Transcription
Welcome to our 8th annual future of US China conference. This year's theme is a shifting global order. And shifting it is, from Venezuela to Greenland, and all the headlines that are coming out of Davos. But today, we're going to focus at on the relationship at the center of it all, the United States and China.
We are honored to welcome our chair Gary Raichel, our honorary chairs Jack Wodsworth and Ken Wilcox, global trustee Fritz Demopoulos, advisory council chair Ambassador Scott Marciel, members of our board and our advisory councils, and our Asia Society community. We have colleagues joining us from New York and our sister center in Seattle, both in person and online, Zoom live. We also welcome our consulate representatives. Today, we have with us China, Japan, Korea, and Canada. I'm Margaret Connley, the executive director of Northern California and Seattle. And on behalf of our entire team, welcome.
Many of you joined us last night for our pingpong reception with the China Consulate and Consul General Jang. And we had new US national players join us, and that was marking the 55th anniversary of ping pong diplomacy. A special welcome to Judy Horrost. I'd like her to wave her hand. She's seeing in the back there. She was the youngest player at 15 years old to play on the 1971 national team that went to China. So, yes, please, let's give her a hand. She's a symbol of people-to-people exchange, and she has many wonderful stories. So, I do encourage all of you to try to get stories out of her before she has to leave today. And thank you, Judy, for playing with us last night.
A quick note, all of our public sessions are on the record. We're recording, and they are going to be posted on our websites. Please take a moment to silence your phones for our recordings. All right, let's get right to it. Please join me in welcoming the chair of Asia Society Northern California and Seattle, founding managing partner of Chieing and Asia Society Global Trustee, Gary Rajelle.
So, good morning. Um, so a couple personal housekeeping things to get out of the way quickly. So, number one, I also turned 70 this year, the same way the Asian Society does. I think one of us is aging much better than the other. I'll let you guys decide which one that is, but I have a I I think we know which one that is. And the other thing is is that if the 49ers had won last weekend, I'd be proudly wearing a Joe Montana jersey. However, since they didn't, I'm proudly wearing my Seahawk socks. So, just so you guys know where the uh where the uh loyalties lie here.
Um, last night was interesting because it it made me reflect on the fact that the Olympics are actually a good way to think about what's happening in the world today. Um, you clearly have some countries more powerful than others, but everyone gets to participate. Everyone has the same court. Everyone has the same length of swimming pool. You don't necessarily have the same training. You don't necessarily have the same resources, but everyone, when you start the sport, starts at the same place.
And when I was in China in November, we had a very intense week. um about a dozen uh meetings with different government officials, uh folks from Chinua University, who were very kind to host us for an afternoon. And one of the one of the big takeaways for the trip was we wanted to make sure that people in the US start to understand China as it is today, and not China as it was five or six years ago. Less than 10% of Congress has actually visited China in the last six years. That's a problem. And I think that our trip, uh Steve Hadley was the co-chair of the trip. Um, Steve from uh uh uh the Atlantic Council. And so the big takeaway was just how rapidly China is evolving. And that's having profound impacts across the globe.
Um, one of the other takeaways was how we really are headed now for a multipolar world. Um, I had long meetings this week with the council generals of most of the other um folks in Seattle, most the other countries in Seattle, and they are all now looking at the US saying, "Okay, we have to fend for ourselves more than we might have thought we had to do in the past." And they are um one of the major things that happened in India last year that got very, very little coverage was India removed all restrictions on foreign investment, operation, and management of its nuclear nuclear program. So foreign investment will now be able to come in and participate at every, every single level of India's India's nuclear program. That is unprecedented for literally any country in the world. And I think that the fact that they did that, there's now been $80 billion of commitment from the four largest tech companies. Bill Gates is going over to hold a conference to talk about terror power and some of his initiatives. So again, would that have happened without the pressure that we see between the US and China and how that's affecting a lot of other countries? I'm not sure.
Um, the other the major pillars, obviously, this multipolar world. Trade is one. Trade has gone through a rather interesting transition over the last 12 months in terms of being weaponized in an interesting way. The responses the rest of the world has um initially were very, very soft, very gentle, and now are becoming more forceful. And I think that that's probably again, a good thing. Countries need to look after their own self-interests.
Um, I think another area is finance. The Middle East has stepped forward on finance in a way that is unpre again, unprecedented. We're talking trillions and trillions of dollars going in, not to oil, not to the traditional energy, but going into solar, going into nuclear, and certainly going into everything related to AI. Um, there'll be a lot of discussions around AI later in the program. So I'm not going to dwell on that today. But technology again is one of these global multipolar pill multipolar pillars. And one of the things that I also feel is an obligation for us to discuss as the Asia Society is how do we make sure that this next generation of AI or next generation of technology doesn't continue to reinforce this have and have not situation we have around the globe. Five billion people on this planet do not have access to anywhere near the technology, whether it's for cooking, whether it's for heating, whether it's for lighting. They don't have access to that, and we can't continue that. And the Asian Society actually has a very interesting role to play. We'll talk about that a little bit later.
Asia Society excels in a multipolar world. Right now, Asia is far more complex and challenging than it had been before, as it's developing its own voice in many different ways. Um, I was in Indonesia. We met with some government officials there. And again, I don't know if people understand what had happened, but a year ago, the US government forgave $35 million of debt that Indonesia had. And that money was then dedicated by the Indonesian government to wildlife, fish, fishery preservation. Interesting swap. The US giving up a debt repayment in exchange for protecting some very, very rare and uh uh valuable fisheries and uh and reef systems. So again, those kind of interactions, I think, are going to be happening more and more. The Asia Society mission has not changed. It is still to promote the interaction and understanding between the US and the peoples of Asia. It's just again, it's becoming more challenging, and it's certainly becoming um more necessary as we look at the world today.
One of the levels of cooperation that we're looking at are many country-to-country uh uh areas of uh cooperation, again, to use the same word that Asia Society is either at the forefront of or is certainly supporting. One is cure for cancer that Jing Chen out of the uh uh Center for China Analysis is spearheading. Kevin Rudd also was instrumental in starting that. Um, several years ago, we had universal acceptance in all the meetings we had in China. Whether it was Hulifong, whether it was Su Tian Kai, every single person accepted that that is something the US and China should work on. And it's simple. It's just reducing the friction of getting drugs to market. So right now, we have a system that forces you to do trials in both countries. You waste two to three years. The trial cost in China is lower. Recruitment is lower. It has a larger naive population for a lot of different formulations. So this is something that if you think just about small cell lung cancer, you could reduce by three to three and a half years the time it took for a drug to get to market. That's two million lives in those in these two countries. So again, if you think about what's good for the world, this kind of cooperation between the US and China is clearly something that's good for the world.
We now have the US Olympic team and the Chinese Olympic team discussing mental health. 45 countries have visited the US training center in Colorado Springs to study what the US is doing on mental health for its athletes. I did not expect China to be one of them, but China has reached out. We've now had multiple meetings in that area because China has finally started to admit, and it admitted freely in the meetings we had, that it has a mental health problem. And this is something again that openness and then the ability to say, "Well, we can work together, we can start to partner on this." I think that's incredibly valuable.
Um, we talked about the fishery situation. I think India is really now trying to step forward and be far more of a tent pole, if you will, for the developing south. Um, I think it views its role as as a country that does not have the capital resources to compete with the US and China, because the world is really moving from low labor cost competition to cap low cost of capital competition. Two countries, the way the world exists today, win that hands down. One's the United States, and the other is China. So I think India is looking at how do you change the rules of the game to actually put itself forward and attract more capital across a broader range of countries and reduce the cost of competing, partnering, working, or cooperating with um the US and China.
Um, US Asia Society NorCal and Seattle have had major programs across all the global platforms. We're working on one with uh uh Qatar on Islamic art. um again, that would be in multiple centers. So I think that again, what the Asia Society is doing now is really stepping in to a point at a point where is both necessary and very compelling.
Um, finally, Kevin Rudd is coming back um as president of the Asia Society. I believe it'll be right at the end of March. Um, some folks were asking me, "Why is he coming back?" And I think when you talk to Kevin, number one, he really loves the Asia Society and the mission. And he was a meaningful um uh piece, a meaningful energy behind putting the mission more into the policy institute, the Asia Society Policy Institute. He's also very interested in arts and culture and really appreciates the work that we're doing in Seattle, which is which has been uh which has been growing leaps and bounds thanks to Margaret and her team. So again, Kevin's coming back. It's the love of the mission. It's the love of the institution, and it's also a great platform for him, and so we'll look forward to having him back in the fold and uh see what that brings.
So with that, those end of my comments, and uh we'll start session one, "The World in Transition: US-China and the Shifting Global Order." Our speaker, first speaker, will be Julian Gvertz. So he's an author and senior research scholar at Columbia University. He served as formeral former senior director for China and Taiwan Affairs on the White House National Security Council. Julian is a former senior advisor to the principal deputy national security advisor and deputy China coordinator at the State Department under President Obama. And Julian will take a question or two when he finishes his comments. After Julian, Tim Straford will speak. Tim is senior counsel at Covington and Berling. He's also chair emeritus of the American Chamber of Commerce in China. Tim will respond to Julian's remarks. Let's please welcome Julian to the podium.
Thank you VERY MUCH. HI EVERYBODY. IT'S great to be with you. Um, and I'm particularly thrilled uh to be with a group that has done just so much for American understanding of China and Asia over the years. I'm working on a on a new book now on the history of US-China relations from the end of the Cold War to the present. And one of the signal uh takeaways from that book is that the Asia Society was was at the center of that history. And it is remarkable for me in my mode as a historian to uh go back and see how many of those key moments uh you and your colleagues and your predecessors were a part of. So delighted to be with you all. Uh I'm in from from New York City and we'll try not to bring too much of a east coast uh gust of cold air.
But I do want to talk about what I think is is a complicated and challenging issue that's on many folks minds, which is really one of the great unanswered questions of this second Trump administration: how the outright rejection of the existing international order by the United States is affecting China's international strategy. We know that for decades, China has adjusted its own thinking. China's leaders have adjusted their own thinking in relation to their perception of the United States and of how the United States was interacting with the international system. That, of course, is happening again today.
Now, this is an extremely knowledgeable group. group. I don't need to rehearse too much of of the basics, but I will say it is remarkable to see uh I think for many of us a a situation in which the United States quite explicitly describes the international order, its rules and norms, as a problem for the United States. Of course, these are systems that we, the United States, largely uh played a role in building and certainly played a consistent role in maintaining. Um, but we've seen quite consistently from, for instance, the secretary of state uh, you know, description of this uh international order as "obsolete," um, even as a "weapon being used against us." So, you know, we also, of course, have seen actions that demonstrate uh quite clearly uh the view of the the international rules and norms uh that were always imperfectly followed, but uh that candidly, I think, you know, now the extent of the direct rejection is in some ways unprecedented.
Last year, in early 2025, I think Beijing's response to this new situation was quite measured, quite cautious. Uh, there were, of course, periods of dramatic escalation between the United States and China, tit-for-tat tariffs, uh unprecedented export controls, but in the global uh strategy that Beijing has pursued, basically an approach of sitting back, watching, seeing how things played out, and acrewing benefits from what the uh Trump administration was doing vis-à-vis US allies, alienating some of those partners. partners, and of course withdrawing from international institutions where Beijing uh also has an important role.
But I'd like to suggest to you today that late last year, that period of caution came to an end, and that this year, as we look ahead to 2026, uh we should expect that uh caution to uh be something that that Xi Jinping and other Chinese leaders see as uh having a phase that passed, and now is an a moment to take advantage of the opportunities that exist. So I don't want to talk too much about US-China bilateral relations today, but but I will just say that I because I, you know, I know that there'll be a lot of discussion of that throughout the day, but the meeting in South Korea between the two leaders that happened uh late last year is a temporary dant, and I think maybe this will be something that folks debate today, but to my mind, it is very much not a structural shift in the competitive dynamics of the relationship. Those persist.
Uh, but both sides, for their own reasons, have decided that in this coming year, that bilateral direct confrontation, they want to put a lid on. But they're also both behaving as if China, in many domains, has the upper hand. Uh, as you know, you you see this rhetoric from uh the US president uh quite directly. And so one thing I think for all of us to keep in mind as we assess the global dynamics is that so often that interplay between the bilateral US-China relationship and each country's international strategies are premised on the idea that there's a lot of tension in the relationship. In a period where superficially that tension is diminished, uh, some of the global dynamics change as well.
Just to give you a few examples of what from late last year gave gave me and other analysts the sense that uh China's international strategy was updating. One, I think, important case, uh, which some analysts poo-pooed or dismissed, but to my mind was quite significant, was the meeting of the Shanghai Cooperation Organization that Xi Jinping hosted uh in China. The the most memorable visual from this meeting, some of you will have seen it, was the image of Xi, Putin, and Modi clasping hands. And I think this, these are three very savvy politicians uh who know the cameras are on and who know precisely the image of, as Gary said, a multipolar world, uh, a world in which the United States is not present, nor uh, at least on that day of the week, needed, is very much the image that they were trying to project.
But it's also no coincidence that a day or two later, uh Xi Jinping presided over a military parade in central Beijing to commemorate the uh anniversary of the end of World War II. Uh, and uh, of course, in this case, you know, World War II is globally the the birth of so many of the post-war institutions. Uh, that was very explicit in the Chinese messaging that this was about a direct lineage uh from China's role in World War II to its current uh increasing leadership role in international institutions. But of course, there were also some eye-catching aspects to this as well. Not simply the capabilities on display, but the decision to give pride of place to uh Kim Jong-un. And I think there to send a clear signal that Beijing is uh willing to give pride of place and to reward leaders who are symbols of resistance to the United States in this period when, candidly, China itself, China's leaders themselves, have begun to feel that their very tough uh resistance to US pressure has been effective for them.
But we've also seen in this year already some very interesting data points uh toward what this more assertive uh international uh sort of opportunity gathering will look like from Beijing. I'm sure many of you saw Prime Minister Mark Carney of Canada went to China, and it was not simply, of course, that he, you know, made a relatively small trade deal with China, or that he uh after a period of real deep freeze in that relationship, uh restarted sort of normal uh day-to-day ties. But of course, he very specifically talked about this, he Carney, as part of "a new world order." And he not only did that, but he then proceeded almost immediately to Davos, where he gave a speech that I I think all of you should see if you've not already, where he laid out his description in greater depth of what this new world order uh entails and what the historical rupture of this second Trump administration means. These ideas are obviously interrelated.
Uh, and of course, from Beijing's perspective, this is is very good news because this shows how its own bilateral relationships with countries that have been longtime US allies have relied on the US for a long time, in the absence of that certainty about their relationship with the United States, are themselves going to actively contribute to creating a more multipolar world uh and try to get others on board. The point of Carney's speech, in some sense, was to give uh tough love to the other leaders there at Davos about the future as he sees it. Prime Minister Starmer of the UK and Chancellor Schultz of Ger I mean, sorry, uh excuse me, uh Chancellor Meritz of Germany are going to be next up in going to China over the the coming weeks. And I think we should expect that they will use similar messaging to what we've now seen from Prime Minister Carney.
And stepping back for Xi Jinping, for other Chinese leaders, this really is a very rare but very significant opportunity to establish China as the fulcrum of an emerging multipolar world, and to do so not by having to take head-on the United States and force the United States out of its leading position in the international system, but rather to exploit Trump's rapid and willing abdication of Washington's role in that system. So even if the United States no longer sees these institutions as having uh strategic value to Washington, Beijing certainly certainly does. Um, and folks here will be able to to describe uh in greater detail why that is.
Now, some may say we're only one year into Trump's second term. This is premature, but I I would argue that in fact, uh the greater the greater risk is of underestimating the scale of the change that we have already seen one year in. Uh, there's a fascinating uh survey from the European Council on Foreign Relations that surveyed both European countries and a range of middle powers, India, Russia, Turkey, all of whom expect China to have much more influence over the next decade, and who increasingly say that they will refuse at any point in the future to make clear alignment choices, to have to choose. And this uh is is a reality like European and Canadian hedging and strategic autonomy that I think the United States should expect to deal with over the long haul. They may not be new trends, but they are intensifying in a way that I think will uh not be easily reversible in the future.
So, I've called this new era in an essay in Foreign Affairs "mercenary multipolarity" because, as we all know, it's an era in which short-term transactional deal-making is replacing long-term cooperative uh partnerships. And I think we should expect this to be the new norm. It's not simply uh the Trump administration's actions that will make that the norm. It's also in a period of of transition to some extent uh a reasonable strategy for countries to pursue. They can't be certain what the long term will look like. So making a short-term deal with one or several great powers is really uh the the only uh the only strategy that they can pursue. And Beijing will continue to work to be seen not as a disruptor, but as the defender of the international order. This, as you all know, is a long-standing effort. Uh, but now the messages from Beijing do I think land very differently, even if the lines are the same. Premier Li Tang said at the UN, "China has all along acted as a staunch defender of world peace and security." And I think for many in the room, the way that a statement like that, which has been uh said annually for for more than a decade, the way that a statement like that lands is fundamentally different in this in this moment.
Beijing rolled out a global governance initiative, as some of you will have seen. This is an international order kind of um correlary to its global development, security, uh and civilization initiatives. And I think again, the tendency among some can be to dismiss these initiatives as uh, you know, sort of talking points, but in fact, there's really interesting research from the scholars uh Sheena Chestnut Greatton and uh Isaac Carden showing how the global security initiative, because it is a signal to the Chinese bureaucracy to ramp up its efforts in these kind of non-traditional security partnerships, actually has led to uh, you know, concrete new relationships to be formed. And uh, you know, I think we should expect that to continue, including in the global governance initiative and in its its its related areas.
To just wrap up and then to take a couple questions, um, I do want to say I think for many countries around the world, watching the US-China dynamic is one of their highest priorities. And ahead of President Trump's planned visit to China in April of this year, it's clear that he, the president, is focused on the optics of his relationship with Xi Jinping and striking a bilateral deal. Um, other countries watching this closely, though, I think have received quite a surprising and clear message from the president after he was asked about uh the Canadian deal uh that that Prime Minister Carney reached. President Trump said, "If you can get a deal with China, you should do that." Other countries, I think, will see any US-China agreement that attempts to reward or that that seems to reward China's resistance to US demands as further entrenching their view that not only do they themselves need to pursue a deal with China, but that in fact, China is gaining influence relative to the United States.
Final note, and then time for a couple questions. I will just say I think despite what I have said and the confidence of the predictions that maybe you've heard today, I think we should be very humble about knowing where this will lead because the story of uh the past year has been one of, candidly, I think, clear priorities from the administration in DC being pursued as they promised to. But we don't know how well China's own efforts to take advantage of this moment will work. It's very possible to imagine, for instance, that some countries, as certain European leaders have called for, will see their priority as reducing reliance on everybody else, not simply on hedging against the United States. Sweeping technological change, as we'll be discussed later today, adds further to this um uncertainty. And so I'll just conclude by saying that a more fragmented and anarchic world is I think what we are headed into. And and that is not a world that, from my perspective, China will necessarily find to its liking. And and I don't think it's a world that we in the United States will will be uh too happy about either. But on that cheerful note, uh, I'll take your your questions for just a couple minutes. Thank you all.
Okay, so I think we have a mic a runner if people want to raise their hands. Um, and I'll do my best to see you despite the Okay, I think we have someone over here. And if you don't mind, just uh briefly introducing yourself and and offering a short question. Thanks.
>> My my name is James Young. Um, speaking of the multipolar world, do you think Ashford's book, "First Among Equals," is a seminal work that uh gives the illustration of the multipolar world in the next few decades? And uh speaking of the rise of global south, do you think the US will continue its illusion of drawing India into its sphere of uh influence as Ambassador uh Purdue did by convening the Quad ambassadors in Beijing?
>> Let's take a few questions just in the interest of time. Any anyone else? Uh, yeah, we have a gentleman over here and Okay.
>> Great. Sorry. Yeah, just here in the front. Hi, Dennis Simon from Quincy Institute. Uh, you use the word, you know, Trump abdicated the US role. Um, but in effect, if you look at the nature and fracture in US society, uh, Trump only speaks for half of the American population. Uh, we talk about foreign policy at the "what's edge." But in the past, um, uh, there is a question to what extent can Trump really re-engineer the entire US foreign policy posture uh without some kind of pushback uh across the system, either from think tanks, uh, in other words, non-governmental entities, or from the entire Democratic party that somewhere is lurking in the government behind the scenes that might one day decide to have a voice and contest where He's actually trying to move the United States? And the Europeans, in particular, understand the fractures in US society, and I'm surprised that they have either accepted Trump's dismantling or his acquiescence to it when in fact they don't they're not even um appealing to groups in the United States that might contest this kind of fracturing.
>> Great. Okay, I'll take those two questions and and we'll we'll stay on track. So um, in a sense, uh, you know, I think there's a relationship between the two, but first, uh, let me talk a little bit about multipolarity and and India. You know, I think the uh an initiative like the Quad is something that I think has always been focused on a set of partners who have different international strategies, different foreign policies, see their national interests quite differently, but do have concrete areas where they want to work together. And so from from the perspective of of India, obviously, in this administration, uh, unlike in the the Biden administration, the approach to India has been extremely punitive. Very high tariffs, a lot of pressure, um, and uh not a lot of interest in finding ways to work together with uh, you know, a major Asian power that has so much to to offer the world, really on on any any terms you take it.
Uh, that, of course, is one of the factors in the effort by uh Prime Minister Modi's government to uh warm some of their relations with Beijing because, uh, again, they assess that not only do they have a long-standing commitment to a strategic independence posture of non-alignment, but that in fact, in this moment, uh, they need to balance some of those relations, even though, of course, as folks in this room will know, uh, there's also a tremendous amount of skepticism about what Chinese power will mean for India's interests. So I think that is very much a multipolar dynamic in action, and uh, we don't need to necessarily call it hedging per se, because I don't think it's primarily uh geared toward a sort of hedging dynamic. It's geared toward a foreign policy of non-alignment more broadly.
And then and then to your question on pushback domestically and and why foreign countries are not taking greater uh consolation in the low poll numbers of many of these policies or in the uh pushback on the administration at home. You know, I think candidly, what what many uh of of us hear from from foreign uh, you know, foreign friends, foreign partners, is that they are surprised at how little pushback there has been in the United States, including from Congress and others who uh, you know, could have a much more robust uh set of, you know, responses. Um, and so that, from their perspective, yes, see the poll numbers and and maybe see that most Americans think it's good for the United States to have strong alliances and to have strong friends around the world, but they live in the world of action in the present. And if they're under tremendous pressure, uh, they have to respond to that as the reality, not to hope that at some point in the future, uh, you know, forces in the United States, groups in the United States that have a much more internationalist bent, uh, can can have an opportunity to push back.
And so I'll just say across both, you know, I think to wrap up for all of us, this period of global transition is one in, you know, that's profoundly challenging where, for many of us, I'll speak for myself, but I assume for some others, you know, certain things that we've taken for granted are of course being turned on their heads, but it's also really an opportunity to question some of those foundational assumptions uh and their efficacy, and for discussions like this one today, I think to be a place where we can generate new ideas that uh, you know, can kind of rise to the moment. So with that, thank you all for your attention and and I look forward to the rest of the day.
>> Thank you very much to the Asia Society for this opportunity to come here. Um, there's a a lot of China expertise in this room, a lot of old friends, and it's really an honor to be here. Um, my starting point in in responding to what we've just heard from Julian is his final comments about humility. And uh that's that I think should be my starting point. If we're trying to understand what's going on in the world, there's a lot to uh feel very humble about.
Um, as I try to uh look at what's happening, what I try to do is look at some of the underlying dynamics that are driving these changes, because as we understand those, it helps us to monitor developments and interpret developments and get a better sense, I think, of where we're headed. So let me talk uh just a minute about the underlying dynamics in US-China relations. I think it's fair to say that the US has always had concerns about some of the Chinese economic and geopolitical policies and practices. But what's different now? I think the US government's assessment now is that China's impact is now too big to ignore. Previous efforts to protect US interests were ineffective. So we have to try something new. And to give some sense of that, I remember working in the US embassy in 1990, and we sent a cable back to Washington that said, "This year, our trade deficit with China will be $6 billion." Well, uh, in 19 in 2024, the deficit was $295 billion. So, we're obviously talking about a much bigger scale.
But by the same token, China says, "We're now big enough to determine our own path without having to bow to US interests." So you've got a fundamental difference in how the two countries are looking at each other. I think that the offensive goal of the United States is to constrain PRC initiatives that potentially harm US interests, but without provoking unacceptable levels of PRC retaliation or economic costs. So I think that's sort of the guiding principle for the US right now. On China's side, deter unwelcome US measures while also reducing US leverage without harming trade and investment. So that's kind of the situation that we find uh each other in. And the US government has moved from trying to shape China's policies now to block them.
Um, so what we find now, and and uh Julian mentioned this, we have a kind of strategic stalemate coming from the meeting in in Korea. Each side recognizes that the other has a gun pointed to its head, at least on the economic side. And so the analogy I use is that both of our countries are now traveling together through a tunnel. And what that means is the tunnel constrains each party from going off in its own direction, and we have to travel this tunnel together. But the question is, how long are we going to be in that tunnel before one country says, "You know, now I have the means to avoid retaliation." Maybe the US has its own rare earth sources, or China feels like they've got themselves covered in civil aviation, and so they don't feel constrained by the other side anymore. So we're we're constrained right now, but one of these days, we're going to start to exit that tunnel. And the question is, what are our countries going to do then? And I think that's something that we have to be monitoring very carefully. Um, what are things that China would want to do if it didn't feel constrained by the United States? And are those activities going to become more likely in the future?
Um, so so we're traveling through this tunnel. We're trying to figure out how to block the other side without incurring too much cost on our own side. And we're trying to prepare for the day that one or others, one or the other can can leave the tunnel. So that's sort of the bilateral relationship. How about the global relationship? Well, when I was a USR official, everything was focused on promoting globalization. That's 20 years ago. But the problem with globalization, it's kind of like democracy. I think it's fragile, and there are a number of conditions that have to be in place in order for globalization to work. First of all, you have to have a set of rules that if the major trading nations follow them, it will allow competition to take place on a fair basis. Second, you have to have a dispute settlement mechanism that is prompt and effective, so that countries really have to follow the rules and they can't get away with not following them for 5 years. And by the time they're held accountable, the damage has already been done to the trading system. So rules enforcement. The third thing is that major trading countries need to have a domestic political consensus in support of globalization. So that means that your population has to feel that they are benefiting from globalization across all different parts of the uh of the uh population, and they have to feel that their country is benefiting from globalization compared with other nations. So that's the third condition, the political support. Fourth, you have to have rules that uh prevent a race to the bottom in terms of how you treat your workers or how you treat the environment. And fifth, you have to have rules that allow countries to uh prepare adequately so they have economic security, so that you don't so that you can have multiple sources, so that if there's a pandemic or there other challenges, it doesn't seriously harm your economy. And six, you have to have rules that allow countries to protect their legitimate national security interests.
So if each one of those six conditions needs to be in place in order for globalization to be working on a sustainable basis, how are we doing? Are you satisfied with how we're meeting any of those six conditions? And so if we're not, what are we going to do about it? Um, the analogy I use there is of a football game. We go to the stadium. On one side of the field, we see the uh winners of the US Super Bowl practicing, warming up. On the other side of the fields, you have the winners of the World Cup warming up. They're both there to play football, but they have a very different conception. So how do you arrange things so that they can both play on the same field? The Chinese economic system is very different from ours. They are not interested in changing because they think it's been working very well for them. Look at the technological development. Look at the the way they've displaced some global champions in industries like the auto industry. So they don't want to change. So how are we going to get together?
The way I conceive of this, the US of course is promoting America First. And I think that if you think about the United States in in terms of a Venn diagram, here are all the American interests. Here are all the Chinese interests. If those two Venn di if those two circles overlap, and I think they do, that means there are certain types of activities that it's in the interest of the United States to carry out, and it's also in the interest of China to carry out. So if we can figure out what that overlap is, that's the place where we should be making our business plans. That's the place where we should be developing people-to-people contact. And that's where the future is. And each country is going to assess that space based on their economic interests, their national security interests. And so we have to think with those lenses in mind to identify what that common space is. And that's where I think we can have a a promising future between our countries. And hopefully, we can make that space as large as possible. Thank you very much.