He Weiwen: Talks mark first step towards stronger China-U.S. relations
June 19 , 2023
By He Weiwen, a senior research fellow at the Center for China and Globalization(CCG).
US Secretary of State Antony Blinken’s trip to China on June 18-19 is a positive step towards stabilizing bilateral relations, managing differences and avoiding conflicts between the world’s two largest economies.
Chinese President Xi Jinping met with Secretary Blinken on June 19. He emphasized that state-to-state interactions should always be based on mutual respect and sincerity. President Xi hoped that Secretary Blinken, through this visit, could make a positive contribution to stabilizing China-U.S. relations. Wang Yi, Director of the Central Foreign Office, also met with Secretary Blinken on June 19.
The five hour-long talks between Chinese State Councilor and Foreign Minister Qin Gang and Blinken on June 18 were candid, in-depth and constructive, covering overall bilateral ties and important issues.
Both sides agreed to jointly implement the important common understandings reached by their countries’ presidents in Bali recently, effectively manage differences, and advance dialogue, exchanges and cooperation.
Both sides agreed to maintain high-level interactions, to keep moving forward consultations on the guiding principles of China-U.S. relations, to continue advancing consultations through the joint working group to address specific issues in the relations, and to encourage more people-to-people and educational exchanges, and had positive discussions on increasing passenger flights between the two countries. Both sides welcomed more visits by students, scholars and business people, and agreed to provide support and facilitation to this end.
Blinken’s China trip and China-U.S. talks are major symbols in China-U.S. relations because he is the first US secretary of state to visit China in five years, and the first senior member of the Biden Administration to do so. The trip also symbolizes an important step towards implementing decisions made by Chinese President Xi Jinping and US President Joe Biden last November during the G20 Bali Summit. It is anticipated that US Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo might visit China later, and bilateral working groups will start work, all preparing for a possible China-U.S. meeting on the sidelines of the Asia-Pacific Economic Cooperation Summit in San Francisco in November 2023.
In order to turn the words at the talks into actions for substantive improvement of China-U.S. bilateral relations, three issues will be of crucial importance.
First, China and the U.S. must reaffirm and abide by the basic principles of their bilateral relationship. The relationship should be based on the UN Charter and its principles: namely, mutual respect of each other’s sovereignty and territorial integrity, non-interference in each other’s internal affairs, peaceful coexistence, equality and mutual benefit. No matter if the U.S. sees China as completely different in terms of its values, and its political and social systems, it should not affect normal state relations. The rules-based international order is based on the UN Charter and relevant rules and must be respected by both China and the U.S. Under these principles, there is no justification for the current U.S. narrative.
Second, under the principle of mutual respect of each other’s sovereignty and territorial integrity, the U.S. must cease to support separatist forces in Taiwan, stop all official exchanges with Taiwan, stop all military provocations in the Taiwan Straits, and commit to not interfere in China’s unification.
Thirdly, China and the U.S. should sit down and work hard to stop all de-coupling policies and actions, stabilize trade and investment relations and anchor bilateral relations with a solid ballast stone.
Current policies have hit normal bilateral trade. According to China customs statistics, China-U.S. two-way trade fell 12.3 percent during the Jan.-May period 2023，with China exports to the U.S. down 15.1 percent compared to the same period last year. U.S. share in China global trade hit a new low of 11.3 percent, compared to 12.5 percent a year ago. The U.S. has lost its long-held position as China’s largest export market, and retreated to third place, after the Association of Southeast Asian Nations and the European Union. According U.S. Bureau of Economic Analysis statistics, U.S. goods imports fell 4.9 percent y-o-y during Jan.-April, 2023. Among its major partners, imports from Mexico increased by 5.8 percent, and those from the EU increased by 9.7 percent, but imports from the Pacific Rim fell 15.2 percent The main reason was a sharp fall in imports from China (down 27.5 percent, or net $46.29 billion), not covered by other partners. Hence, the U.S. supply chain is no longer complete, let alone resilient, and thus unsustainable.
Leading U.S. multinational companies have been critical of the de-coupling policy and chip restrictions. Tim Cook of Apple, Elon Musk of Tesla and Bill Gates, among others, have all visited China, reaffirming plans to stay and grow in China.
If Washington has a genuine desire to stabilize and develop its relationship with China, the U.S. should take steps towards changing its policies relating to technology prohibition, restrictions on and de-coupling with China. Joint working groups should start work on an overall assessment of the China-U.S. semiconductor supply chain with the aim of easing prohibitions and restrictions, encouraging China-U.S. trade and investment in the semiconductor and other high-tech sectors, so as to check the drastic fall in bilateral trade and bring it on a new growth track.
Blinken’s China trip and subsequent China-U.S. consultations should be observed not only from a bilateral perspective, but also in a much larger and higher world paradigm. China and the U.S., as the two largest economies and most important powers in the world, share a common responsibility to maintain world peace, cooperation and development. The world is now faced with serious challenges of geopolitical confrontation and geo-economic fragmentation. Gita Gopinath, First Deputy Managing Director of the IMF warned recently of the significant dangers of world geopolitical confrontation and geo-economic fragmentation. She said that world trade and investment restriction measures had grown three fold since 2018, with manufacturing being moved back home, or to political alliance countries, and with increasingly discriminative measures in subsidies or local content requirements. Cross-border direct investment flows are increasingly focused on geopolitically aligned countries, especially in major strategic industries. An earlier IMF staff report found that a limited geo-economic fragmentation might lead to a 0.2 percentage point world output loss and serious geo-economic fragmentation could lead to a 7.0 percentage points loss. If technology de-coupling happens, the world output loss could reach 8.0-12.0 percentage points.
Solid follow-up efforts by both China and the U.S. in the aforementioned three areas, will not only contribute to a substantive improvement in China-U.S. relations, but will also make a significant contribution to the integrity of global supply chains, reducing the major geopolitical and geo-economic risks and thus support world peace and global cooperation at large.
