Deputy Secretary of State Antony Blinken, United States Ambassador to China Max Baucus, Press Roundtable, Lost Heaven Restaurant, Beijing, China

Deputy Secretary of State Antony Blinken
United States Ambassador to China Max Baucus
Press Roundtable, Lost Heaven Restaurant, Beijing, China

October 8, 2015

Deputy Secretary Blinken: It’s a great pleasure for me to be back in China.  I began my job as the Deputy Secretary of State in January of this year.  I had worked at the White House before, for six and a half years before that.  The very first trip that I took as Deputy Secretary was to China, as well as Japan and Korea, in February, and now we’re back, about eight months later.

I think in that small way it is evidence of the importance that our president, President Obama, attaches to Northeast Asia, in general, and to China and the relationship with the United States, in particular.  And I think you’ve seen that just in recent months we’ve hosted Prime Minister Abe, of course President Xi, and we’ll be hosting President Park of South Korea next week in Washington.  And then we have the Secretary General of the Vietnamese Communist Party at the White House, President Joko Widodo of Indonesia.

There is a tremendous focus on this part of the world, for the United States, because we see our future here in the Asia Pacific region.  And from our perspective the relationship with China is at the heart of that future.

The reason I’m here now is because we had, I think, a very successful visit by President Xi to Washington, and it was successful in that we were able to deepen areas of cooperation between the United States and China, and that was visible in everything from the work we’re doing on climate change to global health security, our work together in Afghanistan, even wildlife trafficking, and of course the agreement that we reached together with other countries with Iran on its nuclear program.

At the same time, I think it was successful because we are working hard to manage our differences in a very direct and open way.  Those differences are real, but increasingly we’re able to work through them directly and there too I think we’ve made progress on issues of concern to the United States including cyber security, including actions in the maritime domain, the South China Sea in particular, and also on some questions of law and human rights.

So the purpose now for me and for others who will be here is to follow up on that visit and to try to take the good words that were said by both countries and turn them into action, into deeds.  And we have a lot of work to do.  And as Ambassador Baucus is fond of saying, work takes work.  You’ve got to actually plunge into all of these areas of work together and work at them, and that’s the purpose of the trip.

So there’s follow-up to do on the agreements we reached on cybersecurity.  There is follow-up to do on the discussions we’ve had about the South China Sea.  There is follow-up to do on conversations we had about North Korea and concerns there, and in many other areas.  Development cooperation, our work together in Afghanistan, and so on and so forth.  So that’s really the purpose.

Just before I got here I was in, again, in Tokyo and in Seoul, and working as well with our partners there.

So that’s the basic purpose.  We’ve already had one very good meeting with our Chinese counterpart.  We have more meetings today, and into this evening, and then we go to Shanghai tomorrow as well.

So with that, let me stop there and open it up to questions.

Press: I have three questions.  The first is, the Obama administration has continued saying that the United States, not China which is not a party to the TPP, will write the rules of the global economy — for Beijing and other countries too.  So, is the conclusion of the TPP intended to encircle and contain China?  And is it part of the U.S. pivot to Asia strategy?

And the second question is, what is your comment on the outcomes of the Chinese President Xi Jinping’s visit to the U.S., and what’s your comment on the biggest achievement of his visit?  And what’s your comment on the future of the China-U.S. relationship?

Deputy Secretary Blinken: Thank you very much.

Press: And my third question is, you know China is taking a more active role in global affairs, such as setting up the AIIB and the proposal of the One Belt, One Road initiative.  I’d like to know what’s the U.S. attitude towards that?

Deputy Secretary Blinken: Thank you very much.  A lot of good questions there.

First, with regard to TPP.  It’s very simple.  It is not designed to contain China or encircle China in any fashion.  To the contrary, we would welcome China’s participation in TPP if it is willing to meet the standards that are established in the agreement.  And TPP offers I think tremendous potential to further expand trade and investment and that, in turn, can fuel growth, which fuels jobs, and it will be very good for the countries involved.  But it’s doing it in a way that meets the highest standards when it comes to protecting workers, protecting the environment, protecting intellectual property, having transparency.  In other words, it’s what we would call a race to the top, not a race to the bottom.

And any countries in the region that want to be a part of it and are able to meet these standards would be welcome, and certainly  if China decides that it’s interested in TPP, we would welcome that, and we would certainly pursue those conversations.

More broadly, I have to say that I know that there are people who think that our policies somehow are to contain or hold back China, and I must tell you it’s exactly the contrary.  We have a profound stake in a successful, prosperous China.  And not only from an economic perspective because we’re so connected and we want China and, indeed we need China, to succeed.  But it also makes sense for the United States to enlist China to play a role in the world commensurate with its significant power and influence because there are too many problems and challenges for any one country to tackle alone, and the United States and China have demonstrated that when they work together they can lead the world in a positive direction.

The best example of that recently is climate change.  So that’s our general approach.

When it comes to outcomes of President Xi’s visit, again I would say that what we’ve seen the visit underscore was what we’ve been trying to do together which is deepen and broaden our cooperation.  So, if you look at what we’ve done just in the last year, some of which came to fruition during the visit.  As I said, leading together on climate change, and during the visit we advanced that effort as well.  The work that we are doing together for example in Afghanistan, where the United States and China together are trying to play a role in advancing reconciliation in Afghanistan, training Afghan diplomats together.  We’re doing a lot.

We’ve worked together to fight the scourge of Ebola.  That’s significant.  We were partners in the effort to prevent Iran from getting a nuclear weapon and the agreement that resulted from there.  And all of those things I think were underscored during the visit.  We’re working on a bilateral investment treaty that can be very significant.

So, I think the visit highlighted those areas of cooperation and others that demonstrate to our own citizens, to Chinese citizens, and people around the world that when we work together in a cooperative way we can produce results.

But I think the other thing I have to tell you that was important about the visit is we demonstrated that we could engage directly on our differences.  And I think the work that was done to work through some of the challenges we face in the cyber area was important.  Similarly, some of the statements that President Xi made about maritime issues and the South China Sea was an important result.  And what this demonstrates too is that in advance of the visit we spent a lot of time together trying to work on these issues so that our presidents would be able to work together on positive conclusions.  So that to me was I think the success of the visit.

Finally, with regard to China’s growing role in global affairs, this is something that we welcome precisely because there are too many problems, too many challenges for any one country and it makes sense for China to play a leading role.

We’ve put a premium on making the G20 the primary institution for working on the global economy and the global financial institutions and structures, precisely because with China as part of the G20 it could play a leading role and its voice would be heard.

I think that with regard to One Belt, One Road and other initiatives of this kind, we welcome China investing some of its surpluses into infrastructure, for example.  There is a dramatic need in the region for more infrastructure.  The only question I think we have to answer is that any of these investments we believe should be made with the best interests of the people who live in the countries in question at heart, and at the highest standards.  So that goes back to TPP but it also goes to the Asian Infrastructure Bank.  Our only issue with that is we want to make sure that when it comes to the way the investments are made in terms of protecting the environment, supporting the rights of workers, transparency, debt ratios, things like that, that the highest standards are met.  So that I think covers most of it.  Thank you.

Press: With TPP, it has been a long, common understanding among the Chinese that from purely a cost-benefit perspective it is not really worth joining TPP.  So I think after the announcement of the TPP, the finalization of that and the response in China, especially in the business world, has been rather calm.

I wonder, first, have you already officially or unofficially asked the Chinese part to join TPP, or during your visit how are you going to talk about that?

And second is, I think from our cost-benefit analysis, the benefit for large countries like China and the U.S. for joining TPP is limited.  But it’s quite beneficial for small countries like Vietnam and other small countries.

The Chinese will ask a very pragmatic question, why America chooses to lead this game?  Thank you.

Deputy Secretary Blinken: With regard to whether we’ve asked China to join, no.  But what we’ve said is we would welcome China’s interest if that’s what it decides, and that we would be prepared to discuss that if China is interested.  And that is very much where we are.

Press: So the ball is in the Chinese court, not yours?

Deputy Secretary Blinken: I would say that we would be very interested in knowing if the Chinese government is interested and wishes to pursue the conversation, we would do that.  We’ve made that clear.

Second, I would say that from the perspective of the United States, on one level you’re right, that in some cases the benefits of TPP are even greater for some of the smaller countries involved, but I would say from the perspective of the United States there are at least two very significant benefits.  One is that in some cases some of the countries involved, their markets have been much more closed to the United States than our market has been to them, and because TPP will have the effect of greater market opening, that will benefit us.  It will benefit our businesses and workers.

But even were that not the case, the real benefit from our perspective is precisely what we just talked about, and that’s the standards that it brings with it.  That is our belief that we will all benefit and be better off if in agreements of this kind we establish the higher standards, again, for protecting the environment, for protecting workers, for protecting intellectual property, transparency.  That’s good for us because we believe that it’s good for the larger system.  And if we can help, as I said, lead a race to the top, that will make a big difference.

It’s very much in the interest of the United States to have a growing middle class, not just in our own country but around the world.  We want to export our products and a growing middle class is likely to be interested and able to buy them.  So we do have a self-interest in that, but we think other countries that have tremendous capacity like China would be interested.

Now it’s true that in some sense for China, China has benefited from the fact that in many cases markets around the world have been much more open to China than China has been open to these countries, so there’s a choice.  I don’t think that that’s really sustainable politically or economically for a long time, but I’m also convinced that this opening would benefit China in very, very significant ways.  But that’s a decision for the Chinese government and people to make.

Press: Could you tell me more details about under what kind of situation or standards the U.S. could invite China to join the TPP?  This is my first question.

And my second question is, about inviting China to join or not, what’s the opinion of U.S. think tanks?

Deputy Secretary Blinken: I think when it comes to the standards there are some basic ones that we’ve already talked about that go to labor protection, environmental protection, intellectual property protection, transparency, and other things.  And they are very high standards and it’s been difficult in some cases for countries to get there, but we did.

Now there are also specific market opening requirements that all of us have had to deal with.  We’ve all had different sectors or industries that have been somewhat less open that we’ve had to, in order to do TPP, open up a little bit more to foreign competition or foreign investment as the case may be.  So China will have to decide, it goes back to your question, when they’re doing the cost-benefit analysis, what makes sense.

But I believe that when you look at the benefits of TPP they’re quite strong.

Again, we’re working as we mentioned on a bilateral investment treaty that also has tremendous potential to grow the trade and investment between the United States and China, and there we’ve made I think very good progress during President Xi’s visit.

Ambassador Baucus: At this point, obviously, that’s U.S.-China, it’s a bilateral.  And once we make headway there, that might lead toward TPP.

Deputy Secretary Blinken: Exactly.

Press: Sir, could you elaborate on the U.S.-China cooperation in Afghanistan and what have we achieved?

And my second question is, during your visit to China, is there any progress on the bilateral investment treaty?  And the third is, during President Xi’s visit to the United States and during your visit to China now, is there any progress on the differences issue — like the South China Sea and cybersecurity?

Deputy Secretary Blinken:  Thank you.

On Afghanistan, I think there are two very significant areas of cooperation.  One is that we are working together diplomatically to see if we can support Afghan-led efforts at reconciliation.  That is to test whether the Taliban is willing to engage in a reconciliation process with the government that would put an end to the conflict in Afghanistan, the internal conflict in Afghanistan, and allow the country to know better peace and stability.  And both China and the United States have significant roles to play in that given our relationship not only with Afghanistan but also with important countries that can play a significant role in advancing this effort, notably Pakistan.

So I think the two of us together have at least an opportunity to see if we can help advance this effort.

Second, though, we’re also cooperating in practical ways.  I mentioned earlier, together we have a program to train Afghanistan’s new generation of diplomats.  Just a few weeks ago, we had a class of diplomats in Washington and the Chinese ambassador and I along with the Afghan ambassador welcomed the class, they just finished their program in Washington.  And then they were going to China.  That’s I think a wonderful example of us working together.

On the bilateral investment treaty, that’s less part of what I’m doing here mostly because the people who are responsible for that are really, are economic officials and they will be carrying most of the ball on that.

Press: So you’re doing more on the political issues?

Deputy Secretary Blinken: Yes, more on the security, political issues, et cetera.

Ambassador Baucus: It’s already under negotiation.

Deputy Secretary Blinken: Right.  Thankfully I don’t have to negotiate that.  We have our trade negotiators and others who are actually negotiating the bilateral investment treaty.

Press: So on political issues besides Afghanistan, what about cybersecurity and maritime issues?  Have you guys mentioned that at all?

Deputy Secretary Blinken: Oh yes, absolutely.  Because we, as I said, the real purpose of my trip is to follow up on the conversations and agreements that were reached in Washington.

On cyber, there were some very important agreements or commitments that were reached.  I think President Xi said very clearly that China would not engage in cyber espionage for commercial purposes.  That was a very important statement and it’s something we were very pleased to hear.  So we’re following up on that.

We agreed that we would work together to try to help establish norms and rules for state behavior in cyberspace because this is something that hasn’t been developed.  And if the United States and China are able to work together on this we can lead the effort to develop these norms.

We agreed as well that we would establish a mechanism to be able to update each other on any investigations that are being done with regard to malicious cyber activities or actions.  And I’m following up on that because we want to bring this group together.

We also agreed that we would share information on a very timely basis in the event of any troubling or malicious activities, and I’m following up to make sure that we have an ability to move forward on that.

So in each of these areas it’s really how do we take what was said in Washington and turn it into a practical reality?

Press: So, practically it went smooth?  The meeting went smooth with the Chinese officials?

Deputy Secretary Blinken: Well, I just had one meeting.  We had a very good meeting with the State Councilor.  But I’ll be seeing with the ambassador the vice foreign minister.  I’ll be seeing a leading official from the PLA.  And we’ll be seeing the foreign minister this evening.  Then in Shanghai, we’ll be seeing local officials there.

Similarly, on the South China Sea, I think we heard President Xi make some very important statements in Washington from our perspective, including making it clear that China will not militarize its outposts in the Spratly Islands, including a commitment to peacefully resolve any disputes, a commitment to preserving freedom of navigation, and also a commitment to try to conclude rapidly a so-called code of conduct that has been in the works among the ASEAN countries.  And there too, the next step is to look at the practical implementation of these agreements.

Press: When President Xi visited the U.S., did the two leaders discuss TPP, and did China show any willingness to join?   The TPP would be a legacy, a fine victory for President Obama, but Democratic presidential candidate Hillary Clinton might be the next president.  She opposed the new TPP.  Would you like to comment on this?  And how would you like to promote TPP to parliament?  What is the percentage TPP could pass before President Obama departs the White House?  This is the first question.

And the second, the national security [consensus] between China and the U.S. have been reached during President Xi’s visit in U.S.  What’s the punitive measures if anyone breaks the consensus?   My third one.  You are an expert on anti-terrorism.  China has had some terrorist attacks in the last few years by extreme nationalists.  How do you deal with this kind of terrorism?

Deputy Secretary Blinken: Would you mind repeating the second question, just so I make sure I understood it?

Press: The national security consensus between China and U.S. has been reached during President Xi’s visit in the U.S.  What is the quantitative measures if anyone breaks the consensus?

Deputy Secretary Blinken: Thank you very much.

On TPP first, happily I don’t do politics, so I don’t have any comment on anything that any of the presidential candidates have said about TPP.

With regard to our Congress, there’s a certain period of time during which the agreement has to be before them so they can study it.  A certain period of months.  So we know they will not act on it until the, I believe it’s three months, and that gets us into early next year.  It’s certainly our very strong hope that Congress takes up the agreement quickly, both in studying it and then in voting on it, and I’m hopeful that it will be approved.

It’s also true that next year is an election year, and in our country in election years that can sometimes complicate Congress doing business.  So it could be slower than we’d like, but I believe that when people focus on the merits of the agreement and the benefits of the agreement, they will want to act on it, but we’ll see.

Let me switch to the anti-terrorism question.  The United States condemns and stands against terrorism in all its forms wherever it takes place, including in China.  And we have worked in a number of instances with China on counter-terrorism together.

But it’s also very important to make a very clear distinction between people who are pursuing their goals through violence and terror and those who are expressing peaceful difference and peaceful dissent.  And that’s a line that we draw very clearly and very sharply.

We look at each case on its own merits and on its own facts to determine whether terrorism is involved.  And then in terms of our cooperation, for us it’s very important to make sure that we have all the information, all the evidence, all the knowledge so that we can make a clear conclusion about what happened and then help take action.  But as a general matter we welcome working with China against terrorism because it’s something that we’re both a victim of and we need to work on it.  But again, there’s a very clear line between terrorism and the peaceful expression of different views.

The second question is a very broad one, but let me try and answer it this way, maybe in a slightly different way.  We just had the 70th anniversary of the United Nations that we celebrated, and I think it was a moment of real reflection because when you think back to the last 70 years, from the founding of the United Nations to today, despite all of the problems in the world I think we also have to take account of some extraordinary achievements.  One is that there have not been wars between great powers since World War II and the founding of the United Nations, which was its fundamental purpose.

Second, we’ve had a period of extraordinary economic growth in the world, no more so than here in China.  And I believe that the international environment that was created after World War II is largely responsible for creating an environment, a climate in which countries were at peace and could pursue their economic future.  And it was a combination of that climate and the extraordinary talent and hard work of the Chinese people that I think has led to China’s extraordinary success and bringing so many people out of poverty.

Now you can ask what made that work?  Why did that happen?  And from the perspective of the United States, the fundamental reason is because we established an international order that was based on rules and norms and it created a stable, predictable environment in which countries could pursue greater prosperity.  And we believe that we have a profound stake in sustaining that system of rules and norms, and we want China to play a role commensurate with its emerging power and influence in sustaining that system.

We would be the first to acknowledge that the system, first, doesn’t work perfectly and needs some reform in different areas.  It also needs to better reflect the realities of today, not just when it was created 70 years ago with the creation of the United Nations and the international financial institutions and various international organizations.  And China should play a leading role in helping to bring the system up to date.

Then there are some areas where it couldn’t predict what rules and norms would be needed, like in the cyber area because that didn’t exist.  So we have work to do together.  But we believe China has benefited greatly from this international system of rules and norms and that the consensus, we hope, goes to preserving that system, strengthening it and, as necessary, adapting it to new realities.

Press: So next year is the presidential election year.  So what if a Republican becomes president?  Like some agreements we achieved, what should be working, would be disrupted, for example like climate change?  What’s your opinion of this?

Deputy Secretary Blinken: I’ve found in my own experience that when you’re running for office or when your party is out of power you take certain positions in order to advance politically, but then if you happen to win the election and take office and have the responsibility of leading the country, your positions often change.  And both parties — Republicans and Democrats — tend in a political environment or an election environment, to play to their side.  I don’t want to say extreme, that would be the wrong word, but to their base as we would call it.  Either on the right or the left in our system.  But then once in office, they tend — not always, there are exceptions, but they tend to move back toward the center.

So the ideas that they may have criticized during a campaign, when they have responsibility for the country they suddenly realize that actually it’s to the benefit of the country.  That’s just —

Press:  So it means the risk of disruption is small.

Deputy Secretary Blinken:  I think the risk of disruption is small, because there tends to — With responsibility comes, usually, not always, usually comes moderation.  Again, you can find exceptions to that rule.  I can think of a few, but that’s the general principle, at least as I’ve observed it.

And so there’s also, I think, a view that if the United States reaches an agreement on something, then we put our credibility behind that agreement, and if someone comes along and changes their mind entirely and says actually never mind, we’re not going to make good on that agreement, it undermines the credibility of the United States and thus undermines our power and influence.  So any president, of whatever party, has some incentive, even if he or she does not really like the policy or the agreement that was reached, to uphold it because the word and credibility of the United States is at stake and that’s going to be important to any president — Republican, Democrat, whatever their views.

So it all goes to say that there are always risks that policies will change or agreements that were reached will be revisited, but I think the risks are smaller than you might think.  [To Ambassador Baucus:] You would know this better than I do.

Ambassador Baucus:  We’re a democracy.  Members of Congress, presidents and presidential candidates reflect the will of the people, basically, and they take positions because that’s what people want.  I think right now in America most people want this relationship to really work well.  And we’re also already joined together at the hip — economically, politically, U.S.-China – we’re very, very close together on so many issues that make such a big difference, and we’re going to get closer and closer together with the passage of time.

So, whoever is president will probably want to continue that basic policy.  Because I think most Americans want this to work.  There’s a lot of momentum here.  It’s like a huge, big battleship.  An ocean liner.  It just doesn’t turn on a dime, it’s going to probably keep going.  It may veer a little bit one way or another, but not, the course is going to stay pretty positive, pretty true, in my judgment.

Deputy Secretary Blinken:  Exactly right.

Thank you all very, very much.