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CNN'S AMANPOUR

The United States and China Battle for World Influence

Aired February 4, 2010 - 15:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[15:00:00]

CHRISTIANE AMANPOUR, CNN ANCHOR: Tonight, will 2010 be the year of living dangerously? For the first time, China threatens sanctions, not against a rogue state, but against the United States.

Good evening, everyone. I'm Christiane Amanpour, and welcome to our program.

Beijing today accused the U.S. of wrongful accusations and pressure, after days of growing tensions over trade policy, over the Internet, and over $6 billion of U.S. arms sales to Taiwan.

(BEGIN VIDEO CLIP)

MA ZHAOXU, CHINESE FOREIGN MINISTRY (through translator): The U.S. conduct severely harms China's core interests and China-U.S. ties. The cooperation between China and the U.S. on international and regional issues will be unavoidably affected. The U.S. bears the entire responsibility for this.

(END VIDEO CLIP)

AMANPOUR: And in an unprecedented step, Beijing says that it will impose sanctions against U.S. companies that are selling arms to Taiwan. Predictably, Beijing is also furious with President Obama for agreeing to meet the Dalai Lama later this month. It was originally scheduled for last October, but delayed ahead of Obama's official visit to China.

And trade frictions are rising, as well. President Obama has ratcheted up the rhetoric against China.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The approach that we're taking is to try to get much tougher about enforcement of existing rules, putting constant pressure on China and other countries to open up their markets in reciprocal ways.

(END VIDEO CLIP)

AMANPOUR: So what will happen if either side carries out its threats? President Obama started by promising an era of mutual respect and mutual interest. And earlier, I asked Victor Gao, a former Chinese foreign ministry official, what had gone so wrong.

(BEGIN VIDEOTAPE)

AMANPOUR: Let me ask you, President Obama -- at least from the Chinese perspective -- had a very pleasant trip to China earlier this year. Why all this incredible tension right now?

VICTOR GAO, DIRECTOR, CHINA NATIONAL ASSOCIATION OF INTERNATIONAL STUDIES: Well, first of all, I think we need to look at the Sino-U.S. relations from different angles. First of all, I think any deterioration in the relations between these two countries will not be good for China, it will not be good for the United States, and it will not be good for world peace and development.

Therefore, I think we need to do whatever we can to improve the relations. I think China-U.S. relations is at a critical moment, and I think, one way or the other, different directions it may take will make a big impact on the world situation for this year.

AMANPOUR: Well, then why has China taken the unusual step of saying that it's going to slap sanctions on U.S. firms and cancel military engagements and visits and the like? Why? Why do that over Taiwan, which the U.S. has been sending weapons to for the last several years?

GAO: You know, from the Chinese perspective, this Taiwan situation is of utmost importance to China's national interest, because China considers Taiwan to be a part of China. Territorial integrity and sovereignty are of utmost importance to China.

Therefore, China views the U.S. arms sale to Taiwan -- unprecedented in the level of sophistication -- as a major kind of a step to upset China's national interest. Therefore, I think China has the justification to be very unhappy about this. And China has taken very unprecedented steps of imposing sanctions upon those U.S. companies which are involved in the arms sale to Taiwan.

AMANPOUR: But, Mr. Gao, why is it so much more sensitive for the Chinese this time around, rather than previous arms sales to Taiwan? We understand the sovereignty and the political issue, but why take this unprecedented step right now?

GAO: Well, several reasons. One is that, in terms of the level of sophistication of the weapons, the Black Hawks, the anti-aircraft missiles, et cetera, these are all very sophisticated weapons. The United States imposes sale of such weapons to China by its sales all these weapons to Taiwan.

On the other hand, I think the United States is asking for China's help across a whole range of issues, from Afghanistan to North Korea, to Iran, from climate change, et cetera.

Therefore, China gets a very mixed signal. One the one hand, the United States needs China's help; on the other hand, China is hurt because the United States displays a complete disregard for China's fundamental interests.

AMANPOUR: Well -- well, let me ask you -- let me ask you this. Obviously, the United States, President Obama has hoped to have China's help on issues, as you mentioned, particularly such as Iran, the upcoming effort to get at least a discussion on sanctions.

[15:05:00]

But China hasn't indicated at all that it will help on that. And even on the climate change in Copenhagen, it wasn't as forthcoming by any means as the U.S. hoped. So why not?

GAO: Well, I think China has its own principles or positions on these very important international issues. On the other hand, it doesn't take rocket science to know that when you ask someone for significant help, you do not want to upset the other side. And such arms sale by the United States to Taiwan is exactly such an example.

It hurts the Chinese feelings. It hurts China's perception of its sovereignty and territorial integrity. Definitely China will not consider this as an incentive to provide help to the United States when the United States asks China for such important help.

AMANPOUR: What about the whole list of issues that seems to have come up, for instance, the United States suggesting that it revalue its currency, President Obama suggesting that, the idea of the Google scandal over the last several weeks, where there was a big hacking into Google, and that, according -- also, along with the censorship issue? All of this seems to be coming at a head right now.

Some are speculating that China sees a new, young, weak U.S. president and is trying to stake its claim right now in the relationship. Do you agree?

GAO: I completely disagree. I think China treats President Obama with full respect, and I think we want to move on to higher level of cooperations with the United States.

And therefore, as I emphasized again and again, we need to provide incentive to each other. China and the United States need to incentivize each other rather than disincentivize each other, because worse international relations between China and the United States is not for world peace at this particular moment, and we need to go beyond this. We need to go beyond such worsening of the situations. We need to go beyond the rhetorics, which hurt the feelings on both sides.

Therefore, I think I strongly advocate both China and the United States to take a big step forward, focusing on our common ground, create incentive to each other, rather than burden down by such issues as the Taiwan.

AMANPOUR: What do you think can -- can be a next step? Because President Obama is going to meet the Dalai Lama, as all the U.S. presidents have, and this time China has taken a very, very strong and harsh tone to him, the China Daily saying that it was a pathetic idea, saying that it was the audacity of shame. Why get so upset over these issues now?

GAO: Because China is getting very mixed signals from the United States. On the one hand, USA needs China's help. China is now the largest creditor nation to the United States. Just imagine if China buys less of the Treasury bond or stops buying the Treasury bond for a couple of months, what it will mean for the national interest of the United States, but also for China, because China itself will be hurt if China takes such extraordinary measures?

Therefore, I think both China and the United States need to understand each other's fundamental national interests and avoid doing anything to hurt each other...

AMANPOUR: Well, some have suggested that 2010 is the year, quote, "Obama gets tough and Beijing gets nasty." Do you think that there will be a major trade war breaking out?

GAO: I hope not, because a major trade war between the two largest economies of the world, what does that mean for world economy? What does it mean for the recovery from the financial crisis? Therefore, I think neither China, nor the United States can afford a trade war. We need to be real champions of free trade.

China and the United States needs to take leadership in this particular regard. We not only need to do this for our own good; we need to do this to demonstrate to the rest of the world that free trade is the right way to go and protectionism is mutually destructive.

I see a lot of dark clouds building on the horizon, and I think it is time for great wisdom in Beijing and in Washington, D.C. And I think it really calls for a better understanding, greater level of transparency, and I think they need to open up new channels of communicating with each other.

AMANPOUR: Look, arms sales to Taiwan, meeting the Dalai Lama, calling for freedom and a lack of censorship, these are standard U.S. positions. Why have they created such heat now?

GAO: Well, if you consider this to be standard U.S. positions and you treat Taiwan as if Taiwan is just a Taiwan issue or Dalai Lama, his holiness, is just his holiness's particular situation, it is wrong, because it misreads Chinese positions on these fundamental issues.

AMANPOUR: I see.

[15:10:00]

GAO: And the consequences will arise for actions based upon such miscalculations.

AMANPOUR: And what do you think the dark clouds will mean? What consequences, do you think?

GAO: Well, you know, the very unprecedented, extraordinary step China has taken to impose sanctions on those U.S. companies is one of them. China is on the receiving side of sanctions for many years in the past. And even as of today, China does not treat economic sanctions as an instrument of foreign policy, but apparently they are now cornered. They have to resort to this particular instrument in this particular case.

And, also, I mentioned the Treasury bonds. I hope Beijing will not take any action to stop buying the Treasury bond for a short period of time, because the consequences of that kind of extraordinary measures will be, again, very damaging, both to China and to the United States.

AMANPOUR: And, Mr. Gao, thank you so much again for joining us.

GAO: Thank you very much, Christiane.

(END VIDEO CLIP)

AMANPOUR: So Chinese people, the Chinese government feels cornered, according to Mr. Gao. Next, we'll get the U.S. perspective from two former administration officials. That's when we return.

(COMMERCIAL BREAK)

[15:13:00]

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (through translator): It really hasn't changed my opinion of the U.S. The arms they're selling to Taiwan won't be a threat to the mainland. They're pretty out of date, and we're able to defend ourselves.

UNIDENTIFIED MALE (through translator): In the short run, it will affect relations, but the two countries are dependent on each other. It's hard for China to develop without the U.S. and vice versa.

UNIDENTIFIED MALE (through translator): It will definitely change my view. For us, this is hostile attitude. It will surely have negative effects.

(END VIDEO CLIP)

AMANPOUR: So several views from Beijing, this morning Beijing time. As you heard the last gentleman saying, that this is a hostile attitude, referring to the sales of arms to Taiwan.

Joining me now to discuss all this from Washington is Victor Cha, who was director of Asian affairs at the National Security Council for President George W. Bush, and David Rothkopf, who was deputy undersecretary of commerce for President Clinton.

Thank you very much, both, for joining us. Can I start by asking you, are you surprised by the level of hurt, according to Victor Gao from China, that China is showing right now, Victor Cha?

VICTOR CHA, FORMER NATIONAL SECURITY COUNCIL OFFICIAL: Well, I think it's symptomatic more of hurt feelings than it is of China feeling its oats and feels like it's in a position where it can dictate to the United States now.

This arms sale was not a surprise for China. They knew it was coming for some time. It has been a practice of the United States in the past to sell arms to Taiwan. So this action itself is not new, nor was it surprising to the Chinese.

I think what we're seeing in terms of Chinese attitude really is a sense that they feel that they are in the driver's seat, vis-a-vis the United States, after what they consider a pretty successful year of dealing with the Obama administration.

AMANPOUR: Right.

CHA: But as you said in your other piece, Christiane, I think that's going to change in the second year.

AMANPOUR: OK. David Rothkopf, do you think it'll change? And do you think that the Obama administration perhaps went overboard trying to placate China and put itself in this position, for instance, delaying the visit to the Dalai Lama, et cetera, those things?

[15:15:00]

DAVID ROTHKOPF, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: Yeah, I do. I think that, you know, we see this a lot in the U.S.-China relationship. We try to have a balanced relationship by swinging too far in one direction and then swinging too far back in the other direction.

I think year one of the Obama administration saw a stance towards China which was too soft, a trip to China which made it look like President Obama was going to see his banker and seeking his help, and not a lot of strength from the U.S.

This year has opened with a tough stance on Google and a tough stance on these arms sales, although, I agree, this has been long in the works and shouldn't be a surprise to anybody. And I think we're swinging back.

You know, hopefully, at some point we're going to find a real balance, but I found the statements that opened up your show about being hurt and so forth to be posturing, and I see the whole thing really as an effort by the Chinese, as you suggested, to test President Obama and to see how far they can push him.

AMANPOUR: Well, OK. So let's say the relationship gets rebalanced. Now we have the real issues of, for instance, trying to get China to be what the U.S. already called a responsible stakeholder, trying to get China to cooperate on all the important issues. Let's just take Iran.

Victor Cha, will China, do you think, step up and help on Iran, particularly in the -- leading up to the sanctions?

CHA: Well, I certainly think that's the -- that's the hope of the United States. It's certainly been one of the objectives on the nonproliferation side with regard to...

AMANPOUR: But is it realistic, that vote?

CHA: ... China. Well, right now, it doesn't look very encouraging, and I don't think it looks encouraging because of the Taiwan issue. I think it doesn't look encouraging because China just has not been ready to step up on counterproliferation issues. On occasion with North Korea, they have been more helpful, but it just doesn't look like they're ready to do this.

I think one of the -- one of the problems that we face is that China - - you know, we've set out this template for China to be a responsible stakeholder. And I think one of the mistakes in the beginning of the Obama administration was they accorded them a status as a global player before the Chinese were really ready to take on that role.

And so I think there's disappointment that's being evinced on the U.S. side, and there's anger being evinced on the Chinese side.

AMANPOUR: You say that, accorded them global status before they're ready, but by all accounts, surely, the fact that they are such huge stakeholders in the U.S. financial system, the fact that they are the global nearly superpower, along with the United States, doesn't that give them, David Rothkopf, a huge amount of leverage? Or are they confusing political -- or, rather, economic power with political power?

ROTHKOPF: Well, I think the Chinese are trying to get the leg -- their legs under them as a world power, just as Obama's trying to get his legs under him. I think Obama's really the first president of the -- what you might call the G-2 era, the era where the U.S.-China relationship is unquestionably at the center of economic concerns, global warming concerns, nonproliferation concerns, regional security concerns, international security concerns.

And so both sides are trying to figure out how they're going to do this dance. And I think it's time for a new kind of a doctrine. During the Cold War, with our principal rival, we had a zero-sum approach. They lose; we win. That's not the case with China. We need to develop a kind of doctrine of interdependence where we realize that we are interconnected in so many ways that every bit of leverage we feel here they feel there, and vice versa, and -- and, you know, consequences in one area have effects in completely different areas.

Neither side is handling things terribly well right now. One can only hope that there is progress over the course of the next year.

AMANPOUR: And what do you think, Victor Cha, in terms of them flexing their muscle because of their -- rather, their economic strength right now?

CHA: Well, you know, I think there's always this fact that everybody puts out about how much of a creditor nation China is to us, but the thing we have to remember is, that is a mutual hostage game. I mean, the Chinese do not do better by suddenly dumping a bunch of U.S. Treasuries to try to teach the United States a lesson. That would have a tremendous effect on their economy, as it would on our economy.

So the Chinese are no doubt deeply involved in the U.S. economy, but it's not something that they can leverage to their benefit. I do agree with David in terms of this point of positive -- a positive sum template for the United States and China.

You know, I think -- you know, during the Bush administration, we put forward this responsible stakeholder template, which really tried to say to China, as you rise, it can be a positive sum game in international relations, because you need to cooperate on some of these issues of common collective good...

AMANPOUR: So why haven't they? Are they?

CHA: ... like the environment.

AMANPOUR: They're not, are they?

CHA: Well, this is the thing. I mean, I think that they -- on the one hand, they understand this. On the other hand, when they are asked to contribute, they fall back into, "We are just a developing country, a poor country. Your income per capita is $40,000. Ours is still only $3,000. We still have a long way to go."

[15:20:00]

So they are big, but they still aren't mature.

AMANPOUR: And yet, David Rothkopf, it seems that they are way ahead of the United States, even though they didn't cooperate as was hoped in Copenhagen, but way, way ahead on green technology, for instance, have a thing or two to teach the U.S.

ROTHKOPF: Well, look, they've got $2 trillion, and they've got the ability to spend it rapidly because they have a centrally controlled system. They've got a lot of capabilities. And right now, I think they're outspending us in terms of green energy technology at something of the rate of 4 to 1.

This could give them a big advantage if they can also translate it into entrepreneurial spirit, business growth, global exports, and so forth. The problem is, they can't really do that in this area or in any other without cooperation with the United States, tapping into the U.S. market, working with U.S. companies. And so in all of these areas, when they do flex their muscle, they're likely to hurt themselves.

I think the other possible problem that they're going to run afoul of, if they continue pushing back as they are on this Taiwan thing in this disingenuous way, is that it's really popular in the United States to go after the Chinese. In fact, it's too popular. It's a trap for President Obama. It's a trap for any president. You want to score points? Make the Chinese the bogeyman. It's not good for the relationship, but as we've seen, the United States Congress often does things that are not necessarily in our national interests.

AMANPOUR: How dramatic is the whole problem with the Google, with whether it was a cyber-hacking job from China, or whether it's just simple censorship? Victor Cha, where do you put the Google Internet in the list of issues and problems between the two countries?

CHA: Well, you know, it's clearly a very important problem, not just in terms of Google, but it's a larger problem because it brings back into onto the main stage issues of human rights and civil liberties and these sorts of things that initially, for the first year of the Obama administration, they tried -- I mean, they pushed some of the issues, but they tried to be a little bit quiet about them.

But this Google controversy brings all this back to center stage. So I think human rights will be -- will be a bigger issue now, especially as the president meets with the Dalai Lama. Another issue down the road is going to be this whole question of currency manipulation...

AMANPOUR: OK.

CHA: ... and whether in April the Treasury Department decides to actually name China as a currency manipulator. That would be a -- that's another big issue that's coming down the road.

AMANPOUR: David Rothkopf, do you see that, the trade, the currency issue, as perhaps the most fundamental problem between the two sides?

ROTHKOPF: Well, it's not -- I think it's going to be a problem, because I think they're going to be hard-pressed not to say that China's manipulating their currency, because they're manipulating their currency.

But, you know, the rest of the relationship has a lot of other tensions in it. You've mentioned Iran. There's a problem there. There are problems in terms of trade. There are certainly different views in terms of global warming. There are different views on regional issues.

You know, I think that there's going to be kind of a tough period here as both sides try to figure out, how do they, you know, advance a few interests while pushing back on others?

AMANPOUR: All right. Well, we started by saying 2010 may be the year of living dangerously. We'll certainly keep an eye on it, and it'll be the big international story to look at. So thank you both very much, indeed, for joining me from Washington. Thanks so much.

And now, we'd like you to weigh in on this conversation, as well. At amanpour.com/facebook, we have an analysis on how Tibet, Taiwan and Google have soured U.S.-China relations, as you just heard. Log on to our Facebook page.

And then next, it's not bristles, but the fluffy side of U.S.-Chinese diplomacy that we're going to look at in our "Post-Script," when we're back.

(COMMERCIAL BREAK)

[15:25:55]

AMANPOUR: And now, our "P.S.," on the lighter side of this issue. Two ambassadors from China left the United States for their ancestral home this morning. They are giant pandas.

Pandas have been coming to America ever since U.S. President Richard Nixon visited China nearly 40 years ago. While the president was meeting with the Chinese leader, Mao Zedong, in Beijing, his wife, Pat Nixon, went to the zoo to see the giant pandas. And this panda diplomacy laid the groundwork for generations of giant panda loans to the U.S.

And today, Tai Shan and Mei Lan, two of the most popular residents of the Washington and Atlanta zoos, took a Federal Express jet back to their homeland. Pandas have a notoriously difficult time breeding in captivity, and so now these two are going back as part of an agreement between the two countries to increase the number of pandas in China.

That's it for now. We'll be back tomorrow with a look at new threats to global security. For all of us here, goodbye from New York.

END