40th Year Diplomatic Relations between U.S. and China

I have written mostly about U.S. immigration policy issues given the fact that I’m Chairman of one of the largest immigration law firm, not only in Houston, but the Southwest of the U.S. I’ve also served over 20 years as the Honorary Consul General of the Kingdom of Thailand, and now as Vice Dean of the Houston Consulate Corps. But, today I’m writing about the critical bilateral relations between the United States of America and China, at a time where that relationship has never been under greater stress in our 40 years of diplomatic relations, as China also celebrates its 70th year anniversary of the establishment of the People’s Republic of China on October 1, 1949.

During the past 40 plus years, I’ve had the privilege of being involved in U.S.-China relations, what our great President and fellow Houstonian, President George H.W. Bush consistently called throughout his career and post-presidency, our most important bilateral relation now and as far as one can see in the future.

These remarks are based in part upon the keynotes speech I gave at the Fourth U.S.-China Sister Cities Mayor Summit at the Marriott Marquis Hotel in Houston on July 17, 2019. I stated that this year, we are celebrating the 50th Anniversary of the July 20, 1969 landing of man on the Moon, as captured by Neil Armstrong when he famously said: “Houston, Tranquility Base here. The Eagle has landed.” I remember watching that unbelievable moment in grainy black and white on TV with extended family. It was literally an out-of-this-world experience, seeing man for the first time ever step on the Moon, something none of us ever expected to see.

But, it was just a few years later in 1972, when Air Force One landed in Beijing and President Richard Nixon, his wife Pat followed closely by then National Security Advisor Henry Kissinger, descended the steps to be greeted by one of the great leaders of China, Premier Zhou Enlai. While China was not nearly as distant from the U.S. as the Moon with the U.S. completely cut off from China for decades, I had that very same out-of-this-world experience.

For us in Houston, it’s entirely appropriate to look back to the establishment of diplomatic relations 40 years ago, effective January 1, 1979, as announced by President Jimmy Carter and Chinese Premier Hua, Guofeng. That announcement was quickly followed-up by the news, that Chinese paramount leader Deng Xiaoping and his wife, Zhuo Lin, would visit the U.S. on January 28, 1979. The expectations for the visit were sky-high. Deng had already been named TIME Magazine’s Man of the Year.

During his meeting with President Carter and his Cabinet, Deng accurately predicted that if and when China was ever granted Most-Favored-Nation status, that the trade between our two countries would expand exponentially, and that is precisely what has happened. China today is the largest country in the world with a population of approximately 1.4 billion people, the vast majority of which are very enterprising entrepreneurs when left to themselves. Over the past 40 years, China’s economy that was nearly dead last in every economic statistic has now become the second largest economy in the world, with the universal expectationthat if it has not already surpassed the U.S.’s GNP, it will in the near future.

During his historic visit to Washington, members of Congress rightly pressed Deng on the freedom of outbound migration. Given concerns over the Soviet Union’s restrictions on same, the Jackson-Vanik Amendment required countries to allow freedom of migration in order to have favorable trade relations with the U.S. Deng cleverly ended that conversation when he asked rhetorically to the members of Congress: “Oh, that’s easy. How many Chinese do you want? Ten million, 15 million?”

Prior to his visit, Deng had asked to visit Houston, given his fascination with space exploration, and his realization as to how important energy would be to the future development of the Chinese economy. After brief stops in Philadelphia and Atlanta, Deng and his entourage landed in Houston, on February 2, 1979, being greeted by a small delegation including Mayor Jim McConn and Governor Bill Clements. The only Member of Congress who flew on Air Force One with Deng and his delegation was Congressman Mickey Leland. Deng first visited the Johnson Space Center where he was able to maneuver a stimulated space vehicle for a safe landing, and he then rode in a lunar rover.

But, the most memorable moment of Deng’s U.S. visit, was the photo that came to symbolize the opening of China to the West. Deng’s host in Houston, at that time, was the Houston Chamber of Commerce, the predecessor to the Greater Houston Partnership, which arranged for Deng and his delegation to experience a real Texas rodeo. I was part of the delegation that welcomed Deng and his party to a small indoor rodeo arena in Simonton, TX, located west of Houston on Interstate 10.

After taking our seats, to our surprise, Deng entered in a Western stagecoach, smiling broadly and waving. After he joined the rest of his delegation, a young lady championship barrel racer rode over on horseback to present Deng with a ten-gallon Stetson cowboy hat. He immediately waved it and with a big grin, put the Stetson on his head. When Deng did, all the photographers went crazy. I think everyone realized that the photo they were taking would become the iconic photo, symbolizing the extraordinary developments that had occurred by China’s opening to the West and the establishment of full diplomatic relations. Almost overnight, this historic photo of this small, but powerful and extraordinary man from China, who showed great humor and confidence, completely changed U.S. public opinion towards China.

During his Houston trip, Deng had also had an opportunity to meet with Houstonian and oilman, George H.W. Bush, who had earlier served as one of our first Envoys to China at our Liaison Office in Beijing after the historic Nixon visit. This relationship between Deng and Bush would come to be a critical one during both the Vice Presidency and Presidency of George Bush.

Following the visit, Deng established the very first Chinese Consulate General in the U.S., not in New York or Los Angeles, but here in Houston. This was a clear recognition of the importance that Deng gave to energy in the future development of China.

Through The Asia Society Texas Center, which for almost 25 years I chaired, U.S.-China Partnerships and the Greater Houston Partnership, Houston continues to host a number of high-level visitors and delegations from China. The most important was the historic visit of President Jiang Zemin in 2002. I had earlier urged the then Chinese Ambassador to the U.S., Yang Jiechi, known to his  friends as Tiger Yang, that President Jiang give a major speech in Houston on his way to a previously agreed visit of President Jiang to President George W. Bush’s ranch near Crawford, TX. Prior to the dinner, President Jiang followed in the path of paramount leader Deng Xiaoping, by visiting the Johnson Space Center. At the big dinner, President Jiang was hosted by both the Greater Houston Partnership and the Asia Society Texas Center. I introduced President George H.W. Bush who, in turn, introduced President Jiang, who gave a rousing speech and to the amusement of President Bush and everyone else amazed us by singing a song.

As Houstonians, we take for granted that we are “Space City”, to use one of our city monikers. After all, our World Series Baseball team was named the Astros for our Mercury and other astronauts, and our game-winning Houston Rockets was named for the fact that we are the home of the Johnson Space Center associated with the Saturn rocket and other rockets that have taken man into space. However, in spite of the wishes of NASA’s leadership, we have not been able to work with the Chinese in space as we have with the Russians, which benefitted both countries. Unfortunately, that has been blocked for years by the so-called Wolf Amendment, even though we have continued to cooperate with the Russians in space, which benefitted our International Space Station astronauts.

Nevertheless, one can say that over the past four decades, our relationship with China has developed in a way that Richard Nixon and Henry Kissinger could never have imagined. China abandoned its support for Communist revolutionary movements around the world. After the loss decade during the Cultural Revolution, China under Deng Xiaoping fully embraced the goal of participating in the global economy. If anything today, our trade tensions today are caused by the fact that China has been so successful in embracing market-based economic reforms, and many Western values.

When we established our relationship with China, there was no expectation that China would remodel itself after the U.S. in every aspect, nor for that matter, that the U.S. would remodel after China in every aspect. Yet today, there are some revisionists who would like to say that this relationship is a failure because China has not become a model of the U.S., without recognizing that China is an ancient country with the world’s oldest continuous form of government of more than 3,000 years with its own traditions and history, which for more than 1,000 years had been  the most powerful, largest and advanced civilization and economy in the world. Today, with a population of 1.4 billion, China represents 25% of all humanity. It has a middle class of 300 million plus consumers, the size of the U.S. population, and same is expected to double in 25 years. Last year, with 150 million Chinese travelling abroad, China also had the largest tourist class in the world.

In China, President Trump’s erratic trade policies and demands of China are viewed as a clumsy attempt to stop China’s progress in raising more people out of poverty faster than at any time in history, developing an economy that matches the size of its population and recovering what it considers to be it due standing in the world. In Chinese’s long history, it was only yesterday, when the British in the 19th Century, intervened militarily in China in order to sell opium to the Chinese over the strong objections of the Qing Dynasty. Following British military intervention, China was forced to cede five Treaty Ports to the British, including Hong Kong and Shanghai and to pay the British so-called “war damages” in silver under the 1842 Treaty of Nanking. This treaty was one of the so-called Unequal Treaties forced on China during the 100 period of Chinese history leading up to Mao’s establishment of the P.R.C., a period of Chinese history referred to in China as the “Century of Humiliation”. Often, the Administration’s, Congressional leaders’ and pundits’ remarks, about stopping China today, be it HuaWei in 5G or China Railway Rolling Stock Corp. in mass transit rail cars, appear to be primarily motivated by a desire to help U.S. companies.

Any effort by the U.S. today to stop China and impede its growth is doomed; not only will it not be successful, but in the long run, such an effort could be mutually destructive to both countries and world economic order and stability. The very worst thing we could do is to turn China into an enemy by trying to de-couple it from the global economy.

While we were bound to have economic and other issues between the two largest economies of the world, these issues must be addressed in a context of mutual respect and appreciation that both of our countries have fundamentally different histories and institutions. My greatest concern is that President Trump has now given license to some, both in the U.S. and China, who would like to make us perpetual enemies which would be a huge tragedy, not only for our respective countries, but of the world’s economic growth and stability. China is not an economic enemy or an existential national security threat, but it is a tough competitor, at times beating us at our own game. In fact, China has embraced globalization, foreign aid, and the WTO ironically at a time that the U.S. appears to be in retreat. China plays the long game and our leadership, too often, are more concerned about the daily news cycle.

There are U.S. and Chinese officials who recognize that a pragmatic and cooperative approach between our countries best serve our mutual interest. Belligerent adversarial stances toward Beijing, in fact, will weaken the influence of those voices in China who believe in a cooperative approach, and a responsible international role for China, rather than an over-aggressive nationalism.

The long and short of it is that this most important bilateral relationship today simply is too big to fail. While President Trump has raised valid issues between our two countries that need to be addressed, those issues have often been presented in such a lopsided fashion that the American public often gets an oversimplistic view of the complexities of these issues and our relationship.

I’m an optimist that these issues involving trade imbalances, IP protection, and market access can be resolved in a win-win manner, and when that happens, Houston as one of the largest U.S. exporters will be a major beneficiary. With respect to the trade imbalance, many economists argue that it’s a sign of a healthy economy and that its indirect subsidiary, because it allows consumers to acquire goods at a lower cost.

IP protection is a two-way street. There’s been little recognition that China has taken major steps in recent years to develop a separate IP Court system. Recently, a panel of U.S. IP attorneys who represent major U.S. companies in China, at the U.S. China Innovation Alliance summit in Houston pointed out that they have a 90% success rate in protecting IP rights in Chinese IP courts, higher than they do in U.S. courts where their success rates are closer to 70%. U.S. companies are also regularly sued for Chinese patent infringement. All of this is simply to say that, like most issues, the IP protection issue is not all black and white.

While tariffs may clearly hurt China, the judgement is still out as to the extent of same, and it’s clear that the tariffs imposed by China have also had an adverse effect on the U.S. economy. Nor will such tariffs in the long run prevent the continuous expansion of Chinese economy, or China playing the long game and a growing role in world affairs.

Just as it was a mistake to believe that active engagement with China would bring about fundamental changes in China’s political systems and institutions, it is an equal mistake to assume that a trade war and economic coercion will succeed any better. In fact, given China’s history and political system, it is better positioned to weather hardships and any such trade war far longer than the U.S., nor can Chinese leadership appear to be giving into Western economic coercion.

Our two countries need to co-exist with each other, as the major world economic powers. Co-existence, while still focused on our fundamental U.S. interests and values, is critical in order to prevent the inevitable bilateral issues between our countries from turning into outright confrontation.

Any nostalgia for a new Cold War is grossly misguided. Unlike the old Soviet Union, China is a major formidable economic competitor and is not driven by Communist ideology. It would be equally misguided to base a strategy upon the expectation of the inevitable collapse of China. A Cold War analogy greatly exaggerates the existential threat of China and discounts considerable strengths of China. China has embraced globalization to the extent it is the top trading partner of two-thirds of the world’s nation. Its economic ties are complex and extensive worldwide as they are with the U.S.

Like the old Mutually-Assured Destruction (MAD) doctrine nuclear policy with the Soviet Union, where neither power could risk a nuclear war with the other, an all-out trade war with China would devastate both economies and prevent both powers from working together on global issues, such as climate change, nuclear proliferation, global pandemics, trade barriers, future global economic crisis, freedom of seas and yes, human rights.

Those in the U.S. who raise fear that somehow China will replace the U.S. as a global leader or represents a military threat, in the long run undermine a collaborative relationship which will actually prevent mutual understandings and solutions in these critical areas. We should view China’s engagement in the international system as a sign that those who engineered our diplomatic opening 40  years ago, have succeeded beyond their wildest dreams, and that China’s continued engagement in the international system, is essential to world stability and economic growth.

In conclusion, Houston has continued to benefit immensely by trade with China and by being the only city in the Southern half of the U.S. that hosts a Consulate General of the People’s Republic of China. Since 1979, Houston has hosted a series of able Chinese Consul Generals and we now welcome the newest, CAI Wei.

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Charles C. Foster, Chairman, Foster LLP; Vice Chairman, George H.W. Bush Foundation for U.S.-China Relations; Chairman, U.S.-China Partnerships; and past Chairman, Asia Society Texas Center.