Sun Zhenyu (孙振宇). Photo: Chen Chenchen

 

Editor's Note:

Reviewing the US "pivot" to Asia strategy over the past couple of years, more than a few analysts believe that there have been mixed signals from Washington in its attitude to China - both toughness and restraint can be seen. Is the economic interdependence between the US and China already strong enough to withstand potential regional frictions amid the US "pivot" to Asia? Will different regional mechanisms, boosted by Washington or Beijing, ultimately integrate with each other? Global Times (GT) reporter Chen Chenchen sat down for an interview with Sun Zhenyu (Sun), chairman of the China Society for World Trade Organization Studies and former ambassador and permanent representative of China to the WTO.

GT: Do you think the economic interdependence between the US and China has been strong enough to guarantee the basic stability of this relationship despite potential frictions?

Sun: The Sino-US bilateral relationship is indeed much more mature than before. During his China trip in December, US Vice President Joe Biden emphasized the need for "trust" between Washington and Beijing.

During his meeting with Biden, Chinese President Xi Jinping stressed the importance of respecting each other's core interests and major concerns and consolidating collaboration on key regional and global issues. President Xi also put emphasis on the great significance of properly handling sensitive issues and disputes.

These are principles of crucial importance, which, if implemented well, can enhance mutual trust and ensure the steady and healthy development of bilateral relations.

Economic cooperation plays a crucial role in Sino-US relations. Currently, the trade volume between the two sides is more than $1 billion a day. Mutual investment is also growing rapidly to meet the interests of both economies.

In recent years, there has been talk among scholars and analysts about a "US decline." As far as I can see, the US does face severe challenges both at home and abroad. Nonetheless, the US is still the most powerful country in the world. US creativity for both system improvement and technological innovation should never be underestimated.

GT: How do you see the argument that China's neighbors rely on Beijing only for economic considerations, and they may ultimately prioritize security needs and side with Washington?

Sun: I don't think the situation is that simple. In normal times when there is no life and death threat from outside, it is the economic interest of a country that matters.

Fundamentally, each country's domestic politics, or how the party in office could win more support from the public, plays the dominant role.

We can see from the election situation in many countries that the economic agenda, including job opportunities, inflation rate and economic growth, appears more important for the party to win votes. When there is no significant threat to national borders, security issues do not even appear on a country's election agenda.

GT: Are you pessimistic about China's influence in its neighborhood as a result of the US "pivot" to Asia?

Sun: The Pacific Ocean was actually quite peaceful before the US pushed forward its "return to Asia-Pacific" strategy. Japan felt more emboldened by the US strategy - it challenged China, and unilaterally sought to change the status quo. The recent visit by Prime Minister Shinzo Abe to the Yasukuni Shrine was outrageous and has led to the current tension in this region.

Washington should reflect upon the situation carefully before it gets out of control. A more balanced, mutually beneficial approach is needed if it really aims to establish a new type of major power relationship with China.

I am not pessimistic about China's relationship with its neighboring countries although it will take quite some time before China and Japan can move out of the current frozen relations.

China has established long-term friendly relations with most neighboring countries, and we share similar cultures and many common values. China's vast market and rapid economic growth serve as a great attraction to its neighbors. China takes into consideration other countries' interests as well.

GT: Some neighboring countries have said that China's behavior pattern during its economic expansion is not welcome at times. What's your view?

Sun: I believe such voices deserve lots of attention from Chinese enterprises in their efforts to "go global." The Chinese government also has a responsibility to provide sufficient education and training for these enterprises.

Each enterprise should properly establish its corporate culture at home first, including conducting business within the framework of domestic laws and regulations, meeting environmental protection requirements and labor standards. Otherwise, they can hardly build a good corporate culture abroad.

GT: Neighboring countries now find themselves involved in different regional economic mechanisms, some of which exclude the US while others exclude China. Will a regional framework led by both the US and China ultimately emerge?

Sun: There are lots of discussions about the rivalry between the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP). I think both negotiations will prove to be very time-consuming.

The US is vigorously promoting the TPP. This is a reality, and we must pay attention to it. But even with the success of the negotiations, they have to return to the multilateral mechanism. They have to win approval from all the WTO members on a multilateral basis. Otherwise the consequence could be the fragmentation of international trade rules without much positive contribution to the promotion of economic globalization.

Although China has not joined the TPP talks, it is closely following the negotiations and making relevant studies on the possible new standards involved in the TPP.

China is working hard to combine the efforts of further reform and opening-up with the negotiations on the bilateral and multilateral fronts.

For instance, China has started negotiations with the US and EU on the Bilateral Investment Treaty.

China has expressed a willingness to take the principle of pre-establishment national treatment and negative list as the basic model for negotiations. China has also applied to join plurilateral negotiations on the Trade in Services Agreement.

If we can reach agreement with the US and the EU in these negotiations, we will be able to meet some of the future TPP standards too.

There are of course some more sensitive issues such as future disciplines on State-owned enterprises, which has much to do with our current reform process.