The German Marshall Fund and EGMONT present Transatlantic Approaches to China: Political and Economic Challenges with discussants Dr. Francois Godement, Dr. Robert Kagan, Dr. Eckhard Rohkamm and Robert B. Zoellick. John Pomfret moderates.
Dr. Francois Godement
Dr. FranÃ§ois Godement is founder and president of the Asia Centre in Paris, after directing the Asia programs of the French Institute for International Relations (IFRI) until April 2005. Additionally, he is a professor at the National Institute for Oriental Languages and Civilizations (INALCO) in Paris and a consultant to the policy planning staff at the French Foreign Ministry. Dr. Godement has also worked as a consultant with several international organizations, including the Organization for Economic Cooperation and Development, the European Union, and the World Bank.
He is co-chair of the European Committee of the Council for Security Cooperation in the Asia-Pacific, currently based at Asia Centre, and is a founding member of the Council for Asia-Europe Cooperation. He has written extensively on Chinese reforms and transitions, as well as on East Asian regional and international relations.
Robert Kagan is a senior associate at the Carnegie Endowment. He served in the State Department from 1984 to 1988 as a member of the Policy Planning Staff, as principal speechwriter for Secretary of State George P. Shultz, and as deputy for policy in the Bureau of Inter-American Affairs.
John Pomfret studied Chinese history at Stanford University. Over the past 2 decades, Pomfret has visited China twice, as a professional journalist and as an eyewitness to the events in Tiananmen Square in 1989. He was the Beijing Bureau Chief for the Washington Post. Currently, he is the Los Angeles Bureau Chief to the Washington Post.
Dr. Eckhard Rohkamm
Member of the board of German Asia-Pacific Business Association since 1995, Eckhard Rohkamm was appointed as chair in 2003. Previously, he was a member of the board of Thyssen AG, now ThyssenKrupp AG and chairman of the board of Thyssen Industrie AG from 1991 to 2004, where he shaped the companyâ€™s strategy within the Asia-Pacific and its activities in China.
After studies in marine engineering, Dr. Rohkamm started his professional career with Blohm & Voss, where has been member of the board since 1983 and chairman of the board since 1988.
Currently, Dr. Rohkamm teaches as honorary professor at the Technical University Hamburg-Harburg. Additionally, he is honorary officer in the Order of Australia (AO) and fellow of the Australian Academy of Technological Sciences and Engineering.
Robert B. Zoellick has been the president of The World Bank Group since July 1, 2007. He served in President George W. Bush's cabinet as U.S. trade representative from 2001-2005 and as deputy secretary of state from 2005-2006. From 1985-1993, Mr. Zoellick worked at the Treasury and State departments in various capacities, as well as briefly in the White House as deputy chief of staff. In 2006 and 2007, he served as vice chairman international of Goldman Sachs Group. Mr. Zoellick holds a J.D. magna cum laude from Harvard Law School, a master's degree in public policy from Harvard's Kennedy School of Government, and a bachelor's degree from Swarthmore College.
Great. It's wonderful to be here today. Thanks for coming. The rise of China, perhaps, is one of themost compelling stories of the late years of the 20th century and the early years of this century.As a country it has seen its GDP quadruple in about 30 years, and has yanked more peopleout of poverty faster than any country in the history of the world. China now today possesses$1 trillion in U.S. debt, and its appetites for copper, iron ore and oil rock world markets on almost a daily basis.Today we have assembled four gentlemen, a panel of four gentlemen who's collectiveexperience represent decades of dealing with China, both as diplomats, as businessmen and as scholars.The first question I'd like to pose to is to Bob Zoellick, former Deputy Secretary of State tothe United States and U.S. Trade Representative. The question I'd like to pose to you is, howdoes China's rise challenge the United States both politically, strategically, militarily and economically?And also a second part of that question is, is it possible that we are overestimating China'srise, much like Americans overestimated Japan's rise, or the threat from the Soviet Union in the 1970s?Before I begin, and this will embarrass John a little bit, but he's written an excellent book,which I read over the holidays of his experiences going back to the early 80s in China,tracing a group of Chinese, that I highly commend you and it's short, too.It's one of those books you could read quickly. So we've got as a moderator somebody whoreally knows the subject very well. Every time I go to China, and I was just mentioning thisto John, I come away just so fascinated because I was there for the first time briefly in 1980,and as his opening comment suggested, the course of China's development has really been absolutely extraordinary.And to connect your two questions a little bit, there is still huge internal challenges thatpeople, you know, need to be aware with. I won't go into them in depth here, but if you'reWen Jiabao, and you wake up in the morning, you certainly must have a staggering sense of what is ahead of you.And because of that I think going to the challenge to the United States and Europe, theChinese are basically looking for a benign external environment, why they deal with thesechallenges. But there's an irony which is at the same time that want to focus on internaldevelopment. They affect the world in such a significant way that they have to figure out how to engage with it.From our point of view, and I would imagine from Europe's as well, I think there's a needfor some reassessment because over the past 30 years, and this has been a bipartisan policy inthe United States, the goal has been to integrate China into the system.And yet if you step back and you look at currency, or commodities, or counterfeiting, orclothing, or any other thing, you can't help but recognize that China is integrated. It affectsall these markets. So the logical question is integrated to what end? What's the purpose?It's a fascinating time in dealing with China because they've come together where theChinese realize this. And so they've started to come up with a phrase at first called "China'sPeaceful Rise" to explain how they're going to integrate in the world. Then they edited thatbecause "Peaceful Rise" looked a little too threatening, so now it's "China's Peaceful Development."The idea that we came up with was China as a responsible stakeholder, the notion that Chinahas benefited from the international system and we want to try to integrate it effectivelybecause it has interests in this system of system, just as the United States and Europe wereboth the beneficiaries and creators of this over the past 40 or 50 years.And so I think there's a challenge now for the United States, Europe and China to sort of seehow these come together, while it's important to recognize the Chinese are very muchfocused on their internal development.So when you pose the question of challenge, the way I partly look at it, John, is to say if Ithink of any problem in the world today, whether it be Iran, North Korea, Sudan, energy andthe environment, capital markets, and I ask myself is it going to be easier or harder if you'reworking effectively with China, it's clearly easier if you're working with China. But that doesn't preordain it.And in my experience the Chinese are as focused on national interest as any country I'veever dealt with in a very hard headed way. But they are at an open point where their willingto consider a broader sense of these national interests if you work with them on it.But the last tension and I'll close on this is that anytime you have a rise in power like this,and this is sort of a Kagan thesis, whether or not, you have the issue of how do you integratethat rising power effectively in the system and that's fundamentally what we're talking about.So the Chinese know they will create anxieties depending on how they deal with this. On theother hand is an interesting part we touched on this yesterday in the foreign policy election discussion.United States is an unusual dominant power in the system because we keep trying to changethe status quo, and the Chinese are very aware of that and they feel some threat in thatprocess. So I think for U.S. and Europe together on this, there's a vitally importantopportunity other than dealing with Islamic radicalism, this is the big issue to me for the next 10 or 20 years.And I don't see it so much as teaming against China, I see it more as working with China toidentify these mutual interest and recognizing that underneath it there is going to be adifference which is there is a fundamentally different attitude on political value system whichstill creates a tension throughout this.Thank you. President Godement do you think that there is a difference in howthe Americans view China versus as how the Europeans view China? For example, theEuropeans, several nations have wanted to lift the arms embargo with China that wasimposed in 1989, whereas the Americans opposed that.Do you think Europeans have a more sanguine view of China as a strategic competitor eventhough they might share American concerns of China as an economic competitor?No I think the debate on the embargo was a sideshow compared to what Europe's basic problems with China are. But it istrue that Europe's basic problem with China also have to do with the relationship between the U.S. and China.As I think Bob Zoellick has started to show but I would put it in other words. The U.S. has asymbiosis or symbiotic relationship with China. It may be uneasy in all families there aresome quarrels, but it's almost like a family if you look at the trade and financial andmonetary implication of the U.S. economy with the Chinese.Economy of course it has to do with the U.S. market being open before the European marketwas. The Europeans have a relationship which is something different with China. And Isuspect that what is happening today between the U.S. and China must push Europeans firstto think about the benefits of having a federal envrionment.Having more unity of decision, having better coordination to deal with such a rising economyand such a rising power as China is. In 1985 the Commission took forwardlooking initiative which was to create elements of business trading in China, to help Chinadiminish it's trade deficit with Europe, that was 1985.Today of course we have a trade deficit which is not so far unscathed depending on whichfigures you choose to use. But really not so far from the U.S. trade deficits. But we don'thave the symbiosis and other sides. Particularly the service sector and financial side and thatI think is a problem, is the root I would sell many interrogations within Europe.You have people who maybe tempted today to go on the protectionist root or at least to tryand get what I would get reciprocity from the Chinese on a number of areas where it's harderfor Europeans to obtain reciprocity than it is for our American friends.You have others who may have attempted in the recent past to go the political root towardsChina to play a card so to speak. I don't think this has gone very far in recent times. And Ithink Europe must now be in a state of interrogation on how best to establish its relationship with China.So on one hand we have symbiosis with the United States, a relationship withChina, and Eckhard Rohkamm as a business man who has had many years of experience indealing with the Chinese from the perspective of trade, how would you instruct or advise theWest or Western companies to deal with the challenge posed by China?And also second part of that question is, among many Western businessmen there's almost, avery interesting view that says trade if you will, will help China an engagement with Westernbusiness will China reform it's political system.Do you agree with that perspective and do you think through engagement and becoming astakeholder in the West and in doing business with the West that the Chinese will help totransform their political structure and their political values as well?Well first of all I would advise any Western businessman to see China as a challenge and anopportunity. Over the past two decades from German industry, we have seen China purely asan opportunity in this market, and we now suddenly see well, not really suddenly, but benow see more and more that China also becomes a competitor.But that's absolutely all right. If we can't stand up to the competition then anyway we have aproblem. But I think we can take care of that problem I'm not afraid of that. I think, ingeneral, we, just as Bob Zoellick said, we can take one thing for granted, the Chinese areonly interested in one thing, that's their own advantage.And so far, it's not very easy to deal with them because you can be damn sure that they willlook after themselves. And everybody who goes there in the highest spirit of motivation willbasically play only in their hands.On the other hand, it doesn't make sense to try to seal them off. They are a coming powerand from a European perspective, I actually feel that they will consider themselves, at least inthe short to medium term on a par with the U.S. and I'm not sure whether they will consider us on the same level at all.But still, for the business community, China is a huge, huge chance and for example, forGerman industry it can be fairly stated that 80 percent of our investment in China is notdriven by cost aspects, but by market aspects.And this will be also the tune for the future so I'm not afraid, on the other hand, corporatepolicies and political strategies are quite different worlds and as a businessman, I would nottry to advise policymakers on a political level because at the end of the day, in the corporateworld, everyone of us has to make his own decisions.And whether the policymakers like it or not, OK they've set a certain framework, but how todeal with that framework and make the best out of it that framework, that's really the issuefor the individual corporations and their managers at the top level.Bob Kagan, a question to you is there is a lot of talk in the west about howEurope and America will help to manage China's rise. Do you think that that's hubristic, ifyou will, do you think it's possible to manage to help manage the rise of a country of 1.4billion when it itself is having great difficulty managing that rise?Well, I mean, far be it from me to denounce hubristic foreignpolicies, but I think that but, you know, I think that we have a wrong way of looking at theworld, in a certain sense, when we talk about managing the rise of China because theimplication of that statement, and I think this is this has been very common and I want tosecond something that Bob Zoellick just said, which is the implication of that is we're allstanding still and China is moving.We're the status quo and now we have to adjust in some way to the fact that China is rising.The United States is not a status quo power. The United States has been pushing outward forcenturies, and particularly since the end of the Cold War, the United States is not a status quopower. Europe may be a status quo power, but Europe also wants to see changes in the international system.So at the very least, what we have is a situation we are trying to manage China's rise, China'strying to manage the U.S., China's trying to manage Europe, Europe's trying to manageChina, we're all managing each other and that's it seems to me we have to think about aworld that is in flux, not a world where things are standing still except for this one chap who is rising.The second thing I'd like to introduce into the conversation because we tend to have in ourmodern political science and international relations theory world a view of nations acting inpursuit of concrete, measurable interests.China will try to solve its economic problems. China has a set of interests that it will pursuevery seriously, but we have to add the human element and the human element that expressesitself in nationalism and has for all nations throughout history and I'd like to introduce a word, ambition.I think China has ambition. Not just ambition to be wealthy, not just ambition to be secure,but ambition to be great by however it chooses to define its own greatness. It has a history, amemory of greatness and I think it has a desire for greatness. And that desire is somethingthat we can't manage so easily. That's not that's an independent variable that is that in facttrying to manage it we can only feed it in a certain sense. And I think it's dealing withaccepting and dealing with and understanding, the fact that human beings have ambitions,and that we're dealing with a country that sees it as the center, at least of Asian culture, seesitself as eventually going to be a power on par with other great powers in the world includingthe United States and that is going to drive a lot of its foreign policy.It certainly is having some affect on its military buildup, which is not as everyone agrees,derived from a perception of immediate threat or even an intermediate threat. It's reallyderived by a sense that it ought to be playing a larger role in the role and it has to back that up in a traditional way.Indeed the Chinese talk about the 21st Century as being the Chinese centuryversus the 20th Century being the American Century. I'd like to open up now to questionsfrom the audience to get you involved in this really fascinating dialogue on China. Ronnie Chang.