What we are witnessing is Diplomacy working at the highest level.It produces potentially good history for Mankind, rather than bad memories.
It Is Cruising
It has only been seven months since Xi met with Trump at Mar-a-Lago. The progress on the Roadmap for US-China Relations is very encouraging indeed. In addition to the signing of more than USD 250 billion in trade and investment deals during Trump’s state visit to China, the two countries have advanced on multiple cooperative initiatives in all of the four-pillars of security, economic, cultural and cybersecurity/law enforcement.
The US and China are setting sail in the right direction. The motto “No clashing, no confrontation, mutual respect and win-win cooperation” is now being put into practice. Although only at the very beginning, both sides have embarked upon the endeavour to build a constructive relationship for the next fifty years, that will benefit not only the peoples of the two countries, but of the rest of the world as well.
Long-term Benefits and Harmony
The Chinese are focusing on building long-term structures, not just immediate results. The US$ 253.5 billion signing was just the tip of the iceberg and a PR display for the visit, whereas the additional work-in-process is equally real and larger in aggregate amount. The deals struck so far are not merely buying and selling of products, but also exchanges of means of production, complementary specialties and know-how, cooperative development of goods and services, opening of markets, substantive cross-border investments and joint-venture partnerships.
On the one hand, they reflect the outcome of following the approach prescribed in Section 5, Paragraphs (4, 5) of the Roadmap, by analysing the two countries’ comparative advantages and disadvantages in specific details, and thereby discovering synergies and complementary variables. On the other hand, they further tie the two sides to cooperative commitment through joint venturing, co-investing and partnering responsibilty and responsiveness.
(A template of the model may be analogous to this： One side brings the sausages and the other side provides the buns, and together they develop special mustard and relish, and produce the best hot dogs. China’s bulging middle-class provides a huge ready market, and the product can be sold to the rest of the world as well.)
It calls for a different mind-set. It has to work with market forces, the Chinese insists. Think years ahead and build viable and durable structures. Think win-win and co-prosperity, not maximum profit to only one party. Build businesses that will make the US-China chained gang operate better, more freely and harmoniously. It must be a vibrant process that will grow organically, not a one-off purchasing spree.
Putting Money And People To Work
The results so far are not exclusively Chinese giveaways, but they bear the unique Chinese design. They make sure that both sides have to go to work. And the Americans, the smart ones, get it.
During the past two weeks, all the big wigs from Wall Street and many technology moguls have congregated in Beijing and Shanghai. They were talking big deals, deals of the future. These are mainly joint-venture propositions, as sharp American businessmen are eying up their counterparts in China and the infrastructural resources available there, to build a stake in the economies of the future. In addition, China is opening up its markets in areas that will provide opportunities for US small businesses. That will be evident later.
Goldman Sachs sealed a deal with China Investment Corporation to form a US $ 5 billion direct investment fund, which I think will probably operate more like an investment bank. Its stated objective is to invest in US manufacturing, but there are many cutting-edge technology convergence opportunities that will be big and universal, and can be better realised by leveraging off each other (especially now that China’s advances in science and technology are dramatically breaking out).
That did not escape people like Bill Gates. He approached the Chinese Premier Li Keqiang about participating in China’s cutting-edge development of new energy via breakthrough in controlled nuclear reaction technology (I do not know what value Bill Gates can add though). Mark Zuckerberg kept practising his Mandarin (Putonghua) on the Chinese, as he inched closer and closer to plugging himself into China’s super-robust cyber-integrated infrastructure. JP Morgan assembled its International Advisory Board in Shanghai to hold its annual meeting, bringing its oldest member Henry Kissinger into town. Elon Musk is negotiating to set up Tesla plants in Shanghai, importing American specialty equipment and know-how. Its objective in production also entails developing and utilising new technology, such as China’s large-scale 3-D printing and materials fabrication….. These two weeks, China is a very happening place.
And China is using its money to invest in America. The biggest immediate winners are indeed in the energy sector and, in particular, Alaska and West Virginia. In addition to investing US$ 43 billion in liquefied natural gas operations, China will also invest in fisheries and maritime industries in Alaska. West Virgnia will get US$ 80 billion capital injection by the Chinese into shale oil production and development of downstream petro-chemical industries. It will include money for R&D so that when China eventually develop its own vast shale oil reserves at home, it will use cutting-edge and environmentally-sound techniques (it kills two birds with one stone). China will also invest heavily in various US environmental technologies and services, as it has one of the world’s most polluted environments to clean up. Hopefully, as America becomes great again, China will become more beautiful.
Money is easier to comprehend than other matters. The first of the four pillars in US-China relations is security. It is well-known that North Korea is the most urgent security issue on Trump’s trip. But after emerging from their private one-on-one chat over servings of tea in the study at the Imperial Palace (or Forbidden City), Trump seemed to be wiiling to follow Xi’s approach. I will explain that in a piece entitled “The Paradox Of The Pandora-Box”.
Another pillar concerns cybersecurity and law enforcement. China wants its fugitives in corruption cases repatriated and the US wants reciprocity in enforcing court judgments, especially in commercial disputes. Cybersecurity is a sensitive issue because it dovetails into the US clandestine program of using cyber weaponry to trigger instability and subvert regimes in the region, which is a geopolitical security, rather than law enforcement, issue. It is unknown what are on the table for discussions, but a host of new issues are coming to the fore with the advent of quantum technology, including applications in computing and communication, that may need coordinated policies.
Ultimately, the most important outcome of this historic cooperative relationship between the US and China will be cultural. Firstly, there should be processes to enhance people-to-people mutual understanding, respect, and appreciation of differences. Secondly, they should be cognizant of each other’s values and ways of life, and aware of the characteristics in each other’s society. And finally, they should promote learning from each other and working together to enrich lives and develop friendship. In science and technology, US must stay current on China’s development, in order to cooperate and share, before China starts pulling away.
An Historic Juncture
As I have said, America and China constitute the axle in today’s polycentric world. Their successful cooperation will usher in a New Era of World Order around which the entire world can revolve and prosper. Their clashing will destabilise the world, impede progress and inflict sufferings on people.
US-China relations need to be proactively managed because, by nature and apparent national interests, they are objectively speaking “neither friend nor foe” while at the same time “both friend and foe”. It is a fine art to hone the friendliness to fruition, while controlling and managing the contradictions such that they will not spiral into ever-deepening enmity and distrust.
On such themes, Dr. Henry Kissinger and I are of one mind (we went all the way back to the groundbreaking Nixon visit to China in 1972). This time around, the 94-year-old is once again at the helm, guiding the US administration down a path of history that may produce relative peace for decades. Once again, I am at close proximity.