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I'll start by quoting you: "Hu Jintao's visit to the U.S. will play a very important role in drawing up the blueprint for the development of U.S.-China relations." What should be in those blueprints?
When I came to China on the first visit [with Nixon in 1972], Zhou Enlai said to me, "This will shake the world." Now we have a different problem. The problem isn't to shake the world. We have to [work] together, which is not the operating style of our societies. If both countries recognize—which I think they are beginning to do—what their real task is, that it isn't just to stop the immediate day-to-day tensions but to have some vision. … Now, how well they can do it, how quickly, that remains to be seen.
You've also said that elites in both countries would like to see more confrontation and less cooperation.
Well, each side has its own view. On the American side, the argument is that the Chinese can't be trusted, that the Chinese really want world domination, that they are taking advantage of us in the transfer of technology and also that the Chinese in the last year have conducted themselves in a more assertive way than we have been accustomed to. On the Chinese side, the belief is that China has suffered a century of humiliation, or more than a century, and that it's now their turn to demonstrate at least equality. Then there are people in China who believe that the West and the U.S. are now in a uniquely vulnerable position. Based on the speeches that Hu Jintao gave—and his top adviser, Dai Bingguo, made a very major statement—at least the governing group in China today recognizes that long-term cooperation is important. It's also the evolution that the Obama Administration has undergone.
You've watched China for 40 years. Have they become more confident? More aggressive?
They've become more assertive. The impact of our economic crisis in China was both practical and, above all, psychological. There was a general belief that in the field of economics, especially of global management of economics, we knew what we were doing and that they could learn from us. So when we had this huge crisis, not only were they disillusioned in that belief, but a lot of policy people who had sent individuals over here to be instructed [had] egg on their faces. That was one track. Secondly, immediately after our crisis began, their exports began to decline. They had a sudden big unemployment crisis. And they have no social welfare system. They moved very decisively with their economy, and employment came back. We have lost some credibility when we now come with advice on what to do with currencies.
The U.S. should not be alarmed that they're building up their navy?
As fast as they can. It depends how far that goes. If they began to contest the American navy in every part of the world, that would be a problem. But both sides have an obligation. This is true wherever you are. If you try to get absolute security, you create absolute insecurity for everybody else. The mere fact that they're building up military force, to some extent, that's going to be a fact of life.
Will China, in 2050, be the most powerful country in the world?
They have been growing at a rate of around 9 percent a year. No country has ever done that. But here is a country whose coast is as developed as any part of the world. The interior is as backward. And then they will have a huge demographic problem starting in 2030. With the one-child policy, the part of the society that has to be taken care of by the working part increases more rapidly in China than I think in any other part of the world. So one shouldn't project a straight line in which China emerges as totally dominant. There is no reason why we should not remain in a position of equality and, in some areas, superiority.
Clearly the currency issue will be at the forefront during Hu's visit. Treasury Secretary Timothy Geithner made that point in a recent speech.
I think he's done a good job. The problem is in part this: Looked at as a single problem, the change in value of the Chinese currency will affect their exports. We ought to find some mutual framework in which their contribution is currency adjustment. And our contribution is X. I don't know what. This is one thing I have been urging. [Then] the other side doesn't have to step up there and say, "We have given this up and can't answer the question of why."
I think this could happen, and I would be amazed if the Administration wouldn't substantially agree with what I've just said.
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