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New China-US ties promising

Updated: 2013-07-18 17:32
By Harvey Dzodin (

At the time of the historic meeting in Sunnylands between Presidents Barack Obama and Xi Jinping, many wondered if the pronouncements of personal bonhomie and mutual bilateral cooperation were mere diplomatic niceties papering over irreconcilable differences, or truly the start of a new, more positive, relationship between the dominant power, the US, and the rising power, China.

Now with the conclusion of the fifth session of the Strategic and Economic Dialogue (S&ED), the first fruits of that tie-less encounter are appearing, and the harvest looks promising.

While some cynical observers have concluded that the only major flowering of the new Sino-American relationship at the S&ED was to fast-track a Chinese garden in Washington's National Botanical Garden, I wholeheartedly disagree.

To me, during the confidence building stage of this new relationship, attitude is as important as substance. The Chinese could have easily torpedoed this S&ED to express its pique over the Snowden revelations. The US could have done so over Hong Kong's refusal to hand Snowden over to the US to face the American justice system. Instead, positions were strongly expressed and duly noted, and the dialogue was able to occur.

In addition to progress on issues such as improved military-to-military cooperation, the environment and a host of other issues, China's new stance after nine previous inconclusive sessions on a Bilateral Investment Treaty (BIT) is big news, although the hardest work is yet to come and due to ongoing Congressional paralysis, US approval requiring a two-thirds majority in the Senate should a mutually acceptable treaty be negotiated, is, at best, probably years away. However, this treaty could be a game-changer!

Most BITs are generally limited to adjudicating routine investor disputes, however China has gone on record to negotiate the BIT with "high standards" indicating that it will include all stages of investment and all sectors.

This is the first time China has agreed to do so with any country. The US would benefit from increased access to the Chinese market, particularly in the service sector where it maintains a competitive advantage. China could benefit from more consistent treatment of its investors inside the US in addition to benefiting from access to US workplace productivity tools and technologies inside China to improve its productivity and economic efficiency.

According to US Treasury Secretary Jack Lew, the agreement could, for the first time, include all phases of investment, including market access, and sectors of the Chinese economy (except for limited negotiated exceptions).?

"A high standard US-China BIT is a priority for the United States and is critical to leveling the playing field for American workers and businesses.? A successful BIT negotiation would open up China's highly restrictive system to foreign investment and help create a wide range of opportunities for US firms to participate in the Chinese market. Negotiations could address a range of US commercial and economic priorities, including greater market access, removal of investment barriers, protections against technology transfer, and increased transparency."

I fully agree with Commerce Minister Gao Hucheng who said that "investment is an important area of China-US economic cooperation. It is a mutual concern of both parties, and both parties need to have creative thinking in order to create convenient conditions for the mutually beneficial cooperation between businesses of the two countries."

We will indeed need lots of creative thinking! Professor Graham Allison of Harvard has written about the historical pattern that he calls the Thucydides trap that rarely can a rising nation avoid war with the dominant power. He traces this back to ancient Greece when the historian Thucydides noted that Athens' rise stoked Sparta's fear that its dominance was threatened. The resulting 30-year war destroyed both civilizations in the process. And closer to our own time, since 1500 in 11 of 15 similar cases, war was also the result.

As the world's two most important countries, it is critical that both sides find as many ways as possible to keep lines of communication between them open. Why? Knowledge brings understanding. The lack of mutual understanding breeds suspicion, miscalculation, and both hot and cold wars.

I don't much care for the inapt description of our bilateral relations as a marriage (straight or otherwise). I think that we are more like Siamese twins joined together sharing common organs who cannot be separated without both perishing. In fact, we are in this together, and for the long-run at that.

I am not sure that our two nations can always be best of friends, but I am sure that we have the potential to be the best of partners. Ignoring each other and the Thucydides trap can be our undoing, Working together, while conceding our differences, offers hope not only to the citizens of both countries but to the whole world who are affected by the Sino-US relationship. The S&ED is a key tool in this regard. The fifth session with its more cooperative attitude, especially the opening of serious negotiation on a BIT bodes well in this regard.

The author is a senior advisor to Tsinghua University and former director and vice-president of ABC Television in New York.