Carlos Gutierrez: Time to Renew Friendship

Jan 26 , 2021

Carlos Gutierrez, Former U.S. Secretary of Commerce.


Thank you very much. I'm glad you didn't talk about some of the other tweets. Very kind. Chairman Zeng Peiyan, Vice Chairman Tung Chee-hwa, thank you so much for the invitation to be here. It's always an honor. I've had a friendship with China since 1992, and it's one of those friendships that I value. So it's a great pleasure and privilege to have been invited to speak. A lot of things have been said, and perhaps everything has been said. I try not to repeat and I thought I would pick several items, as recommendations of things both sides should be thinking about. I have picked five items but five is not a good number. I stretch it to six, a number of good fortune, good luck and hopefully good for business.  

The first thing I would like to emphasize is that the last four years are not the norm. The last four years have been an exception. The last four years should not be taken as a road to the future. And I'm talking about strategy. And I'm talking about tactics. Those are not the strategies and tactics that I grew up with. And I do not believe that those are the strategy and tactics that describe the future of the United States and China relationship. 

I don't believe that China is a strategic rival. And we will see what the Biden administration does in its first national security strategy. But I think that was a phrase that was criticized here in the U.S. When you call someone an enemy, they become your enemy. We are not an enemy of China. And I don't believe China is an enemy of the U.S. So words matter. And I think we have to be careful of the words we use.

Many in the U.S. thought that decoupling from China was actually a viable strategy. Now, I remember having many discussions in Beijing, where we agreed that it's almost an impossible strategy. You cannot decouple the two largest economies in the world, two economies that rely so much on each other, the two economies that have done so much for the world at large. We have never until recently talked about a strategy of containing China.

In fact, I will say, during the Bush administration, we always talked about welcoming the rise of China. The rise of China was good for the world. I remember in the private sector we used to say, when the market grows, everyone benefits. And China has made the global economy grow. And that should be welcomed. And I hope that we return to an attitude that is reminiscent of President Bush's attitude and point of view regarding U.S. relations with China. 

No. 2, we must think it's possible to not create a new technological cold war. In the same fashion as we said that the two economies cannot be decoupled, it is also impossible to decouple technology — something that we can't even see, something that is moving so fast that it will always be ahead of policies. It will always be ahead of government's abilities to stop it, change it, modify it. A technology decoupling would make China an island, it would isolate China; but it would also isolate the U.S. It would also make the U.S. an island. That is not good for anyone. 

Our approaches are different. We know that China is putting a lot of investment into technology. And there has been talk of technological supremacy. And everyone has the right to have a big goal, a big target. I know that we in the U.S. would aspire to continuing to add great innovation and have technological supremacy. But that doesn't mean that it's supremacy at the expense of China. And I hope that China's goal is not at the expense of the U.S. Eight of the largest technology companies in the world are American. I can't imagine any country living without those companies, living without those products, living without those technologies. If there is something that was done to motivate China to think that the only way forward was a decoupling of technology, then I think we both need to work together to avoid a new technological cold war. 

Even during the Cold War, when there was a nuclear race, there were treaties, there were agreements, there were ways to be able to coexist and manage. And I believe that we can reach that stage of managing our progress without it being against one side or the other.

The third point I would make is that our relationship should not be transactional. We have come to a point where our trade agreements are simply an agreement to transact. But China and the U.S., I believe are more important, are bigger than just a transactional relationship. We can contribute more to China. China can contribute more to the U.S. if our relationship is strategic. And we should aspire to that, in everything we do —and in our relationship, and in the way we see each other —  strategic in the sense that we cannot grow and achieve our goals, do for our people what we want to do, without China. And we don't believe that China can grow and do for the Chinese people what we know you want to do, without the United States. That is a strategic relationship.

The next point I will say is that we should not link commercial matters, commercial issues, to issues of national security and to geopolitics. Commerce matters, investment matters, have always had their own track. And when we combine them with geopolitical issues, when we combine them with national security matters, it complicates things to no end. And it makes it more difficult to backtrack, and to fix all those interactions and all the mixing of separate issues. 

The fifth point, I would say, is that we need to reinstate our mechanisms of dialogue. I have been shocked that over the last several years, mechanisms, forums, meetings that we normally would have — the JCCT, the SNED — we would get together and argue and not always agree, but we were discussing, we were having a dialogue. We disagreed, but we were respectful and try to understand each other, we have to get back to that. We cannot communicate by a press release or by a tweet. It's too important. It's too complicated. It's not simplistic. We need to get back to the table. And we have lost so much so much in our friendship and our understanding, because we have not been at the table.

And I would suggest, Mr. Chairman, Mr. Vice Chairman, colleagues, that one of the first things that we start discussing is how to backtrack and de-escalate the tariffs. Maybe we need to negotiate one tariff at a time. And maybe we need to agree to something in order to pull back. We have to start pulling back. We cannot continue or restore our friendship by having a gun to each other's head. So that should be number one.

In our joint agendas, I am going to take the liberty to paraphrase Zhou Enlai — and I will not say what he said, which is we fight while we speak. But I do believe that we can compete fairly while we speak. We need to do both. And right now, we have not been speaking. There are too many friends of China and too many friends in China and in the U.S. who have invested decades of their lives to improve this relationship. There's too much at stake.

If China and the U.S. continue to move down a path of antagonism it will hurt the U.S. It will hurt China. It will hurt our people and it will hurt the world. The pandemic is a terrible global situation. I believe that people around the world are waiting for that period of time that we call the post-pandemic period — when like Prime Minister Prodi I can finally leave my house. At that moment, consumers, companies are waiting, are just waiting to put in place the money that is circulated.

We have had a lot of stimulus programs; we have a lot of increase in money supplies. So has China. But that money has not been put into the economies; that money has not achieved velocity. But the moment we get to COVID — a post-pandemic period — I believe that we have the opportunity to see a golden era of growth and of prosperity. But that golden era can't happen without a solid, trusting relationship between China and the U.S. And, Mr. Chairman, I'm proud to be able to contribute to that relationship. 

Thank you very much.