the White House has turned down Sany’s application of investment of wind energy in America, on the ground that the proposed site is too close to an American military facility. Even if this is true, could the two governments work together by relocating the proposed investment site to a more distant and less-sensitive place?
Over the past three decades of China’s economic reform, China has absorbed US investment at tens of billions of US dollars, and to some extent has led the world in terms of openness. It is true that the best approach at the age of globalization is to cooperate in an open fashion. In the 21st century, China and the US have more need to collaborate, rather than to hedge with zero-sum game-play. In the meantime, both countries have to assure the legitimate interests of their partner throughout the cooperation. By reducing suspicion of each other with opening and transparency, Beijing and Washington can find out a positive approach to their new type of major power relationship.
Shen Dingli is Professor, Executive Dean, Institute of International Studies, Director, Center for American Studies of FudanUniversity.
