I’m so excited to welcome all of you to the 11th annual Senators’ Trade Conference. I want to thank Bill Center for his leadership, our speakers for their insights, and our sponsors for their support. For more than a decade, we’ve come together at this conference to discuss the most pressing trade issues of the day. This year, we’re focusing on China and the road ahead.
Frankly, I’m very concerned about what I see happening in Washington, D.C. Today there are loud calls for a drastic change in our relationship with China. That could have a painful impact on our state and our country. This morning, I want to share what I see happening, what we could lose, and what we need to do about it.
I think the best way to make my point is to share two experiences I had. One was a personal tragedy the other an international incident. Both involved China, and both shaped my perspective on dealing with China.
In the spring of 1997, I traveled to China on a trip with about 15 local leaders, including a few of you in this room. It was an incredible experience. But while I was there, I had a personal tragedy in my family. We’d left Hong Kong and when we arrived in Beijing, I got a phone call through the U.S. embassy. My father had become very ill, was taken to the hospital, and had passed away.
A short time later, I got a phone call that a high-ranking Chinese official would be visiting me to offer his condolences. That evening, an official from the Foreign Ministry knocked on my door. His name was Mr. Yang. He offered his condolences on behalf of the government and the people of China. But there wasn’t anything bureaucratic about it. I was struck by how personal and sincere he was. This wasn’t "China" – a country on a map on a wall in a classroom. It was one person sharing his heartfelt sympathy with another person. It was a connection I’ll never forget.
Now I want you to fast-forward four years. On April 1st, 2001, a U.S. Navy plane was intercepted by Chinese aircraft in international waters outside China. A Chinese plane made a series of very close passes. On one of those passes, it hit the American plane. The Chinese pilot was killed, and the American crew had to make an emergency landing on a Chinese island. As you know, the U.S. crew of 24 was based here in Washington state at the Whidbey Island Naval Air Station. The Chinese government held our crew on that island for many days. The incident created tremendous tension and outrage here in the U.S. – as it should – and it required very skillful diplomacy. Unfortunately, the Bush Administration stumbled at first. They ignored the things that we all know about dealing with China – the importance of words, of relationships, of saving face. Many in Congress were issuing demands and denunciations. None of those were helpful in getting our airmen back home.
Since I represented those crew members in the Senate, and since I had a history of working with China, I thought it would be helpful to have a face-to-face meeting with the Chinese Ambassador in Washington, D.C. On April 4th, the Chinese Ambassador arrived at my office in the Capitol. And who was the ambassador? Mr. Yang – the same man I’d met years earlier in Beijing. Because we had a relationship, we had a very frank and productive discussion. I was very clear that China had to release our crew and aircraft immediately. He told me about China’s concerns about its lost pilot and the unapproved emergency landing. I expressed my sympathy for the pilot’s family and asked him to think of the families of our 24 crew members.
At a time when many in Congress had slammed their door closed to China, my door was open. At a time when politicians were shouting threats across the ocean, I was having a face-to-face meeting that got to the heart of the matter. I’m not suggesting that my meeting brought about their release. That took tremendous work by the State Department and a carefully-worded letter from the U.S. Ambassador. But it worked, and on April 14th, I stood in a hanger on Whidbey Island and welcomed the crew back home.
That experience proves something that I’ve seen time and again in working with China: relationships matter. Having an open door matters. There are going to be tragedies, disagreements, and conflicts, but with the Chinese, the way to resolve them is through discussion, not desk-pounding, which brings me to my larger point.
For 34 years, the road we’ve pursued with China has been one of engagement. Along the way, there have been problems, but we’ve worked through them by sitting down together, talking, and listening. On balance, that path of engagement has produced good results for our state, for our country, and for the Chinese people. But today, some influential voices in Congress are calling for us to pull off the road of engagement and drive in a different direction. Instead of conversation, they propose conflict. Instead of cooperation, they seek retaliation.
There have always been some who seek a harder line with China, but what’s really troubling is that these views are getting an eager hearing today. I think that’s because for many Americans, China has become the symbol of all our fears about globalization – jobs being moved overseas and foreign markets that are closed to our products. And that means our country faces a choice.
- Do we stay on the road of engagement?
- Or do we change direction and move toward a more hostile relationship?
My standard has always been to ask what’s best for the United States – what’s in our economic, strategic, military, and security interests? From my work with China over the years, I’m convinced that engagement is the better course, and I’m sure most of you agree.
So the real challenge here is not – how do we talk across the ocean to the Chinese, but how do we talk across the political spectrum here at home? How do we reach those in our own government who want to change our approach to China? How are we going to persuade them that their interests are best served through engagement? I can tell you one thing. We’re not going to win them over by telling them their concerns are not valid. They’re frustrated, and their constituents are frustrated.
So today I want to lay out some ideas about how we can influence the debate here in the U.S. to help our country remain engaged with China. I care about this relationship because there’s so much at stake for our country and especially for our state.
What’s at Stake for Washington State
There’s an old proverb that says, "When two elephants fight, the grass loses." Friends, beneath the two huge powers of the U.S. and China, Washington state is the grass. We’re the place where the impact of that relationship is felt first and felt strongest. If there’s a trade war or a conflict, we will pay the price in lost trade and lost jobs. We have to speak up because we have a tremendous stake in this relationship. That was shown this year when President Hu made our state the first stop on his trip to America. As you know, China is Washington’s third-largest and fastest-growing trade partner. In 2004, our total trade was more than $20 billion. On a per capita basis, Washington trades more with China than any other state in the nation.
It’s not just about numbers. It’s about a historic relationship. Senator Warren Magnuson took the politically risky step of advocating for normalized relations with China during the 1950’s at the height of the Red Scare and McCarthyism. Our own Port of Seattle was the first U.S. port to receive a Chinese merchant vessel following the normalization of relations. Many of the people in this room helped lead the charge to grant permanent normal trade relations to China in 2000. And today, Washington state has one of the only state-based councils focused on our relationship with China.
What’s at Stake for America
Engagement is also important because of the impact China will have on our country and on the world in the coming years. One in five people on earth live in China. Its population impacts everything from the world’s food supply, to pollution and the use of natural resources. For instance, China is currently using 60% of the world’s concrete and 40% of the world’s steel. That’s causing shortages and rising prices around the world. China’s emergence as a major player on the world stage is one of the most consequential events in our lifetime. The future direction that U.S.-China relations take will have consequences that reach far beyond the borders of our two countries.
North Korea
Just two days ago, we saw another reason why it’s so important for the U.S. to be engaged with China and other countries. While most of us were celebrating Independence Day, North Korea tested several missiles – including one that could be capable of reaching the U.S. While that test failed, I consider North Korea’s actions a threat to the United States and to the region. I strongly condemn these provocative missile launches. We need to work with other nations and with groups like the U.N. to mount a serious response. As North Korea’s largest benefactor, China is critical to our efforts. Over the years, the Bush Administration has not paid enough attention to North Korea, and I hope they’ll seize this opportunity to develop an effective strategy to deal with this threat. Whatever we do, China will have an important role to play, and that’s why I think we’re better off working with China and the international community to protect our interests.
Different View on China
Unfortunately, not everyone in this country sees China in the same light. Where many of you see China as your company’s most promising growth market, others see Chinese imports as their biggest competitive threat. In communities across the U.S., families and workers view China with suspicion, as an unscrupulous competitor and the source for their economic insecurity.
Trade doesn’t occur in a vacuum. Today Americans don’t feel secure about their future. They’re worried they’ll lose their jobs, their pension, or won’t be able to send their kids to college. Today, China is becoming what Japan was in the 1980’s, the foreign scapegoat for our nation’s economic fears.
Unfortunately, this line of thinking can be heard more and more in the halls of Congress today. I see a very troubling divide between those who want to take us down a path full of acrimony and instability and those of us who want to stay on the path of engagement – so that China can become, as former Deputy Secretary of State Robert Zoellick put it, "a responsible stakeholder."
Five Steps
So how do we deal with those calling for more conflict? Let me offer five ideas.
One: Listen
First, we’ve got to approach those at home the same way we approach China — with an open door. We need to listen. We need to acknowledge that their frustrations have merit. We need to show that we share their concerns, and we do.
I’m concerned about China’s undervalued currency and want to see it higher. I’m concerned about its inadequate work protecting intellectual property. I’m concerned about the massive trade deficit. I’m concerned about opening China’s markets. I’m concerned about human rights, workers’ rights, and the challenges China faces protecting the environment. And I’m concerned about the alliances they are developing with regimes like Sudan and Iran as a result of their escalating energy needs. So the first step is to have a dialogue with those who are concerned and to show that we genuinely share their concerns.
Two: Press China and Get Results
Second, we’ve got to use our open door with China to make progress on those issues. Getting results is what will persuade skeptics that engagement is more effective than isolation. Engagement does not mean you roll over. It does not mean you pull punches. It means you make your case aggressively and that there is someone across the table from you who’s listening. You can yell until you’re blue in the face, but if there’s no one there to listen, what can you accomplish? The truth is that China is going to grow and develop and stumble and find its way. We can be there at her side throughout that process sharing our point of view, raising our concerns, and influencing the outcome. Or we can give up our seat at the table, yell into the air, and hope for the best. From my experience, engagement is the better course. So to win over skeptics, we’ve got to use our open door with China to get results on the issues people care about.
Three: Hold China Accountable
Third, we need to hold China and our other trading partners accountable for the deals they make. Too often when we reach a trade deal, we open the U.S. market the next day, but our trading partners take forever to open their markets. When that happens, we need to stand up for ourselves. Engagement can help us do that. Engagement makes China have to play within a rules-based system. As you will all recall, we worked very hard to help China accede to the WTO. Now we have a forum to pursue our concerns about intellectual property and other trade issues that may come up in the future. The U.S. has already filed a case against China on auto parts, and I expect that we could have a trade case on intellectual property in the future.
Four: Make America Stronger & More Competitive
Fourth, we’ve got to make America stronger so we’re less threatened by foreign competition. That means investing in education, in worker training, and in jobs here at home. My background is in education, so I’m very troubled to see our kids are far behind the rest of the world in reading, math and science. As Tom Friedman has said, when I was growing up, at dinnertime my parents used to tell us to clean our plates, because there were starving children in China and India. Today, American parents are more likely to tell their kids that they better do their homework after dinner because that’s what the kids in China and India are doing. I think we’ve got to invest in our high schools. Our high school graduation rate is 68 percent. When kids don’t graduate and aren’t prepared for work or college, our country falls further behind. That’s why I’ve introduced a bill called the PASS Act. It targets math and reading and helps students plan for college and the workforce.
We also need to invest in workforce training and apprenticeship programs so that as jobs change, we’ve got local workers with the right skills to fill in-demand jobs. And we need to renew and make permanent the research and development tax credit, which expired last year. All of these steps will help make America stronger at home so that we can compete around the world and so we’re less vulnerable to changes in the global economy.
Five: Reach Out
Finally, we’ve got to reach out. As you know, Senators Chuck Schumer and Lindsey Graham called for retaliatory tariffs on China if it didn’t change its currency policy. In March, those two Senators visited China, and they came back with a more nuanced message. They realized it wasn’t as black and white as it had seemed from their home states or from the U.S. Capitol building. And I give them a great deal of credit for being willing to go to China, meet with their counterparts, and have an open discussion. Those are the types of exchanges that we need more of.
My Upcoming Trip to China
In that spirit, I’m going to travel to China in the coming weeks with Members of Congress from both parties to continue the open dialogue that serves our country so well.
So friends, we’ve got work to do. The path of engagement that we’ve been on for decades is now under attack within our own government. If we sit back and assume someone else will take care of it, we’re going to lose jobs, economic growth, and eventually the way of life we have come to enjoy in the Pacific Northwest.
We in Washington state have a special role to play. We know what good relations with China means for our community and for our future. So I want to encourage you to help me make the case by listening to those who have real concerns, by using our open door to get results, by holding China accountable for the agreements it makes, by making America stronger so we’re less vulnerable to foreign competition, and by reaching out to strengthen the relationships we know are so important. And by the way, when I get to China, you can bet I’m going to call upon my friend, Mr. Yang.
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