Toward better bilateral ties

Updated: 2012-12-31 07:48

By Shen Dingli (China Daily)

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Talks at China-US Joint Commission on Commerce and Trade lay the foundation for smooth and prosperous economic relations

It has long been debated whether trust, or distrust, between China and the United States is on the rise. Those who believe the US is unwilling to accept China's peaceful rise - and thus makes it difficult to maintain a healthy environment for Sino-American trade - have many facts to support their view.

But the last round of China-US Joint Commission on Commerce and Trade, which concluded in Washington on Dec 19, has proved the skeptics somewhat wrong by yielding a list of about 50 collaborative items, including reducing the threshold of American dual-use goods' exports to meet the demand of bilateral trade. This is a welcome step in China-US relations, especially when both countries will soon usher in new governments.

Since the normalization of bilateral ties in 1979, China and the US have built a fast-growing and fruitful economic partnership, improving their economies and boosting the prosperity of the Asia-Pacific region. China does enjoy an export surplus with the US, but that is the result of globalization which combines all elements of production worldwide to benefit most, if not all, parties engaged in the process.

Thanks to its rapid economic growth, China today is in a better position to increase its imports from the US, which will benefit both countries and help strike a balance in bilateral trade. China's modernization needs inputs from other countries, both developing and developed. And China needs to import some dual-use goods and technologies to help balance Sino-American trade.

For years, the US has been promising to ease control over the export of certain products to China, and the Barack Obama administration has stated several times that it would take steps to facilitate the move. But the US has been found wanting on this count. Needless to say, it needs to take appropriate measures to honor its commitment.

Beijing has taken notice of Washington's concern over such exports. First, the US is worried about protection of intellectual property rights (IPR) in China. Second, it is worried about the linking of foreign investment in China and the demand for technology transfer. It is also worried about the possible diversion of dual-use products from declared end-use and end-users to other fields.

Such worries warrant respect of trade partners, because all governments are committed to protecting their technological innovations and maintaining their competition edge.

But undue concern, rather than collaboration, will neither defuse tension nor build trust. The fact remains that China and the US should agree that it is in their mutual long-term interest to protect their IPRs, ensure reasonable transfer of technologies and keep imported goods and technologies from being diverted for non-specified use.

To this end, Beijing and Washington ought to hold honest dialogue and make tangible efforts to implement the decisions of the last round of China-US Joint Commission on Commerce and Trade. China has to fulfill its commitment to using genuine software in all government- and commission-level offices, and all central government-run State-owned enterprises. Moreover, China's adherence to the commitment should be verifiable because transparency is necessary not only to ensure smooth Sino-American trade ties, but also to encourage innovation in China.

China and the US have more than enough room for cooperation to maintain smooth bilateral trade and business ties. Given the US' concern, it should seek China's help to set up joint verification mechanisms such as long-range electronic monitoring and/or post-sale on-site visit to prevent its dual-use products from being diverted from end-use and end-users to non-specified fields.

This notion of collaborative business and security could also apply to China's investment in the US. Washington recently rejected Chinese heavy machinery maker Sany's application to invest in wind energy in the US because the proposed site was too close to a military facility. Even if the reason given by the US is justified, couldn't the two governments work together to find a suitable site for the proposed investment project? During the three decades of its economic reform, China has attracted tens of billions of dollars in American investment. To some extent, China has also led the world in terms of openness.

The best approach to trade in the age of globalization is to cooperate transparently. The 21st century demands that China and the US collaborate for mutual benefit instead of being entangled in zero-sum games. But to achieve that, the two countries have to respect each other's legitimate interests.

Therefore, Beijing and Washington should approach their new relationship by reducing mutual distrust and being more transparent.

The author is a professor at and executive dean of the Institute of International Studies, and director of the Center for American Studies, Fudan University.

(China Daily 12/31/2012 page8)