At the 2019 Aspen Security Forum, National Committee President Stephen Orlins and Member Joseph Nye discuss China’s long-term plans and implications for U.S. economic and national security. Recorded 7/19/19.

TRANSCRIPT

Joseph Nye: I'm Joe Nye, a professor at the Harvard Kennedy School of Government, attending the Aspen Security Forum with my colleague, Steve Orlins, who will introduce himself in just a minute. And both of us have been caught up in one of the topics. It's really been top of the agenda here at Aspen this year, and that's China, the future of China and, American relations with China.

Stephen Orlins: And I'm Steve Orlins. I'm President of the National Committee on U.S.-China relations, and I got myself here so I could have a conversation with the legendary Joe Nye. So I'm thrilled to be here, and obviously, we've been talking a lot these days about the rise of China, and what it means for U.S.-China relations.

Nye: Well, Steve, you and I both signed a letter with 100 other co-signatories to President Trump that says, "There's a danger in overdoing the China threat and calling it a new Cold War." We do have real problems with China. Many of the things that China has done deserve a tough response, but both of us signed this letter, which said, "The danger in Washington is pendulums swing too far."

And maybe the pendulum was a little bit too much on the soft side before, but if we get ourselves into something where we convince ourselves that there's a new Cold War, we forget that there's some areas where we need to cooperate with China, like climate, for example. At the same time, there are other areas where we need to be tough on them, including trade. Tell me why you signed the letter, and I'll say a little bit about why I signed.

Orlins: You know, I signed it because I believe the narrative in Washington is creating policy which is damaging to the United States. I think the policies that we've adopted based on the exaggerations that you talked about are actually hurting the American people, hurting American business, hurting American employment.

I also think...you know, you and I are old enough to remember when we first went to Asia. And at that point in time, 250,000 Americans had died on the battlefields of Asia in the prior four decades. Since we established diplomatic relations with China, no Americans have died on the battlefields of Asia. Washington appears to have lost sight of the fact that we really have had peace and stability because of this relationship. Does China deserve criticism? Absolutely. But is it grossly exaggerated? I think it is. So that's why I signed.

Nye: Well, and I signed because I fear that we were losing the sense of a center for our policy. We were worried so much about China becoming the demon that would overwhelm us that we're exaggerating some of the threats and forgetting there are other areas where we had a good reason to cooperate.

I think China is at fault for a lot of the current problems in U.S.-China trade. I gave a talk in Beijing in January, and I said, "President Trump is like a man who came along and threw gasoline on a fire, but it's President Xi Jinping who lit the fire by trying to tilt the playing field through the course of intellectual property transfer and so forth.

So what we need to do is, in the proverbial sense, is walk and chew gum at the same time. Be tough on China when we need to be tough, but at the same time, realize there are areas where we both have the benefit of cooperation.

Orlins: I agree with that, but what I think we should be focusing on the cooperative rather than the conflicting. We should be focusing exactly on climate change, on anti-terrorism efforts, on pandemics, on the fact that if China's economy collapses, it's bad for the United States. If the American economy collapses, it's bad for China.

We have all these common interests, and the Washington narrative today is just to focus on the conflicting interests. And I think the letter raised that. I was pleased to see that after we signed, and it was published in The Washington Post, we've seen more than 50 other prominent experts in U.S-China relations sign it. So it's now up to 150, and growing, and it will grow more.

Nye: Well, beyond the letter, we ought to talk a little bit about what's happening in China. You gave a very good presentation at a panel on why China's growth rate is slowing down. Officially, it's supposed to be 6.2%, but you said it's probably much less than half of that. It may be closer to zero because of this overwhelming emphasis that Xi has on Communist Party control. And that has taken away this vibrancy which does come from the private sector. Why don't you say a little bit more about that?

Orlins: So after I left the esteemed institution which you teach at, I spent three years in the State Department, and 40 years ago I moved to China. And over these 40 years, I've watched the private sector be responsible for the economic miracle that is China. And what I've seen over the last three years is a shift away from supporting the private sector, to supporting the state-owned sector just for the reason that you said, that the Chinese Communist Party has more control over the state-owned sector, so they're willing to pay this price of economic growth in exchange for additional control.

Ultimately, the bargain is the Chinese people expect economic growth and prosperity. And if that fails, we're going to see problems in China. So, you know, I'm optimistic in the end because I think that when the data is crystal clear, and it's becoming crystal clear, the Chinese government will, like a tanker, slowly move towards supporting the private sector again, to supporting small and medium-sized enterprises, and to opening more to foreigners and foreign investment. I think that we're beginning to see green shoots.

Nye: I hope that's right. There's another scenario which I've discussed with some of my Chinese friends, which is, the Chinese Communist Party is a Leninist party, it wants total control and it basically gets its legitimacy from the high rate of economic growth, which has made hundreds of millions of Chinese better off.

Orlins: Absolutely.

Nye: It also gets legitimacy from nationalism, "Make China great again." The problem is, as the economic growth rate goes down, they may have to increase that nationalistic quota to keep that legitimacy. If they did economic reform, that would be the better solution. If they don't, China may actually be tougher for us to handle. What do you think of that argument?

Orlins: I think if they don't do economic reform, and there's a lot of that...you know, six years ago, we had the Third Plenum of the 18th Party Congress, which really laid out an economic path for China to reform. They just didn't follow it. If they fail to reform, it's going to be tougher for us, but it's going to be much tougher for them. It's going to be tougher for the leadership of the Chinese Communist Party.

And the one thing since my days in the State Department...these guys are really well trained. You know, the Kennedy School has trained a bunch of them too.

Nye: That's right. Liu He was one of our graduates.

Orlins: Absolutely, and I spend a lot of time with him now. And they are extremely well prepared for their jobs. And to repeat what I said, when they see the data, they're going to begin to shift. And that's what they've done historically. You talked about the pendulum swings in the United States. We've seen them in China.

Nye: Right.

Orlins: I've lived through terrible periods in China, and I've watched it swing back.

Nye: With all that said, and I don't disagree with that, let's see if we can find some places where we can disagree a little bit. I'm not sure we can, but...for example, I think that President Trump is right to hit hard on Huawei. I don't think we should allow Huawei, the telecommunications firm, to build our 5G networks, which are going to be so essential for the edge computing to the Internet of Things, because it will give them the capacity to update that software anytime with a message or malware, which is ordered by Beijing, by the political authorities.

Now, I heard a Huawei representative tell a meeting in Europe recently that, "We're just an ordinary private company, don't worry about it. And you're just being protectionist against us." But somebody on the American side said, "Well, wait a minute. You don't allow Google to operate in China or Facebook for that matter because of security reasons. What? There's no reciprocity here. China wants to have its cake and eat it too. Do we agree or disagree on that?

Orlins: I think on the 5G, we agree. I think on the putting them on the entities list and stopping Qualcomm and others from supplying with them with chips for their handsets, I disagree. I don't think we should be passing a death sentence on Huawei.

And I've noticed since the Huawei sanction started, the Chinese positions on a whole host of issues have hardened. So I'd think it's probably countered. The 5G I think is probably right. You're probably right. But on these other supplying of chips, stopping American companies from doing business, stopping Google from providing an Android system to Huawei, I don't think that's necessary or good.

Nye: Well, that's again a case of, can we get this pendulum somewhere in the middle rather than swinging too far one way or the other? Another one that comes up and it came up in the session yesterday that I was on, on great power diplomacy, which is, can we really cooperate with China when they are using surveillance technology to basically capture a million people in Xinjiang, Uighur citizens?

It's a massive human rights violation under our eyes. Some people said, "Well, how can you...we should criticize that." I think we should. But, can we criticize that and also cooperate with them, I'd say, on trade, at the same time?

Orlins: I think we have to. I don't think it's a choice. Should we criticize their activities? Absolutely. And I think by branding them as a strategic power, as a rival, as a revisionist power, it makes our criticism less effective. But we need cooperation on climate change, on pandemics, on terrorism, on economic crisis, on a whole host of issues, that if we stop cooperating with them, the lives of American people are going to be worse. The lives of ordinary Americans. And that's what the administration loses sight of. These policies are hurting ordinary Americans, whether they're in Houston, Iowa, or California or New York. It's bad.

Nye: I'm glad to hear you say that because I have a book coming out at the end of the year called, "Do Morals Matter?" And its precedence is in foreign policy, from FDR to Trump. And my argument is, you can have cooperation with others, even while you can criticize their human rights perspectives and things that they're doing, which we find offensive. In other words, we can walk and chew gum at the same time. Other people say, "Well if you try that with China, the Chinese will push back. You just can't get the cooperation if you're critical of them on these human rights and morals issue." Do you think that's right or not?

Orlins: You still can get cooperation. I think we have, over the years, been…President Obama was critical of human rights, President Clinton linked MFN to human rights. It wasn't ultimately a successful way of doing it, but we had cooperation on a whole host of issues at the same time.

There are people...when we criticize China for human rights, China is not a monolith. There are people who sit there and go, "Mm-hmm." People in China, I'm not talking about other people, who sit there and go, "Yes." What we've lost sight of is that China is not a monolith, that there are lots of folks, some who have gone to the Kennedy School, some who have gone to other schools in the United States, some who have never set foot in the United States who are pro-reform and opening. And you need to come up with policies that enable them to win the battle.

What we're doing now is we're enacting policies which are forcing them to lose the battle, which are letting the hardliners, the anti-Americans in the Chinese government, win the political debates. And that's bad for the American people, it's bad for the Chinese people, it's bad for U.S.-China relations.

Nye: Well, that's a good point on which to wrap up, but also we've tried to illustrate some of the issues that have been debated here at this Aspen Security Forum. And we haven't got all the answers, but it certainly has been an interesting time to be here.

Orlins: And what a pleasure to be here with the legendary Joe Nye.