Remarks by Vice President Joseph Biden on U.S.-China Relations
August 21, 2011
Thank you, all, very much. (Applause.)
Mr. President, thank you for your gracious introduction. We have an expression in the United States Senate where I served for many years when we want to say something personal, we say, permit me a point of personal privilege. I would like to introduce you to two of my family members who I’ve brought along with me, my daughter-in-law Kathleen Biden and my granddaughter Naomi Biden. Would you guys stand? (Applause.)
It would be more appropriate to say Naomi brought me along with her since she’s a budding Chinese speaker, been taking Chinese for five years, so I’ve been listening to her on the whole trip.
I want to again thank you very much. I had a wonderful few days in Beijing and a series of very positive and productive conversations with Chinese leaders. And I’m pleased to make my first visit to western China, which has played such an incredible, such an incredible role in this nation’s proud, proud history, and which today is the vanguard of Chinese -- China’s high-tech future.
Two years ago, Sichuan province suffered one of the greatest natural disasters in China’s recent history. And the American people were inspired -- were inspired by the way you all came together to help one another during that crisis. And I’m absolutely amazed as I drive around the city, and I’ll be moving out into the province later, after this speech -- I’m amazed at how quickly you have rebuilt and you have recovered.
The people of Chengdu, let me say simply that your hospitality has more than lived up to your reputation as the “land of abundance,” so again, thank you so very much for that hospitality.
It’s also great to be here on a university campus. I also want to thank our host, the university which counts amongst its alumni some of the most illustrious figures in recent Chinese history, including Zhu De and Ba Jin, both of whom are -- one a literary icon; the other, one of the most illustrious figures, and a founding father of the republic.
I’m also pleased to be joined today by -- he’s already been introduced -- but by our ambassador, our new ambassador Gary Locke whose grandfather came to the United States from Canton in the 1890s and toiled as a house servant in the United States in exchange for being able to get English language lessons. In less than two generations -- two generations later, Gary Locke, his grandson, has served as the governor of his home state of Washington, the U.S. Secretary of Commerce and the chief of mission in one our most important diplomatic posts in the world.
I share this story with you not because it’s unique, but because it is uniquely American. While not every child or grandchild of an immigrant will reach the pinnacle of society as Ambassador Locke has, America continues to put such possibilities within reach of all those who seek our shores.
On my first visit to China, which was more than 30 years ago when I was a young United States senator in 1979, I was with the first delegation of congressional leaders to visit China after normalization. We had several days of business with then Vice Premier Deng Xiaoping. It was a very different country then, but what was absolutely clear to me was that China was on the cusp of a remarkable transformation.
Changes were just getting underway. My first introduction here in Sichuan that would begin transforming a largely agrarian society into an engine of economic global and help lift hundreds of millions of people out of poverty was -- seemed to me clear at the time. That first visit came amid a debate in the United States of America similar to the one that exists today about how to view China’s emergence. Let me be clear -- let me be clear: I believed in 1979 and said so and I believe now that a rising China is a positive development, not only for the people of China but for the United States and the world as a whole.
A rising China will fuel economic growth and prosperity and it will bring to the fore a new partner with whom we can meet global challenges together. When President Obama and I took office in January of 2009, we made our relationship with China a top priority. We were determined to set it on a stable and sustainable course that would benefit the citizens of both our countries. Our Presidents have met nine times since then, including very successful state visits in Beijing and Washington, and have spoken numerous times by telephone.
Direct discussions between senior policymakers and the personal ties that result from such discussions in my view over the last 35 years of conducting foreign policy are the keys to building cooperation. They're built on understanding. They allow us to better understand each other and allow us to define our interests in ways that are clear so that each one of us know what the other country’s interests are, and to see the world through the eyes of the other with the intention of preventing miscommunications and misconceptions that tend to fuel mistrust.
With that goal in mind, we have worked very hard to develop our cooperative partnership through more than 60 separate dialogues on issues of matter to both China and to the United States; and I would suggest to the world as a whole.
The premier forum is what we refer to as the Strategic and Economic Dialogue which brings together policymakers from across both governments to discuss a range of issues from trade barriers to climate change. But we also recognize -- we also recognized immediately on starting that the importance more directly addressing security issues, as well. That's why in May we jointly launched the first Strategic Security Dialogue, a new channel for civilian and military leaders to discuss sensitive topics, including cyber and maritime security. That's why it’s also important that our military leaders work together, get to know one another -- not just our political leaders, but our military leaders -- as Admiral Mullen and General Chen have begun to do in their recent exchange of meetings.
The fact is China and the United States face many of the same threats and share many of the same objectives and responsibilities. But because we sometimes view threats from different perspectives -- that is China and the United States view them from different perspectives, our -- or favor a different way in dealing with what we perceive to be joint threats, our generals should be talking to each other alongside with our diplomats, as frequently as our diplomats do. Like China, the United States has a huge stake in the prosperity and stability of Asia and the Pacific.
I look forward to visiting two other Asian nations on this trip. When I leave China, I’ll go to Mongolia and then to Japan. The United States -- and I realize this occasionally causes some discomfiture -- but the United States is a Pacific power, and we will remain a specific power -- a Pacific power.
Over the last 60 years, no country has done more than we have to ensure the stability and security of the Asian-Pacific region. And I’d respectfully suggest that has been good for China, allowing China to focus on domestic development and to benefit from a growing market.
America’s focus on this critical region will only grow in the years to come as Asia plays an even greater role in the global economy and international affairs.
As President Obama said in Tokyo during his first visit to Asia as President, and I quote: “The United States of America may have started as a series of ports and cities along the Atlantic Ocean, but for generations, we have also been a nation of the Pacific. Asia and the United States are not separated by this great ocean, we are bound by it.”
That's why we’ve begun this dialogue, this Asia-Pacific Dialogue on issues -- to expand cooperation in the region where we both live and operate.
Let me give you another example of our security cooperation. The United States and China are also working as international -- with international partners to counter the threat posed by the spread of nuclear weapons, materials and technology, so called nonproliferation. Along with 46 other world leaders, President Hu honored us by joining President Obama and me at the Nuclear Security Summit in April of last year, and our nations are now collaborating on a center for excellence to provide nuclear security in China.
In my discussions with Vice President Xi this week, I said we have to deepen our conversations on the world’s two primary nuclear proliferating challenges: North Korea and Iran. I know that China shares our concerns, but some of you may wonder why our focus -- the focus of the United States is so intense. The reason is clear: If armed with nuclear weapons on long-range missiles, North Korea and Iran would pose a direct and serious threat to the security of the United States of America and our allies. It would present an existential threat. That is why -- that is why we’ve been working with China and our international partners to maintain peace and stability on the Korean peninsula and to achieve a complete denuclearization of North Korea. And it is why as the Iranian government continues its illicit nuclear program, we have worked with a range of partners and international institutions to enact the toughest sanctions that Iran has ever faced.
Without vigilant implementation of these sanctions, Iran will evade the consequences of the actions and diplomacy will not be effective in stopping their nuclear program. So we will continue to look to China to send a clear message to Iranian leaders through its words and its deeds that they, Iran, must live up to their international obligations.
There are many other security challenges that the United States and China share. From Afghanistan, to Pakistan, to the Sudan -- and we have been and will continue to discuss our mutual interests and concerns. Continuing to develop our security dialogue and cooperation is the surest way to meet these joint challenges.
Economic issues -- to state the obvious -- have been a particular focus of our nations’ growing cooperation. Together, we’re working to promote economic growth that is strong, sustainable and balanced, and trade that is free and fair.
Trade and investment between our countries are growing rapidly in both countries, in both directions, creating jobs and economic opportunities in both countries.
We often hear about Chinese exports to the United States, but last year American companies in America exported $110 billion worth of goods and services to China, supporting hundreds of thousands of jobs in America. The American people and the Chinese people are hopefully -- are becoming aware that it’s in our mutual interest in each of our countries to promote that exchange.
A more prosperous China will mean more demand for American-made goods and services and more jobs back home in the United States of America. So our desire for your prosperity is not borne out of some nobility. It is in our self-interest that China continue to prosper.
Every day it becomes clear that as the world’s two largest economies with ever growing ties of investment and commerce, what you do matters to us and matters to the American people. And what we do matters to you and to the people of China. To state it bluntly, we have a stake in one another’s success.
Just as putting America’s fiscal policy on a long-term sustainable path is important not only to the United States but to China, to China’s economy, shifting China economy, which the 12th five-year plan calls for, to rely more heavily on consumer demand in China is not only important to China, but it’s important to the United States of America.
As Chinese leaders have told me, this five-year plan will require them to take a number of steps including continuing their effort to move toward a more flexible exchange rate. It’s in China’s interest, but it’s also overwhelmingly in the interest of the United States.
In this time of uncertainty in global -- in the global economy, it is all the more important that we take the difficult but necessary steps together and along with our G20 partners continue to sustain the global recovery and create jobs and prosperity. We’re the two biggest engines in the world to be able to do that. As I said in May, when I opened the annual Strategic and Economic Dialogue in Washington, I said, “For many of the world’s most pressing challenges, it is a simple fact that when the United States and China are not at the table, the solution to the problem is less possible.”
But even as we cooperate, the United States and China also will compete, and competition is healthy. We will compete in global politics and global economics. And also -- also it is a feature of global politics and economics. It’s also a feature of human nature to observe others, to consider how they measure up, to strive to be the best, that's good for both of us. Genuine competition pushes companies, our companies and our people to perform better, and we should reject the misplaced notion of the zero-sum game in which everything one nation achieves somehow comes at the expense of the other. It is the opposite.
So make no mistake, America not only welcomes this healthy competition; competition is stitched into the very fabric of our society and our economic system. And while I may be a little biased, I have overwhelming confidence in the capability of the American people to compete on a level playing field with any nation and any peoples in the world.
But for this competition to benefit us both, it must take place on a level playing field with rules that are clear and treat all countries fairly and equally. Although the United States and China are working hard to get this right, we still face obstacles of doing business in each other’s countries. That's why I acknowledged on this trip the United States should undertake to make it easier for Chinese business people to obtain visas to travel to the United States. It takes much too long for that to happen. That’s not in our interest.
And while we are in the midst -- also it’s the reason why the President once he took office ordered for the first time in decades, ordered -- we’re in the midst of a total reform of our export control system. Already, we have made thousands of new items available for export to China for exclusive civilian use that were not available before, some of which require a license, while others don't. And tens of thousands of more items will become available very soon.
That's a significant change in our export policy and a rejection of those voices in America that say we should not export that kind of technology to -- for civilian use in China. We disagree, and we’re changing.
But it’s also why we are troubled when American investors are prohibited from having wholly owned, fully owned subsidiaries of their own company in many sectors in China and excluded from sectors, entirely excluded from competing in other sectors; restrictions that no other major economy in the world imposes on us or anyone else so broadly. That's why we have pushed Chinese officials to protect intellectual property rights. We have welcomed the Chinese State Council’s recent campaign to enforce intellectual property rights, a commitment that President Hu made when he visited and he’s keeping. But the effort must be strengthened and extended.
According to the International Trade Commission, American companies lose $48 billion a year and tens of thousands of jobs because of pirated goods and services. These protections -- intellectual property protections not only benefit the United States and United States workers, United States companies, but I would argue Chinese companies, as well, as they increasingly seek to safeguard their own creations.
You’re here at this great university. It’s very much in your interest that intellectual property be protected because some of you are the future artists, the future entertainers, the future innovators who will want to be able to have a market for what you do. But if it can be acquired cheaply and pirated, why would anybody pay you for the same service?
America’s focus on global security, free trade and economic fairness is longstanding. Since the end of World War II, we’ve helped build an international system that promotes peace and stability, gives all states the opportunity to share in global prosperity and provides rules to protect the basic human rights of all citizens.
China’s tremendous progress in my view can be attributed to the industriousness and talent of the Chinese people, as well as its leadership. But it was made possible, I respectfully suggest, by an international architecture that promoted stability and prosperity and enables upward mobility for all countries. I know that many Chinese and probably many of you students believe that your nation will continue on a path of greater prosperity. I agree that it will. That is my view, my prediction. But I also know that some of you are skeptical about America’s future prospects.
With that in view, I would like to suggest that I respectfully disagree with that view and will allay your concerns. Let me put this in perspective so you can understand why the American people are also confident about their future. America today is by far the world’s largest economy with a GDP of almost $15 trillion, about two and a half times as large as China’s, the second largest; with a per-capita GDP which is more than $47,000 -- 11 times that of China’s. I’ve read that some Chinese are concerned about the safety of your investments in American assets. Please understand, no one cares more about this than we do since Americans own 87 percent of all our financial assets and 69 percent of all our treasury bonds, while China owns 1 percent of our financial assets and 8 percent of our treasury bills respectively.
So our interest is not just to protect Chinese investment. We have an overarching interest in protecting the investment, while the United States has never defaulted -- and never will default.
I also have confidence in the fundamentals of our economy. Vice President Xi said it best I think when he told a group of Chinese and American business leaders with whom we met the day before yesterday, and I quote him, he said, “the U.S. economy is highly resilient and has a strong capacity to repair itself.” He is right. I believe America is even better equipped to compete in the economy of the future than it was of the economy of the past. In the 20th century, the wealth of nation was primarily measured by the abundance of its natural resources, the expanse of its landmass, the size of its population and the potency of its army. But I believe in the 21st century, the true wealth of a nation will be found in the creative minds of its people and their ability to innovate -- to develop the technologies that will not only spawn new products, but create and awaken entire new industries. The United States is hardwired for innovation. It’s part of our DNA from our earliest days. It has enabled generation after generation of Americans to give life to world-changing ideas -- from the cotton gin, to the airplane, to the microchip, to the Internet, to the world-leading companies like General Electric, Ford, Microsoft and Google. And I could go on and on.
These accomplishments were made possible not because there’s anything unique about an American. It’s hard to define what an American is. Shortly, 50 percent of the American population -- less than 50 percent will be of European stock. So we are the most -- we are an incredibly heterogeneous nation. That's part of our strength. That's part of the boundless capacity of the American people. But it’s also because of the enduring strength of our political and economic system and the way we educate our children, a system that welcomes immigrants from across the globe who enrich our national fabric and revitalize our diverse multi-ethnic society. And I would point out, we are still the destination where most people in the world seek to come. People usually don't seek to come to a nation in decline.
A system that trains students not merely to learn and accept established orthodoxy, but to challenge orthodoxy, challenge their professors, challenge the ideas put forward to them, encourage individual thought and innovation; a system that not only tolerates free expression and vigorous debate, including between citizens and their government, but celebrates and promotes those exchanges; a system in which the rule of law protects private property, provides a predictable investment climate, and ensures accountability for the poor and wealthy alike; and a system with universities that remain -- notwithstanding, and this is a great university -- the ultimate destination for scholars from around the world. More than 130 thousand students from China attended our universities last year. We’re hoping that number will be even larger.
China has followed a very different economic and political path to prosperity, enhancing some aspects of a free-market system, while resisting political openness and maintaining the state’s deep involvement in economic affairs. That's a decision for you to make.
Maybe the biggest difference in our respective approaches are our approaches to what we refer to as human rights. I recognize that many of you in this auditorium see our advocacy of human rights as at best an intrusion, and at worst an assault on your sovereignty. I want to tell you directly that this is not our intention. Yes, for Americans there is a significant moral component to our advocacy. And we observed where we have failed, as well. But it is who our people are.
But President Obama and I see protecting human rights and freedoms, we see it in a larger context, as well. Protecting freedoms such as those enshrined in China’s international commitments and in China’s own constitution -- we see them as a key aspect of China’s successful emergence and the key continued growth and prosperity. I know that some in China believe that greater freedom could threaten economic progress by undermining social stability. I do not pretend to have the answer, but I believe history has shown the opposite to be true, that in the long run, greater openness is a source of stability and a sign of strength, that prosperity peaks when governments foster both free enterprise and free exchange of ideas, that liberty unlocks a people’s full potential. And in its absence, unrest festers.
Openness, free exchange of ideas, free enterprise and liberty are among the reasons why the United States, in my view, is at this moment the wealthiest nation in the history of the world. It’s why our workers are among the most productive, why our inventors and entrepreneurs hold more patents than any other country in the world, why we are reinvesting in the fundamental sources of our strength -- education, infrastructure, innovation, and why President Obama and I are so confident that America will weather the current economic storm and emerge even stronger, just as we always have in past economic crises, and why there’s no reason why China cannot tap into the same source of strength.
Going forward together is going to have a lot of growing pains. As I said at the outset, in just over 30 years since I first came to China, your progress has been nothing short of incredible. I can see that here in Chengdu, the city that is leading the effort to become a major player in the innovation economy, you can feel it. You can see it in the eyes of some of you students.
Looking at this audience, there are some among you who will be the new pioneers in China’s economic development, leaving your mark on history. Just like Steve Jobs, the founder of Apple and others have had in the United States, you have the capacity and the potential and I’m sure some of you will do it.
I’m also proud that more than 160 Fortune 500 companies are operating in Chengdu High-tech Zone, including pioneer American businesses like Intel, Dell and Oracle. The U.S.-China relationship has also improved dramatically in the past 30 years. In order to cement this robust partnership, we have to go beyond close ties between Washington and Beijing, which we’re working on every day, go beyond it to include all levels of government, go beyond it to include classrooms and laboratories, athletic fields and boardrooms.
That's why we launched our 100,000 Strong Initiative to boost the number of American students studying in China each year and have maintained a robust Peace Corps presence. How many Peace Corps volunteers are here today? Raise your hands. We love you guys. Welcome. Welcome. (Applause.)
Last year, over 800,000 Chinese and 2 million Americans traveled between our countries to live, work, study and explore new places. On a personal note, I've seen the value of these exchanges through the experiences of my niece, a young woman who learned Mandarin at Harvard and spent a year in Beijing refining her language skills and ultimately worked at our Treasury Department on U.S.-China relations. There are tens of thousands of you like her, who are going to be the key to cement this relationship and deal with misconception and form the relevant societies about the motivations and operations of each of our countries.
These ties among our people are the life blood of our emerging partnership. The bottom line is this: As great nations and as global actors, the United States and China face many of the same challenges and share many of the same responsibilities. And the more we can work together, the more our people will benefit and -- as I said before it sounds chauvinistic, but the more the world will benefit as a consequence of our cooperation.
President Obama and I will continue the important work of making this partnership even more positive, cooperative and comprehensive in the coming years. And I hope -- I hope that my visit can serve as a step toward these goals and toward strengthening that bond.
So I thank you all for the honor of being here. More importantly, I thank you for taking the time to listen.
And with the permission of your president -- they tell me I don't have any time, but I never like to leave a university without at least taking a few questions. So I hope it’s permissible for me to able to take a few questions from the audience. Is that permissible, Mr. President. Is that okay? All, right. Thank you.
As you can see as Vice President, I’m used to always checking with presidents first. (Laughter.) I’d be happy to take a couple questions. My staff is going to get angry if I take too much time. But, please, there’s microphones in both aisles, I guess. And I -- I can’t see with the light. Gentleman all the way in the back waving both hands. It must be important.
Q: Good morning, Mr. President [sic]. And I’m a -- student from the medical school of Sichuan University. But my question is about economy first. And as you know that the China holds about $1 trillion U.S. bonds of treasury bonds. And that much money -- actually the value is uncertain because of the downgrade of U.S. credit rating. You seem to have instilled the confidence of the U.S. financial well-being into young people today because I heard you say that the U.S. economy is really resilient. And -- but words alone cannot ease the mounting concern over the safety of China’s assets. So we would like to hear more about what measures you’re going to implement to reduce those deficits and redeem the financial strength of America.
THE VICE PRESIDENT: It’s a very good question. One of the multiple rating agencies reduced our rating from AAA to -- plus -- come down one notch. And that was very disturbing and bothersome to us, and we have to deal with is.
We do have a deficit that I was asked by the President to head up a commission to try to deal with that deficit. And we made some significant progress, but not the progress we could have made and will make. The bottom line is we have to deal with two elements of our economy. One is what we call entitlement programs -- long-term commitments to our people in the area of particularly Medicare. That is the safety net we have for people once they reach the age of 65 to be able to be assured that they have health care.
And it is not sustainable without some changes in large part because we had what we call a baby boom, which doesn’t sound like much to Chinese -- 40 million people is not a big deal, I know. (Laughter.) But adding 40 million people to those who will benefit from the Medicare -- Medicaid payment -- Medicare payments has put the program in a position where changes have to be made.
It’s easy to make those changes, and we had a tentative agreement to do that between the major political leaders of the Republican Party and the Democratic Party and the administration. But there is a group within the Republican Party that is a very strong voice now that did -- wanted different changes, and so that deal fell through at the very end.
What we ended up doing is setting up a system whereby we did cut by $1.2 trillion upfront, the deficit over the next 10 years. And we set up a group of senators that have to come up with another $1.2 to $1.7 trillion in savings or automatically there will be cuts that go into effect in January to get those savings. So the savings will be accomplished. But as I was talking to some of your leaders, you share a similar concern here in China. You have no safety net. Your policy has been one which I fully understand -- I’m not second-guessing -- of one child per family. The result being that you’re in a position where one wage earner will be taking care of four retired people. Not sustainable.
So hopefully we can act in a way on a problem that's much less severe than yours, and maybe we can learn together from how we can do that.
But in the meantime, the concern that we will not make good on the investments that people have made -- in your case up to $1.7 trillion total out of a very large economy is not to worry about. We could not afford -- we could not afford not to make good on that requirement.
And that's why the irony was that in the Treasury offering in the first four days after the downgrade, more people actually came and bought our treasuries than before. And the interest rate paid on those treasury notes actually went down because they were so much in demand. So obviously, the rest of the world didn't think we were about not to. If the world thought, my God, they’ve been downgraded, and they are not going to make good on their debt, it would not have been viewed as the safest haven in the whole world to invest. We are still -- for all the economic difficulties nation’s have --
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