Dr. George Koo

Prospects for U.S.-China Economic Cooperation

This is the edited transcript of the presentation by George Koo to Panel 2, “Peace Through Development,” of the Schiller Institute’s Nov. 22 conference, “For World Peace—Stop the Danger of Nuclear War: Third Seminar of Political and Social Leaders of the World.”

Dr. Koo is a retired international business adviser in the United States. The full proceedings of the conference are available at the Schiller Institute website.

Good afternoon, everybody! I’ve been invited to talk about the U.S.-China economic cooperation. I think it should be obvious to everybody that that’s a much better alternative than Cold War or even a hot war, or nuclear war.

Let me start by saying, China’s President Xi Jinping had a more than a three-hour-long meeting with U.S. President Joe Biden on the sidelines of the G20 Summit in Bali, Indonesia just a few days ago. Because they actually used simultaneous translation, a three-hour-plus meeting suggests they had a lot to talk about.

Then, the next two days, President Xi meet with leaders of eleven other nations in formal talks, including American allies, like Australia, France, South Korea, and Canada—sort of, a sideline discussion. China ran out of slots for Japan, so that meeting took place at the APEC Summit in Bangkok, Thailand.

It’s very clear that the national leaders were eager for face-to-face meetings with Xi; it’s a measure of how important the relationship of China is to the rest of the world.

The one leader who kind of missed out in meeting President Xi at Bali, is Rishi Sunak, Britain’s new Prime Minister. He totally missed the boat. He was actually penciled in to meet President Xi Jinping, but the meeting was abruptly cancelled with no explanation. Frankly, prior to the meeting with Xi, he was going around announcing that he was ready to send British troops to defend Taiwan—totally out of the blue; no reason to make that kind of a statement. It almost sounds as if he was acting as the point man for the United States, but not for the interests of Great Britain. In fact, we all know that UK is in tremendously dire straits economically, and certainly could have used a nice, friendly meeting with President Xi that could lead to the beginning of increased trade and investment from China to the UK. Well, he completely blew it.

The response from Xi Jinping to Biden’s declarations was to express satisfaction, but with the added hope, and caution, that Biden’s lieutenants will act in concordance and consistent with the commitments as expressed at the summit with President Biden. To work together effectively, there must be trust between the two powers: Developing mutual trust cannot be based on the premise of a pick-and-choose. In other words, we can’t collaborate on A, B, and C, and fight like hell on X, Y, and Z—that just wouldn’t work.

The worst example I can think of, of a fight, of confrontation, is the total embargo on the semiconductor technology that Biden had recently levied against China. At this point, not only can’t U.S. companies sell fabrication, equipment, or software design tools, or the most advanced chips to China, but the Biden White House is also asking companies in Europe, in Japan, and Korea to also abide by the same restrictions. The thinking behind this drastic measure is to stop China cold in developing advances in chip technology.

I would like to end my presentation on an optimistic note.

If President Biden really means what he said at the Bali Summit, I can list a bunch of benefits that would be the outcome. Normalizing trade relations. and removing the tariffs imposed on the imports from China—first imposed under Trump and continued under Biden—will immediately reduce inflationary pressures in the American economy because many of the products made in China are of every-day use, being frequently purchased by American consumers. A lower price would directly benefit their pocketbooks. Removing the tariffs would also mean, that as China responds in kind, this will be good news for American exporters to China, such as American farmers that raise soybean, corn, and the like; California wine makers; Maine lobstermen, and so on.