WSJ: You mention that we need sufficient good will and good faith to proceed with trade negotiation. How do you judge and measure that?
Ambassador Cui: For a negotiation like this, people have to make their position clear and consistent. If their position is shifting all the time, I don’t think it’s helpful for any negotiation.
Number two, if there is some agreement, people have to remain committed to this agreement and try to make further progress. You cannot have some tentative agreement one day and reject it next day.
We fully understand that the U.S. side, the current administration, they love the principle of mutual respect, fairness, and reciprocity. Then people make all of these comments and statements without any sense of mutual respect, without any indication of fairness. How can we have mutual confidence to proceed with a negotiation?
WSJ: How have U.S.-China relations changed over the course of the administration?
Ambassador Cui: We had the Mar-a-Lago summit, April last year, which was a great success. I think both our leaders were happy about their first meeting. They got to know each other. They were on very friendly terms. Then President Trump made his state visit to China last November. It was also a successful one.
In the meantime, we did have a number of very high-level dialogues. We had the first round of all of these four high-level dialogues: Diplomatic and Security Dialogue, Comprehensive Economic Dialogue, People-to-People Exchange Dialogue, and also Law Enforcement and Cybersecurity Dialogue.
Of course, we also have problems. The trade issues have not been solved yet.
There is also the action taken by the administration and also some of the legislation on the Capitol Hill with regard to Taiwan and the American growing military presence in South China Sea.
[There are also possible restrictions] on people-to-people exchanges between our two countries, and all such talks about all the Chinese students here are spies. I think this is really poisoning the overall relationship, especially the understanding and friendship of the two peoples. I don’t know where all this originated, but this is really alarming.
WSJ: What do you expect from the coming G-20 meeting?
Ambassador Cui: I think we would expect, andmaybe our American colleagues would alsoexpect, that when the two presidents see eachother again in Argentina, they will review theoverall situation of the bilateral relations, maybesince their last face-to-face meeting in Beijing.
lt's been just over one year since PresidentTrump's state visit to China if they meet again inBuenos Aires in late November. So I think it'snecessary for the two leaders to review thedevelopments of the relations, and also give usa clear strategic guidance on where therelationship is going and how the two sidesshould conduct this important and complicatedrelationship together. Hopefully, this meeting will .enable us to make further progress on manyfronts, including on the economic and trade issues.
WSJ: Some people China would rely on assort of back channel, intermediaries, don'thave the clout that they once did. What'syour take on this?
Ambassador Cui: I think, first of all, this is not aproblem for China. This is a problem for Americaitself. What will serve the best interests of theUnited States if we don't listen to these .experienced people?
We have to talk to people in the administration in order to arrive at a solution of the problem. But at the same time, I think advice and assistance from people like [Former Treasury] Secretary [Hank] Paulson and others is extremely helpful. I think that both sides should make best use of their experience. We should listen to their advice seriously. And I, myself, I’m talking to people like Secretary Paulson, Dr. Henry Kissinger, Mr. Steve Schwarzman and the [U.S.] Chamber of Commerce here in Washington very often. I want to listen to their advice, their assessment of the situation and their views about the effective ways of solving the problem.
WSJ: Are you concerned about the possible economic fallout from the trade battle?
Ambassador Cui: The problem is that if things go on like this, there’s a real risk the global market might become fragmented. In the last few decades, we’ve seen a clear trend for the global market to be really globalized with the establishment of WTO [World Trade Organization] itself and with so-called emerging market economies like China, Russia, all the rest, joining the WTO. And we do see the restructuring of the global supply chain, integrating most of the countries.
But if we allow the current situation to go on, not only between China and the United States, but also between the U.S. and other countries and also on the multilateral front, there’s a real risk that the integrating global market might become fragmented. I don’t know whether this will serve the interests of any country. I don’t think that this will serve the interests of China. I don’t think it will serve the interests of the United States.
And also, although the current economic situation in the U.S. is good, people cannot rule out the possibility of another—I don’t want to use the word “crisis”—a similar situation as what happened 10 years ago. But under the current circumstances, do you think that people will still be as ready and open as they were in 2008 to have effective international policy coordination and coordinated stimulus actions? I’m not sure about that.
WSJ: In your view could the trade fight, if it worsens, lead to a global recession?
Ambassador Cui: We are the two largest economies in the world, so whatever happens in our economic cooperation will have an impact globally. This is just a fact, this is reality. So in other words, we have to be fully aware of our shared responsibility to the global economy, the prospects of global economic growth. If we solve our economic issues in a mutually beneficial way and in a timely manner, it will certainly enhance people’s confidence about global economic prospects. If we fail to do that, probably it will weaken people’s confidence for the global economy.
For economic and financial issues, confidence is very important. If people lose confidence, then a lot of bad things could happen. Some of these things could become self-fulfilling prophecies. So I think as the two largest economies in the world, we have to be fully aware of this and we have to act responsibly.
WSJ: U.S. businesses complain more than inthe past about the way they are treated inChina. How valid are the concerns?
Ambassador Cui:I think the fact is clearlythere's more competition in China comparedwith 40 years ago, because the Chineseeconomy has grown and Chinese companiesare also learning how to be internationallycompetitive. And maybe they are learning veryfast, sometimes with the help of American companies.
But still, bilateral trade has been growing so fast. It has benefited both countries. As people do more bilateral trade and investment with each other and there is more and closer contact between each other, competition will also increase. This is just a fact. There’s more competition on the Chinese market. This is determined more by the economic logic than by any policy.
As far as the government policy is concerned, we do have laws and policies to protect intellectual-property rights. We even set up special courts for intellectual-property cases. We also discourage or even prohibit forced transfer of technology.
WSJ: Some U.S. companies say that they are being pressured by Beijing to hand over technology.
Ambassador Cui: Very often we talk to American business people, asking them to give us specific cases; try to use the Chinese legal system to protect their legitimate interests. But very often they just don’t give us specific cases, they complain to the American government. I don’t think this will really help us to address that real concern. You have to give us specific cases.
For some of the cases of transfer of technology, it’s not forced transfer. Very often it’s a commercial deal between Chinese companies and American companies because Chinese companies have their local sales network. [They also have] land, facilities and labor. The American companies have technology. So they want to make a deal between them. Each relies on its so-called comparative advantage.
I’m sure there have been cases of so-called market share for technology. But these are commercial deals between the companies. If people don’t like the deals, they can certainly walk away. Nobody is forcing them to do these deals.
And also, besides such interaction between Chinese and American companies, there is also very fierce competition between American companies [and other foreign companies.
For instance, all the major car makers—American, European, Japanese—are competing with each other in China. So if American companies don’t bring their best model, their best technology to the cars they are making in China and selling to the Chinese consumers, they might lose their market share to the Europeans and Japanese car-makers.
So sometimes this kind of transfer of technology is forced not by the Chinese government or Chinese company, but by the market competition.
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