Kerry's Remarks at 6th Round of the U.S.-China Strategic and Economic Dialogue

Remarks

John Kerry
Secretary of State

MODERATOR: (Via translator) The Joint Opening Session of the sixth round of China-U.S. Strategic and Economic Dialogue now begins. We will have Vice Premier Wang Yang, Secretary John Kerry, Secretary Jacob Lew, and State Councilor Yang Jiechi. (Applause.)

VICE PREMIER WANG: (Via translator) Secretary of State John Kerry, Secretary of Treasury Jacob Lew, ladies and gentlemen, good morning. It is indeed a great pleasure for me to co-chair the sixth China-U.S. S&ED in Beijing, together with Secretary Kerry, Secretary Lew, and State Councilor Yang Jiechi.

Just now, President Xi Jinping attended the joint opening ceremony, and delivered an important speech. He talked about the importance of building a new model of major country relations, and also he expressed his expectations on this round of S&ED. State Councilor Yang and I, being President Xi's special representatives, are tasked to follow upon his expectations and ensure that this dialogue will produce positive results.

China is the largest developing country in the world. The United States is -- our two countries, in terms of national conditions and systems. This means our interests may diverge. And when we speak, we speak for our respective interests. We may look at things with our own perspectives, and sometimes we even have differences or disagreements. However, each year our two big countries, our two sides, get together and discuss the cross-cutting long-term and strategic issues. This, per se, is the best testament to the new model of major country relationship featuring no confrontation, no conflict, mutual respect, and (inaudible).

Dialogue has already become a symbol for this new model of major country relations. Dialogue is an effective way to improve the global (inaudible) structure. Here I want to borrow a few words from Ambassador Baucus during his recent speech. He said that, "The S&ED is our premier forum in talking through tough issues. Its main purpose is to bring coherence and predictability to our discussions on all issues in the bilateral relationship. Over the past five years, the S&ED has helped to (inaudible) our discussions with China's leaders. And it also helped build toward strategic trust." I agree with Ambassador Baucus's assessment of the S&ED.

Now, many people, they follow very closely on the differences between China and the United States, and they have failed to see so many commonalities we share on important issues. The S&ED is a vibrant -- it is the constructive interaction between two countries with a different culture, system, and point of views. So we have every reason to believe that this dialogue will produce fruitful results. And in the next two days we will make the utmost effort to make sure that the outcomes of the dialogue will create greater opportunities of cooperation for both countries.

I also understand that many people in the world are watching how China and the U.S. will perform on the issue of climate change in this round of dialogue. Today I want to respond to their concerns with concrete action. I am going to keep my remarks very brief, so that we will have an efficient opening session and (inaudible). (Applause.)

SECRETARY KERRY: Well, thank you, and good morning, Vice Premier Wang and State Councilor Yang Jiechi. It is a privilege to be here with you today. And I wanted to thank all of you today for the privilege for all of us to be able to be here to not just have this strategic dialogue, but also to celebrate the 35 (inaudible) years of diplomatic relations between the United States and China.

It’s more than fair to say that the scope of our relationship was unimaginable when President Nixon made his historic visit, which President Xi Jinping referred to, back in 1972. And we are very grateful to President Xi Jinping for coming here and opening this session. It is a strong statement about the importance of this dialogue. And we will meet with him tomorrow and have an opportunity to talk further about the discussions that we had.

I had the privilege of coming here to this (inaudible) last year when I was honored by State Councilor Yang Jiechi, who (inaudible), where President Nixon and Mao Zedong met to open up this relationship. And it was a good reminder of the importance of what we are trying to achieve and, frankly, the importance of the things that we must achieve together.

Back in 1972 it was a handshake between two leaders that was the leading edge of America’s engagement with China. Two hands, two leaders met across the great divide. Today, it’s in all of our hands to be able to realize the full promise of our partnership. So, I want to welcome the other members of both the Chinese and the American delegations. I am particularly pleased to be here with my co-chair, the Secretary of the Treasury, Jack Lew; with Federal Reserve Chair Janet Yellen; with our Secretary of Commerce, Penny Pritzker; with the Secretary of Energy, Ernie Moniz; with our Trade Representative, Mike Froman. As I look down the line with many other members of government, the top advisors (inaudible) my deputy, (inaudible) Deputy Secretary of State William Burns -- in fact, as I looked at the (inaudible) of people from the American delegation here, it is obvious to me that not a lot is getting done back in Washington today. It is being done here.

The fact is that the strength of the delegation that has come here to have this dialogue with you is really a statement in and of itself that underscores that our shared prosperity will depend on how well we work together to attract trade, promote trade, bring investment to both of our countries, and facilitate commercial activity and innovation. Our shared security depends on the good-faith effort to understand each other’s interests and our intentions. So it is not just a privilege to be here, it is a duty. It is a responsibility for all of us.

I heard many times President Xi Jinping just now talk about a great country relationship, a new model. I would say to you that a new model is not defined in words. It is defined in actions. The new model will be defined by the choices that we can make together. And that is why it is important for us to make the most of these next two days as we share the kind of inter-disciplinary experience that your delegation and our delegation have gained over the years.

I want to also underscore to you that every time that I visit Beijing my connection to the people of China and our connection, the United States's connection, I believe, is strengthened and it is renewed. There are actually ties that I can look at fondly within my own family, going back in China. My grandfather was born in Shanghai, and he spent his early years of youth here, with a father who was engaged in commerce, in trade here in China. And I would personally never forget, as a Senator, one of my earliest trips to China as a Senator in 1994 was leading a delegation of business executives from Massachusetts. And even then the satellite dishes and the construction, the cranes which reach all across the horizon, showed the untapped extraordinary dynamism of the Chinese people.

I heard the President talk a moment ago about taking mounds of earth and turning it into buildings. Well, I saw that firsthand when I looked across the Pudong. In the early 1990s there were mostly rice paddies. Now there is a city the size of Hong Kong, an extraordinary statement to the incredible capacity of China.

Today, China’s rise is, obviously, no longer an abstraction. It is something that we are living with, not anticipating in the future. And it is as evident as those skyscrapers over the Pudong, or the different extraordinary architecture here in Beijing, or all across your country. It is a remarkable statement about your journey.

One thing is clear. One thing leaps out at us through all of this: We have a profound stake in each other’s success. It is not lost on any of us that throughout history there has been a pattern of strategic rivalry between rising and established powers. But I will say to you today that President Obama, nor any of us who have come here to represent our country, believe that that kind of rivalry is inevitable. It is not inevitable. It is a choice. And so, being here this morning with Vice Premier Wang and State Councilor Yang, and with my counterpart, Foreign Minister Wang Yi, and with our ambassador, former Senator Max Baucus, I can tell you that we are determined to choose the path of peace and prosperity and cooperation and, yes, even competition, but not conflict. When the United States and China work with each other, we both stand to gain a great deal. And that’s why we are committed to a new model of relations, of great country relationship, a mutually beneficial relationship in which we cooperate in areas of common interest and constructively manage the differences.

Now, I want to emphasize -- I mentioned this last night in our conversations at dinner -- when I read some of the commentary about the United States and China, when I listen to some of the so-called experts, and they talk to us about our relationship, too many of them suggest that somehow the United States is trying to contain China, or that things that we choose to do in this region are directed at China. Let me emphasize to you today the United States does not seek to contain China. We welcome the emergence of a peaceful, stable, prosperous China that contributes to the stability and the development of the region, and that chooses to play a responsible role in world affairs. We may differ on one issue or another. But when we make that difference, do not interpret it as an overall strategy. It is a difference of a particular choice. And we need to be able to continue to put the importance of this relationship, the world's two largest economies, we need to be able to understand the importance that we will play in choices for countries all across this planet.

President Obama sent a letter to the American and Chinese delegations here today. And in that letter he writes: “We should use the S&ED to demonstrate to the world that even in a relationship as complex as ours we remain determined to ensure that cooperation defines the overall relationship. It also is why we need to build our relationship around common challenges, mutual responsibilities, and shared interests, even while we candidly address our differences.” Both President Obama and President Xi remain committed to building a long-term partnership based on mutual interests and mutual respect. And I thank President Xi for his statement today making that absolutely clear.

Over the next two days our countries will exchange views on a range of bilateral, regional, and global challenges. The depth of our relationship is evident in our wide-ranging strategic track agenda, whether it’s working towards denuclearization of the Korean Peninsula; peacefully resolving the Iranian nuclear issue; advancing the political solution to the crisis of Syria; or promoting peace in Sudan, South Sudan, Afghanistan. When the opportunities for a positive, open, and constructive relationship between the United States and China grow, the possibilities for peace and prosperity in the world grow even more.

As the world’s two largest economies, our futures are inextricably entwined. No politician, no leader, could possibly put the genie of globalization back into the bottle. What we need to do is learn how to manage it. And we have to tame the worst effects of it, and put the best possibilities of it to use for all of us. If China succeeds in rebalancing its economy, the global economy will benefit and so will we. That is why China’s progress towards a consumption-driven, market-based economy is so important.

Ultimately, the true measure of our success will not be just whether our countries grow, but how our countries grow. And that is one area where we have made real strides in the deepening of our relationship on climate change and clean energy. On my last visit to China I saw with my own eyes what’s possible when we work together. We visited the Joint Foton-Cummins clean engine facility here in Beijing, and I saw that we’re not just transforming the way we use and produce energy. We also saw that we are creating jobs, we are building clean engines, and strengthening our economies.

As part of our Climate Change Working Group, we’ve already launched five initiatives to zero in on some of the key drivers of greenhouse gas emissions. So, step by step, we are shifting our focus from the difficulty of compromise to the inescapable reality of a clean energy future. The solution to climate change is energy policy. And energy, as a market, is the biggest market the world has ever seen. So we both are sharing an enormous economic opportunity, even as we are looking at the possibility of providing jobs for our people, having healthier societies, cleaner air, and greater energy security for the long-term future.

The truth is that providing solutions to the challenge of our energy policies is not a brake, it is not a restraint on economic growth. It (inaudible) economic growth. It is the engine of economic growth. So, the importance of this dialogue that we are having these two days really couldn’t be any clearer. I’m confident that the next two days are going to be productive, we are going to build on the dialogue that we have achieved over the course of the last five years. And, despite our differences, our two nations have the ability to find common ground. That is the foundation on which we need to build decades of prosperity in the future, and also build the possibilities of stability and peace at the same time. That is the road that President Obama commits us to follow, and that is the road that we look forward to defining with you, not just in these next two days, but over these next months and years together.

Thank you. (Applause.)

SECRETARY LEW: I would like to express our appreciation to President Xi, Vice Premier Wang, Councilor Yang, and the colleagues (inaudible) dedication on both sides for the -- so much effort into making this S&ED a success. And I would particularly like to thank Vice Premier Wang. He champions China's interests while working (inaudible) to build a positive, cooperative, and comprehensive bilateral economic relationship with the United States.

As President Xi Jinping just noted, since the United States and China first established diplomatic relations 35 years ago, economic relations between our two countries has grown beyond what anyone could have imagined. The U.S. and China trade exceeded $520 billion last year, 200 times the trade 35 years ago, which was then less than $3 billion.

We meet for the sixth round of the S&ED with the common goal of advancing economic opportunities for our workers and countries. As the world's two largest economies, we both depend on open, global trading, a system in which workers and companies can compete on a level playing field. It is our shared interest to foster productivity growth through research and innovation, to protect intellectual property, preserve open markets, and to build a more stable global financial system that is less prone to crisis.

In their historic meeting (inaudible) last June, President Barack Obama and President Xi agreed to build a bilateral relationship defined by practical cooperation in areas of mutual interest, while constructively managing differences. Their commitment marked an important (inaudible) point in the U.S.-China relationship, a chance to work together to establish the rules of the road that will mutually benefit our two nations, the Asia-Pacific Region, and the global economy.

It is the responsibility of great nations to rise to this challenge, and I am confident that both countries have the necessarily agility and resolve to achieve the vision of our two presidents. In the United States the economic recovery has continued to strengthen in 2013. Over the past 52 months, American businesses have created over 9.7 million new jobs, the longest period of job growth in our history. And June's employment numbers mark the first time since January 2000 that we have seen total job growth above 200,000 for 5 straight months.

These (inaudible) strengthen and further (inaudible) and household balance sheets in the housing market continue (inaudible). Of course, the Great Recession was deep, and there is still work to do. But we continue to see a strengthening recovery in the United States. Our economy and our people have once again proven their resilience and determination.

China is in the process of undertaking major economic reforms, recognizing that future economic growth requires a fundamental shift in economic policy, has laid out (inaudible) in November of last year. We welcome this commitment and China's economic growth. A prosperous China that grows in ways consistent with international rules and norms will contribute to the strong, sustainable, and balanced growth of the global economy. We support China's effort to allow the market to play a more decisive role in the economy and rely more on household consumption to drive China's economic growth. Moving to a market-determined exchange rate will be a crucial step, and we look forward to working with China as it deepens financial reforms and becomes more integrated with the global financial system.

The United States and China combined comprise (inaudible) half of the world's GDP. The United States-China bilateral relationship will, in large part, help shape the 21st century. And it is critical for us to continue building on our areas of economic cooperation and work together to tackle the challenges. We do not always agree, but our (inaudible) common interests are far more important than the individual challenges that we confront as part of our overall bilateral relationship.

The Strategic and Economic Dialogue has led to important tangible results for both sides, and I am sure that we will continue to make concrete progress during the sixth round. We look forward to working diligently and cooperatively and sincerely over the next two days, as we address the challenges that we face, and we build a strong foundation for continued cooperation with the United States. Thank you. (Applause.)

STATE COUNCILOR YANG: (Via translator) Secretary John Kerry, Secretary Jack Lew, Vice Premier Wang, friends, ladies, and gentlemen, let me, first of all, express my warm welcome to Secretary Kerry, Secretary Lew, and all other Chinese and U.S. colleagues present here.

President Xi Jinping's important remarks just now offered us many inspirations from the strategic perspective. He revealed the precious experience in the development of China-U.S. relations over the past 35 years, since the establishment of the diplomatic ties, and set out the blueprint for promoting a new type of major country relationship. Secretary Kerry also mentioned the great message from President Obama, which also provided important guidance to us. The two presidents have explicitly urged us to make this sixth round of China-U.S. Strategic and Economic Dialogue a successful one. The mission of this round of dialogue is focusing on the theme of creating a new model of major country relationship, to have (inaudible) straightforward discussions on a number of major strategic issues of common interest, to actively explore converging interests, reduce misunderstanding and suspicion, and expand consensus and cooperation, and to facilitate as many outcomes as possible so as to provide positive energy and a new impetus to our bilateral relations.

As part of the S&ED, the strategic dialogue, or dialogue on the strategic track, is an important platform for the two sides to build strategic consensus, avoid strategic misjudgement, and expand strategic cooperation. Since its launch in 2009, the Strategic Dialogue has produced over 200 deliverables, as well as a number of new mechanisms, including the strategic security dialogue, the Asia Pacific consultations, and a climate change working group. I am confident that, under the common guidance of the two presidents and these joint efforts (inaudible), this round of strategic dialogue will achieve new consensus and more outcomes.

We need to increase mutual understanding and trust for this round of strategic dialogue. We will have in-depth exchange of views on our bilateral relations with respect to Asia-Pacific policies, and the major regional and international issues of economic interest. I believe this will help both sides understand each other's strategic intention in a more accurate and comprehensive way, and avoid misunderstanding and misjudgement.

We need to reduce and resolve differences for the dialogue. China and the United States (inaudible). We have extensive and (inaudible) common interests, which have become much more (inaudible) over the past 35 years. (Inaudible) changes in the international situation have presented China and the United States (inaudible). Meanwhile, we also have differences and disagreements which should be managed on the basis of mutual respect and (inaudible) differences, and in a constructive way through dialogue, rather than confrontation.

China is happy to continue its discussions with the United States on this matter, and prevent any unintended disruption (inaudible) of our relations. (Inaudible) highlights (inaudible) on the ground. A new model of major country relationship (inaudible) strategic dialogue (inaudible) mechanisms within this framework (inaudible) and continue to enrich our bilateral relations for the benefit of our two countries.

Ladies and gentlemen, to build a new model of major country relationship between China and the United States has now become an important (inaudible). This process will not be successful overnight, nor will (inaudible) smooth sailing. What is needed is spirit of (inaudible) of making this round of S&ED successful. Let us work together to continue (inaudible) relationship between China and the United States. Thank you. (Applause.)

MODERATOR: (Via translator) This is the end of the Joint Opening Session of the sixth round of China-U.S. Strategic and Economic Dialogue.