Ideas That Matter

On the sidelines of a Chinese-American think tank forum that took place in Beijing in mid-December， a group of prominent scholars answered questions from Chinese media professionals on a range of issues. They spoke candidly about problems hindering bilateral ties and proposed ways to prevent them from escalating. Beijing Review reporter Liu Yunyun brought their opinions back to present them to our readers. Edited excerpts follow：

On President Xis U.S. visit

Zhou Mingwei （President of the China International Publishing Group）： One of the major proposals during President Xi Jinpings visit to the United States is that both countries should focus on the bigger picture such as peace and cooperation rather than conflicts. He

made that proposal not just for the benefit of the Chinese people， but also for the greater good of people in the Asia-Pacific region. He is looking beyond today and seeking ways to guarantee long-term peace and stability for generations to come. China is now learning and finding a proper way to get along with the United States. There are more areas for them to cooperate than to compete.

Jeffery Bader （Senior Fellow at the Brookings Institution）： There had been a fair amount of anxiety in both China and the United States about their relationship， in the six or eight months before President Xis visit. The visit had some substantial accomplishments that demonstrated to the public on both sides that the relationship is working and is in the interest of both sides—in particular， the agreement on cybersecurity， which I think is a historic agreement. Agreements on military-to-military communication and confidence-building measures are very important so there are no accidental encounters by military vessels and aircraft in each national space. And of course the important agreement on climate change， coming after last years agreements， the United States and China should be the two world leaders on the subject. I think that was a very good package， and helped to reverse some of the negative mood that had preceded Xis visit.

Evans Revere （Senior Director with the Albright Stonebridge Group）： The good news coming out of Xis visit is that there is this understanding that there might be a principle that we both can agree on. There are a host of other issues， like our different perceptions on human rights， the South China Sea， and the growing military capabilities of China combined with what many Americans view as lack of transparency in terms of intentions and plans. Now we have more and more military dialogue between our two countries， and more and more will come to understand each other and each others capabilities. What we need to do is to take that to a new level so we can try to reduce the suspicions.

On the yuans SDR inclusion

Da Wei （Director of the Department of American Studies at the China Institutes of Contemporary International Relations）： The United States has made a good judgment call by not preventing the Chinese yuan from being included in the Special Drawing Right （SDR） basket. It is the same thing when it agrees to reform the International Monetary Fund to make bigger room for China in this global financial institution. But the United States has one big problem： It is always caught between using its head and following its heart.

When the United States thinks rationally， it realizes that the rise of China is inevitable and it needs to give China a bigger say in international institutions. The United States totally understands that it would be much better to cooperate with a rising country and steer its direction than to resist the trend and shut it out. However， Washingtons knee-jerk reaction to the China-proposed Asian Infrastructure Investment Bank—not only refusing to join but also trying to dissuade its allies from joining—reflects its gut-wrenching feeling to see China in a leading role.

Yuan Peng （Vice President of the China Institutes of Contemporary International Relations）： The European countries welcome the Chinese currencys inclusion as evidenced by their generous transfer of part of the euro share to the yuan. They wish to bring the yuan in so as to counter the dominant role of the U.S. dollar. After the 2008 financial crisis， the United States bounced back quickly， partly due to their several rounds of quantitative easing， while most of the European countries were still mired in economic stagnation. The European countries found out it is dangerous to tie their currency and economy to the U.S. dollar and economy： The United States simply does not care how the European economy performs.

Bonnie Glaser （Senior Adviser for Asia and Director of the China Power Project at the Center for Strategic and International Studies）： Until China frees its capital account， and until China cuts off the link between the yuan and the dollar， the inclusion of the yuan into the SDR basket is more symbolic than anything else， because in essence， the yuan acts like a dollar in the SDR. So it has political significance and it is symbolic， and it is the overall efforts by the Chinese Government to make the yuan a more internationalized currency， but the extent to which this really has an impact is severely limited by the fact that the capital account remains under strict controls.

Jeffery Bader： The United States has long supported the internationalization of the RMB. I think this is part of the process of China being a global stakeholder. For the time being， the RMB will be a pretty small element of the reserve currency in the SDR， which will still be dominated by the U.S. dollar， the euro and by the Japanese yen. But its a major step toward China accepting the basic rules for convertibility of currency， acting in a way that maintains the yuans proper value.

On the South China Sea disputes

Yuan Peng： Freedom of navigation is a pseudo-proposition or a fake problem， because navigation is always free in this area. What the United States wants is freedom of military deployment—to watch Chinas ships and monitor the so-called military buildup by China in the region. It claims it is impartial and does not take sides. But the fact shows that the United States sides with other countries like the Philippines and Viet Nam…When U.S. warships come， we follow at a safe distance. Thats what Id like to call a new type of military relationship—we admit we have differences and conflicts， but we manage them properly so that they dont spiral out of control.

Da Wei： Before China reaches agreement with other claimants in the region， U.S. involvement is inevitable. Fortunately， China and the United States have established a code for unplanned encounters at sea. The U.S. warship USS Lassens sailing within 12 nautical miles off Chinas Zhubi Reef was followed by Chinese Navy ships. There were dialogues and communications. Lassen did not try to militarize the situation. Both sides exercised restraint， as they knew the patrol was for political purposes instead of a military action.

Jeffery Bader： When you have problems， you dont walk away from them； you try to get the two presidents together to work on them. You build up ties at the professional level， between agencies and between actors on both sides， so they get to know each other and get to know what their common interests are， and what their differences are， and eventually they reach agreements.

Bonnie Glaser： We are not going to solve the South China Sea issue overnight. Sovereign disputes are very difficult， and the United States does not take a position on sovereignty.

President Barack Obama has put forward a proposal， which has actually been in place for more than a year， to halt construction， halt land reclamation， and not to militarize the situation—thats what we call the three “nos.” A possible way forward is for all parties to exercise restraint， including all claimants， not just China. There should be some limits： no cruise missiles， no surface-to-air missiles， no storage of large quantities of jet fuel， one could make a very long list of military capabilities that constitute militarization.

On the U.S. pivot-to-Asia policy

Da Wei： If I were an American， I would say the pivot-to-Asia strategy is quite successful， even though a lot of Americans disagree. Compared with the situation six years ago， the U.S. relationship with nearly all countries in the region， excluding China， has been improving. They have strengthened military ties and forged new trade deals like the TransPacific Partnership （TPP）.

We can also say the strategy has its flaws. When the United States proposed the strategy， it stated it wanted to improve its relations with each country in the region， China included. However， its good relationship with smaller countries in the region is achieved at the expense of its relationship with China， the biggest country in the region.

Yuan Peng： I dont know what the future would be like for a trade bloc that does not have Chinas participation. China used to be extremely worried about the TPP. But with time and more knowledge of it， we can now rationally process its implications with ease. I think in the end， the TPP is more likely to ardently invite China to join its “inner circle.”

The ASEAN nations are wary of U.S. intentions， too. After carefully observing the U.S. Asia-Pacific policies for two years， they feel disappointed as they find out that the United States is there for its own benefit instead of bringing good to the region. They are afraid of being used as bullets for the American gun. More importantly， the U.S.-led TPP might undermine the integration process of ASEAN， which they have worked so hard for.