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China-U.S. Economic Cooperation: One Year Later

Jan 26 , 2015
  • Lawrence Lau

    Ralph and Claire Landau Professor of Economics, The Chinese University of Hong Kong

Approximately a year ago, a study, U.S.-China Economic Relations in the Next Ten Years, was published by the China-U.S. Exchange Foundation. The study makes a number of proposals for China-U.S. economic cooperation. The purpose of this paper is to revisit this study to see whether the proposals made have had any effect on the academia, businesses and governments in both countries. It turns out, to our pleasant surprise, that some of the proposals in the study have already been adopted and implemented. Other proposals are at various stages of being considered, evaluated, and negotiated, and will hopefully be adopted and implemented in some form in the future.

It is heartening to see some of the proposals that affect not just the two countries, but the whole World, for example, those that relate to climate change and to international trade, have been adopted. Historically, neither China nor the United States have ever had to treat other friendly countries as true equals. Looking back at Chinese history, China was either lording over other countries, treating them as vassal states, or it was a supplicant to foreign powers intent on turning a backward China into their colonies. And if one looks at the U.S., it saved European countries at least twice (World War I and World War II), and it occupied Germany and Japan in the aftermath of World War II. But I do not think the U.S. ever treated Japan, Germany, the U.K., or other European countries, as true equals. The only country the U.S. treated on an equal basis was the former Soviet Union during the Cold War, but it was as an adversary, not a friendly country. It is not easy for either country to treat a friendly country as an equal–they have to learn to do it.

That is why we advocate a new kind of major power relations in our study. It is of vital importance for this new kind of major power relations to be based on mutual respect, mutual recognition of each other’s core interests, as well as mutual benefits. China-U.S. economic cooperation can be win-win; and only win-win cooperation can be durable and sustainable. It is not pre-destined whether China and the U.S. will become “friends” or “foes”, but such expectations can be self-fulfilling. That is why not only current interactions but also expectations of the future must be carefully managed. However, it is simple to say but not so easy to do.


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