Myron Brilliant, Executive Vice President and Head of International Affairs, U.S. Chamber of Commerce.
I realized, Larry, that as many forums as we do we always have to remind ourselves to unmute first. Let me just say it's a pleasure to be here as part of this distinguished panel of guests. And I want to make a few points, but I don't want to repeat everything that's already been said this evening, and I'm sure said yesterday.
I start with the premise that the forum that Tung Chee-hwa and the China-U.S. Exchange Foundation put together is a good exchange of views on the state of play in the U.S.-China relationship, the importance of the role of the two countries in global affairs and the importance of finding a constructive, pragmatic approach to the relationship, with the rest of the world hedging their bets, both on China and the United States. And a dimension of that is important for us all to consider. I also want to recognize CCIEE, Mr. Zhang and Zeng Peiyan, the chairman.
And I will be in a dialogue later this week, two dialogues that will continue to go forward with CEOs from both countries. You mentioned, Larry, Madeleine Albright from our side, Steve Hadley, Tom Donilon and many others, Charlene Barshefsky — big figures in the U.S.-China relationship who will participate in this dialogue because the U.S. Chamber is a sponsor of a better future in the U.S.-China relationship.
However, I also want to be clearheaded about where we are today. There are three defining words, in my view, about the relationship. One is about areas of collaboration because it's pragmatic for both China and the United States to collaborate. Two, involves areas of competition where China in the United States will compete, but we want to compete on a level playing field. And three involves areas of confrontation in the relationship that need to still be worked on to manage the downside risk of confrontation — a decoupling in some aspects of the relationship, which is something that all of us hope does not happen .
So let's talk about collaboration in the context of where we are today. Clearly, President Biden inherits a very complex domestic agenda. Mike Spence referenced this, I won't go through it all, but it's more than the pandemic. January 6 was another moment in the United States to reflect on some of the social divides that exist in our country. Rising populism is certainly a consideration as we look at U.S. policy. It's also an issue in Europe. It's an issue in China. It's an issue around the world. I'm very concerned about rising populism, and I'm very concerned about the impact of that in policymaking in the United States.
I'm also going to say that nothing can be defined as simply a domestic agenda. This is where I probably would disagree with Mike. Everything in the domestic box also has an international component. The pandemic is not a U.S. pandemic. It's not a China pandemic. It's a global pandemic. The impact on the global economy is felt when China, the United States and Europe, obviously need to recover. China is setting the fastest pace to recovery, but the United States will have a recovery. We will have growth in the third or second quarter of this year. If the problem of our growth is it's a K recovery, not an inclusive recovery, that creates domestic challenges for us. But the pandemic is a global issue.
A high priority on the incoming administration's agenda is climate and sustainability. One of the first executive orders, which Mike again referenced, is rejoining the Paris agreement. We agree with that. However, it is also not just a domestic issue in the United States; it's a global issue. How do China and India respond to increasing pressures in this vein, particularly at a time when the United States is making rapid changes in the way we're addressing carbon emissions. So is Europe in its own way. Europe and the United States need to get aligned on policies that will continue to encourage innovation in the market without directing it through just mandates from the government. How do you get that balance right — that is, China and India join those conversations? Clearly, these are big overarching areas where there is room for maneuverability in the relationship between China and the United States. There is room for collaboration.
Now, just in the interest of time, let me talk about competition. Here we have many areas of competition. We have competition in technology, we have concerns about the self-reliance policies in China. And China has concerns about actions that have been undertaken, whether it's Huawei or TikTok or WeChat or other issues. These issues are not going away. The United States is going to continue to look at the nexus between commerce and national security. The Trump administration amplified that, but those issues are not going away under the Biden administration.
President Biden is someone I've known a long time. Secretary of State Tony Blinken and Jake Sullivan are people I'm engaging with as we speak, and they feel very strongly about these issues. And of course, the Defense Department and other parts of government will also be a part of this narrative. By the same token, there are actions being undertaken in China. Our past guest speaker, whom I've known for a long time, the executive vice chairman of CCIEE, references the U.S. entity list, the commerce list. Well, we could also talk about the Chinese entity list. So, each side is beginning to form a narrative around these issues, which is counterproductive to cooperation.
In the area of trade, we need to see phase one. The incoming administration is not talking about it as a phase one deal, but there are still outstanding questions about the phase one deal. And there are outstanding questions about whether the United States (perhaps engaging our allies in Europe and in Asia) will encourage China to move forward with badly needed structural reforms. Whether we're talking about SOE reform, whether we're talking about subsidy practices or whether we're talking about the area of IPR or other areas, there is still a desire with the current administration, with Congress and certainly with the business community to encourage and prod China for further reform.
Will China see that as entering its core economic model? Will it be prepared to do that — not in this current environment but at what point would China see that it's in their self interest, and how will the United States be able to marshal its relationships its enhanced engagement with its allies in a way that would encourage China to look at this.
This is also going to be an area of potential competition when it comes to the WTO system. I certainly support the use of the WTO as a more effective safeguard of the international trading system; it's critical. But right now we have fault lines within the WTO that need to be resolved, not the least of which are some of the reform agenda put forward by the Walker Principles. So trade is an area where we can make progress. Each economy is very much dependent on the other.
We need to start to think about ways to reduce the tariff burdens. But there are challenges there. Now competition also bleeds into confrontation — confrontation on technology, confrontation on democratic values. The incoming administration is talking a lot about democratic values as a cornerstone of its foreign policy, which is where there could be some challenges on issues like Hong Kong and the National Security Law or other areas of concern. Certainly, the Uygur issue — if we're going to be candid and direct we need to recognize these are issues that are flashpoints in the relationship. Taiwan can also be a flash-point in the relationship. And the South China Sea. So, as we think about the competition in the relationship, we also have to recognize the potential for confrontation.
Now I do believe that there needs to be a coherent strategic framework for the U.S.-China relationship. I'm an advocate for people like Yang Jiechi coming over to the United States to engage with the current administration — President Biden and his team. I do think we need to have a little bit of a pause, some time for reflection on where we are. But each side then has to take responsible actions to encourage confidence-building, because the lack of trust in this relationship is real.
What do I mean by confidence-building measures? The Chinese, for example, have expelled journalists. One easy step would be to invite journalists from the Wall Street Journal, New York Times, Washington Post, to come back into the country. The second issue, of course, is how do we manage the trade talks that have been undertaken during the Trump administration? I think it's critical that there be progress made on the trade agenda that could include purchases of aircraft and agricultural products. In the interest of time, I'll simply end on three points.
One, this is a very complex relationship, but there's no question that the U.S.-China relationship is the most important bilateral relationship in the world.
Two, countries are going to hedge their bets; they're going to seek the United States comfort when it comes to security issues, but they're not going to ignore the Chinese market. The sooner that government leaders on both sides, recognize that hedging is going on, the sooner we can address a number of challenges in the relationship and try to find some common ground.
And third, and most important, we need to manage the down-side risk in this relationship and not assume that the world will not go forward. And there is risk in this relationship. So while I do agree there's a lot in the inbox with President Biden and his team, I don't think that we can ignore a path toward a more stable relationship. Without both China and the United States engaging each other, both on the global challenges and on the bilateral challenges that exist.
So Larry, a lot there. I dismissed my remarks and went off the cuff, so I missed some points. But I'm going to leave it there and let the other guests pick up the rest of the comments.
Thank you. Thank you very much.