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CNN Live Event/Special

CNN International - On China

Aired December 19, 2012 - 05:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEOTAPE)

RICHARD NIXON, PRESIDENT OF THE UNITED STATES: In years ahead will look back and thank us for this meeting.

KRISTIE LU STOUT, CNN INTERNATIONAL ANCHOR: It was a moment the U.S. president knew history would remember.

NIXON: This was the week that changed the world.

STOUT: Richard Nixon's 1972 visit to China thawed relations between the two countries, while putting a deep freeze in the Cold War. It also helped give Nixon his reelection.

UNIDENTIFIED MALE: The door is opened. Now the work must continue.

This is why we need President Nixon, now more than ever.

UNIDENTIFIED MALE: China is stealing American ideas and technology.

STOUT: Forty years later, China still plays a role in U.S. politics.

UNIDENTIFIED MALE: Romney's never stood up to China. All he's done is send them our jobs.

STOUT: And while the rhetoric has hardened, the reality hasn't. The relationship between China and the United States is more important than ever.

We welcome three unique perspectives to Hong Kong. As professor of political science at Beijing's Foreign Studies University, Xie Tao's research focuses on China-U.S. relations. Frank Ching opened the "Wall Street Journal's" Beijing bureau in 1979. He's now a political commentator and columnist. Jane Perlez is a "New York Times" Pulitzer Prize winning chief diplomatic correspondent, based at the newspaper's Beijing bureau. At the table this month, "ON CHINA."

(END VIDEOTAPE)

STOUT: Frank Ching, Jane Perlez and Xie Tao, welcome to ON CHINA.

Now, this year is the 40th anniversary of U.S. President Richard Nixon's visit to China. Take us back to that moment in 1972. How did China and the U.S. view themselves, and their rightful place in the world? FRANK CHING, POLITICAL ECONOMIST: In 1972, I think both China and the United States saw the Soviet Union as a threat, and that was what brought them together, to work together to counter the Soviet Union. It is quite interesting, because Nixon, of course, was seen as the arch-conservative. He was an anti-Communist. And yet it was Nixon who reached out to China, and subsequently, we found out that in China, Mao had this group of four marshals whom he had assigned to (INAUDIBLE) world situation. And their advice to him was to reach out to the United States.

STOUT: Because they had a common enemy.

CHING: Exactly.

STOUT: Now, fast forward to 1989. And there is no more Soviet Union. But not only that, but Tiananmen Square and the crackdown there takes place. Was that the first moment when human rights became a major political issue in the U.S.-China relationship?

XIE TAO, BEIJING FOREIGN STUDIES UNIVERSITY: Exactly, exactly. You know, for example, based on my own research, before 1989, the State Department and other government agencies were lobbied by human rights groups to say at least a few words in an annual human rights report about China. But this was completely ignored, and this angered a lot of people. So starting from 1989, human rights and trade and other issues became prominent and salient to many American people.

STOUT: Later on, President Bill Clinton, he criticized the previous administration for cuddling to dictators, and yet he also struck the deal that would pave the way to China joining the World Trade Organization. How would you characterize U.S.-China ties under Bill Clinton?

JANE PERLEZ, NEW YORK TIMES CHIEF DIPLOMATIC CORRESPONDENT: Well, as you mentioned, they started off on a very sour note. Bill Clinton went to extremes and called the Chinese regime the butchers of Beijing, in reference to 1989 Tiananmen massacre. So when he came to power, though, things were different, and he paved the way very assiduously for China to become a member of the World Trade Organization, and that was extremely important, because it brought China onto the world stage and helped China become a stakeholder in the world, and behave in more normal ways, both in -- economically and diplomatically.

XIE: There is an irony here. Before 2000, before China's accession to the WTO, a lot of American major corporations lobbied on behalf of the Chinese government. So that is called the new China lobby. But once China is in the WTO, these companies began to stop lobbying for China, because now they have an international mechanism under which they can resolve all these disputes. And so China is -- China today is becoming the target of many investigations and (INAUDIBLE) investigations.

STOUT: Now, after China joined the World Trade Organization and George W. Bush became president, that's when we started to hear the term "strategic competitor" being used to describe China. Was it that during the era of George W. Bush when China really started to emerge as an economic challenger?

CHING: Yes, I would say so. Actually, George W. Bush came to office, as you know, being -- seeing China as the next Soviet Union. The U.S. had lost the enemy in the Soviet Union, and he thought China was the next enemy. But then, 9/11 came along, and he realized that there was already an enemy attacking the U.S. He didn't need to look for a future enemy. And then he thought that China could be a partner in the war against terrorism, and so 9/11 more or less saved the U.S.- China relationship at that time.

PERLEZ: But I must say also that the war on terror gave China basically a free ride for a decade.

CHING: That's right, that's right.

PERLEZ: While the United States was tied up with very difficult wars in Afghanistan and Iraq, China just breezed ahead. It was economically stronger and was able to take charge, in a way, because the United States was distracted in these terrible wars.

CHING: That's right. The U.S. took its eye off the ball. Was focused entirely on the Middle East.

XIE: You see, that 10 years, I would also argue, is a 10 wasted years for China's foreign policy. I agree that on the economic front, China really took big strides, but in terms of foreign policy, actually, those 10 years could have been a golden opportunity for China to build up its own influence in that area, because the United States was preoccupied in the Middle East. However, you look back now, China really did not do very much at all to build up relationship with its neighbors, to solve these maritime disputes.

STOUT: But wasn't that the intention of President Hu Jintao, to focus on the economy and achieve economic stability first?

XIE: You look at the footprints of China's top leadership. Where did they go? They most frequently go to Europe. Look at how many times our premier, our president, our vice president, visited the UK, France, Germany, Iceland. How many times our leaders have traveled to North America, you see how many times actually our leaders visited our neighbors. Very few times. So those past 10 years could have been used to build up the political side of a booming economic relationship. Unfortunately, I would argue that we didn't do that very well.

STOUT: As a result, the U.S. has a bigger diplomatic footprint in Asia.

XIE: Right. I want to add to that, you know, U.S. came back at the right time, just like Richard Nixon came to China in 1972 at the right time. Because increasingly, China was viewed by the Philippines, the Vietnamese and even Japan as a threat. And so they say now they are asking the United States to come back, even though the Vietnamese had a war with the United States for nearly two decades. You know, you have long-standing issues between the United States and many other countries, but now the United States is welcomed back, OK? That speaks a lot about China's soured relationship or failed efforts to really build up a political relationship with ASEAN countries.

STOUT: It's been 40 years since Nixon and China, and China is no longer the isolated, economically feeble nation it once was. The two nations so deeply intertwined. How would you characterize the complexity of the relationship?

PERLEZ: The relationship is not going too well. On the military front, there is a huge amount of distrust. The Americans complain that the Chinese will not be more transparent, although frankly I wonder why they should expect the Chinese to be more transparent. Economically, as Professor Xie mentioned, there are a lot of trade cases that the United States are bringing, and culturally, I think the United -- excuse me, I think China is very afraid of the United States. We know instances where Chinese students were invited to election day parties at the American embassy, and were asked not to attend. And that shows I think a fear of America's democracy and America's style.

(BEGIN VIDEO CLIP)

STOUT: Is China viewing this as a confrontational approach? How is it reading the so-called pivot to Asia?

XIE: The perception is unquestionably very, very clear, that you guys are threatening China.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: China is both an adversary, but also a potential partner in the international community if it's following the rules.

FORMER GOV. MITT ROMNEY, R-MASSACHUSETTS: They're making some progress. They need to make more. That's why on day one, I will label them a currency manipulator.

(END VIDEO CLIP)

STOUT: Let's talk about the anti-China rhetoric on the U.S. presidential campaign trail. Very heated anti-China rhetoric, but now that U.S. President Barack Obama has been reelected, will that go away?

CHING: Well, I'm sure that China is very relieved that Obama was reelected, because he is a known quantity. He's had 13 meetings with Hu Jintao over the last four years. And if Mitt Romney had come in, it would have been totally different, and Romney said he would declare China a currency manipulator on his first day in office. That may not have happened, because a lot of candidates make promises that they don't deliver when they become president, but still, it would have been an unknown quantity for China. STOUT: A lot of differences comes down to economic issues and to trade. Obama has taken a number of protectionist actions and stances against China, slapping tariffs on Chinese made tires, Chinese made solar panels, taking recent action against China at the World Trade Organization for auto subsidies. Is this a sign of more tough on China trade policies to come?

XIE: Yes, I would interpret that as signs of increasing toughness on trade and on currency, et cetera. But you see, those are the economic front. I think on the political front and on many other aspects, I think the fundamentals of this relationship are sound.

I'll give you some statistic. Every 26 minutes, there is a flight across the Pacific. Every day, 10,000 people travel to each other's country. Now, just look at this extensive flow of people for cultural, educational, economic purposes. So it would be very hard for me, at least, to imagine these two countries will go really to an armed conflict.

Now, about Barack Obama's reelection, I think, yes, there was a big moment of relief, but that moment was short-lived, because Barack Obama went straight ahead to Myanmar. I think that was kind of a political -- perhaps the biggest political shock for Chinese leaders.

STOUT: This is significant. I want to get Jane's thoughts on this, because I know she's covered this very much in-depth. So his very first destination after reelection, he chooses Myanmar. To what degree was that a direct challenge to a rising China?

PERLEZ: Oh, absolute challenge. No question about it. And I think it was very interesting, because rather than rhetoric, Obama acted. He went somewhere, and he went right to the country where China has had unquestioned authority for many decades, and where China has big infrastructure projects and where China was basically the only friend that Myanmar had, and relied on, almost entirely, for its economic well-being. So China is being quite quiet about Obama's visit. We'll just have to see what they make of it.

STOUT: How can we read that silence? I mean, is China viewing this as a confrontational approach? How is it reading the so-called pivot to Asia?

XIE: Well, you see, pivot to Asia or rebalance I think is widely perceived in China among my colleagues and some of the government affiliated think tanks as an outright effort by the United States to strategically encircle China. Americans like to use the word "hedge" against the China (INAUDIBLE). Because you look at the way that Americans are deploying all these diplomatic resources and to say nothing about this 2,500 Marine Corps in Darwin. I think the message is clear. We want to build up our diplomatic and military forces just in the case something terrible happens that disrupts the stability and security in East Asia. So I think the perception is unquestionably very, very clear, that you guys are threatening China.

STOUT: But U.S. has strategic allies, long-term strategic allies in the region, and the future of economic growth is in the Asia-Pacific region. So why that perception from China, that this is threatening, that this is confrontational, that America's pivot to Asia somehow encircling China?

CHING: Because it's being presented in military terms. China, I think, sees this as quite threatening. And I think that it's quite necessary for the U.S. to present this in economic and other terms, not just military terms.

STOUT: Economically, China has the edge in the region, especially in Southeast Asia. You've seen it firsthand.

PERLEZ: Absolutely. China has huge trade with all of the individual countries in Southeast Asia. I think it has bigger trade with all the countries in Southeast Asia than the United States, except the Philippines, which of course is a very close ally of the United States. And you just see China as a cash power in Southeast Asia. They are spending billions of dollars on roads and rail, through the countries of Southeast Asia that will enable goods to come up through China and then back down through China and will knit the whole region together. And I think in a few years, a decade or so, Southeast Asia will become China's sphere of influence.

(BEGIN VIDEO CLIP)

STOUT: Xi Jinping will become the next president of China. Your thoughts on how he will lead the relationship forward.

PERLEZ: I think Xi is going to absolutely drive China's interests, and that's not always in the interests of the United States.

I don't think he's going to be such a friendly power as some people may think.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

STOUT: Xi Jinping, now the general secretary of the Chinese Communist Party, will become the next president of China. Your thoughts on how he will lead the relationship forward?

PERLEZ: I think in the United States, among those few people who really think about it outside the policymakers, this maybe false paradigm that Xi Jinping, because he went to Iowa in 1985 and because he went to Iowa again in February, really understands the United States and is really interested.

I think that this is not quite the picture. I think that Xi Jinping obviously is much more confident or portrays a lot more confidence than Hu did, and therefore is more interesting and seems to be more compatible to Americans, but underneath it, I think, Xi is going to absolutely drive China's interests, and that's not always in the interests of the United States. They do not have shared interests. And I think he is going to drive very hard on the Japan against -- on the Diaoyu Island issue, and on the South China Sea, and on the military buildup, and in Southeast Asia, and he's going to continue the relationship with Latin America, where China has very strong economic interests, lending a lot of money to lock up oil. I don't think he is going to be such a friendly power as some people may think.

CHING: Well, I think every Chinese leader is just going to put China's interests first. They are not going to put American interests first. But no, as has been widely reported, Xi has a daughter at Harvard, and Li Keqiang, who is going to be prime minister, also has a daughter in Harvard. And his wife is an expert in American literature. So, these are people who I think understand the U.S. to some extent. And the fact that they sent their children to school in the U.S. shows that they have positive feelings about the United States. That is, they don't think the U.S. is necessarily an evil country. And of course, being the leader of China, whoever it is, is going to put China's interests first, but I do not rule out the possibility of working with the U.S. whenever there is an opportunity to work with the U.S., when our interests coincide.

STOUT: The Chinese Communist Party is facing a number of threats, and these are threats that are undercutting its legitimacy. And I know you've written on this point. How tempting is it for the party to play up nationalist fervor or even anti-U.S. sentiment in order to boost its own popularity?

XIE: Well, I think it is very tempting, especially for the new leadership, because after Mao and Xeng, there is no leaders who can really boost impeccable nationalistic records, so they really have to whip up this nationalistic sentiment to shore up domestic support. However, for the new leadership, I think his no. 1 agenda would be anti-corruption, cleaning up the party itself. So I guess he would resort to these foreign policy crises or toughness. Sometimes if there is a big scandal, there is a looming social unrest, he would try to distract the domestic audience, but otherwise I would expect him to tone down a little bit on foreign policy and take probably two or three years to really show the Chinese people that here are a number of corrupted people, high-ranking officials, we are serious about tracking down this. And after that, he will probably pay more attention to foreign policy.

So I think my argument will be, he will pay more attention to clean up China's own domestic politics before he really, I'd say if he really wants to, take on the United States and Japan.

CHING: I agree with that. When Xi Jinping came out to introduce the members of the standing committee, he did not mention foreign policy at all. Didn't say anything about international relations. But I think that's because he realizes that China's most serious problems are domestic ones, and he is going to have to focus on those first.

STOUT: And the leadership changes in both countries, in China and in the U.S., the focus is on pocketbook issues and sorting out domestic issues first.

CHING: Right, right.

PERLEZ: I think there is a good chance the United States will sort of retreat into a not an isolationist mode, you can't do that anymore, but will retreat a lot into itself, and its gaze will be inwards after 10 years of very trying war. I think the United States is weary of experiences abroad, and will come back home for a few years at least.

CHING: On China, a lot has been said about China's budget for domestic security being bigger than the budget for external security, defense. And I think that's a reflection of the actual problems the country faces. The country faces many more problems domestically.

STOUT: Your thoughts about where the relationship will go next. Do you believe that U.S. and China can coexist peacefully in the next decades ahead? And Tao, we'll start with you.

XIE: I am more optimistic than many observers of U.S.-China relationship, because again, like I said, the fundamentals of the relationship are sound and they are increasing. The flow of people, economic cooperation, and increasing visits and exchanges between the top leaders. But in the short term, again, we have to look for, no. 1, whether Barack Obama will sell arms to Taiwan in January. Second, whether China will continue to block U.S. efforts to resolve the crisis in Syria. And no. 3, about Iran. So I think in the short term, not quite optimistic about a peaceful cooperation between the two countries, but in the long term, I'm more optimistic than many other scholars of U.S.-China relationship.

PERLEZ: For the reasons that Professor Xie mentioned, I think it will be quite tense in next year. I think that the United States will have a lot to deal with in the Middle East, will not have that much time with China, but when it does have time, will not be that friendly, and I think there is a lot of sentiment in Washington, fear, perhaps unfounded, about China's military growth, and that is going to color the relationship. And at the same time, the United States is very weary of China's economic growth, while it is at a standstill.

CHING: Well, I think the Obama administration when they first came in 2009, was very eager to have a good relationship with China, thinking that it can solve problems with China's cooperation. And I think it has been very badly disappointed, and I think the Obama administration is going to have a much more realistic viewpoint of what China will be willing to do and able to do.

STOUT: Frank Ching, Jane Perlez, and Xie Tao, thank you very much for an insightful discussion on the U.S.-China relationship.

CHING: Thank you.

PERLEZ: Thank you.