Down to Business: Ambassador Burns on Navigating the World’s Most Important Bilateral Relationship
In early March 2022, the new US Ambassador to the People’s Republic of China, Nicholas Burns, touched down in Beijing. In the nearly nine months since his arrival, Ambassador Burns has hit the ground running, working tirelessly for US interests in China through engagements with both government and business leaders. Shortly before China’s 20th Party Congress, AmCham China President Michael Hart sat down with Ambassador Burns for a frank and wide-ranging discussion on the state of US-China relations. After the Party Congress and the Biden-Xi meeting in Bali, we caught up again with Ambassador Burns to ask some follow-up questions.
Michael Hart: Let’s start with your international experience. How has your experience as US Ambassador here been informed by other postings that you’ve had in your career with the State Department or otherwise? How are [those experiences] helping you specifically here?
Ambassador Burns: First of all, let me just say thank you for the great engagement that we have with the American Chamber. You’re vital for us and… our economic commercial relationship is at the center of our relationship. We really value the dialogue with you and also with all the members.
This is a unique position to be American Ambassador in China at this time, given the complexities in our relationship. When President Biden called me to ask me to take the job, of course I accepted, because, as a career diplomat… I think it’s one of the great challenges that we face around the world these days. We have a very large and very competent Mission here filled with people who are experts on every aspect of the relationship. So I take it as my job to help people in our Mission succeed, to be working on the issues that are critical to the future of our country, such as our very competitive relationship, the military competition between us in the Indo-Pacific, and the building up of our very important alliances with Japan, South Korea, Australia; our defense alliances and treaty agreements with the Philippines and Thailand; our strategic relationship with India.
We obviously are focused on technology, and the competition between us in the digital realm, from AI to machine learning to quantum sciences to biotech. We’re focused on economics and trade. That’s really fundamental to us. Can we help to create here a level playing field for American businesses, knowing that, if we can do that, American business can succeed here? You’ve demonstrated that with more than 1,100 companies present here, with thousands more based in the US trading, importing, and exporting with the Chinese. It is a critical relationship for us, worth $718 billion in two-way trade last year.
“I believe competition on many different major issues will continue to be a primary element in our relationship. We also believe this competition should not veer into conflict and that the United States and China must manage the competition responsibly.”
Michael Hart: One of the wake-up calls for the American business community in Shanghai was supply chains. People did not necessarily realize how many things were running through Shanghai. Now, as the Biden Administration continues to roll out plans for sustainable supply chains, China is asking itself, where do they fit in in the global supply chain? I’ve also had people ask me if US companies are “anti-China” and I say no, people are just looking to rebuild their supply chains. So, the question is, where does China fit in in the global supply chain? Is it realistic for China to be a priority market for the US and multinational companies in terms of supply chain? How do you see that?
Ambassador Burns: To a certain extent, what we’ve learned from nearly three years now of the global pandemic is the over reliance that some of us have had on supply chains from China in critical materials, critical for the functioning of our economy or for the industrial enterprises of our most competitive industries. So I think there’s been a major movement to try to make sure that we control our own [supply chains] in certain industries, [so] we have greater access and more reliability about supply chains. This is not just a lesson that we’ve learned; the Europeans [and] Japanese have learned this. You’ve seen movement around the world to make sure that, in a crisis, you control your destiny, and you control your own fate, so your economy can continue to perform at a high level, and you’re not at the mercy of an autocratic power that might deny you critical materials. So, that’s a lesson we’ve learned, and you’ve heard our President, other senior members of our government and many members of the business community talk about that.
One of the motivations for the CHIPS [Creating Helpful Incentives to Produce Semiconductors] and Science Act is to make sure that we’re not only competitive in semiconductors, but that we actually have fabs in the United States that are world class. So that in a crisis, semiconductors – which are the building blocks of everything in a 21st century economy – are closer to home. The Chinese, I think in a way, have also learned that lesson, as I look at what the government here is trying to do. They’re trying to alter supply chains, they’re trying to insulate themselves, hypothetically, from pressure from the rest of the world in the future.
I often get asked about decoupling, but it’s not a word that we’ve used. I always say in my talks with the business community, we’re not actively seeking to decouple two economies that have come together over 45 years, a $718 billion two-way trade relationship annually, with thousands, tens of thousands of companies interacting with each other. If either side is beginning to decouple, it’s more China than the United States. They’ve talked about it more – they don’t use the word – but that’s certainly what they’re signaling in some respects, and they’ve been taking actions far longer than we have.
Obviously, you know there are two areas I would highlight here. One is CFIUS, the Committee on Foreign Investment in the United States. We now, for a good 20 years, have been screening foreign investment opportunities in the United States in those areas that are critical to our national security. We have a right to do that, and it’s been very successful. The President just signed an Executive Order that sharpens the tools that CFIUS has to do that.
Second, on the other end of the spectrum, my own advice when I talk to American businesses here is, we want you to succeed, we know that most American companies… want to stay here. [Many] companies may be hesitating on future investments because of uncertainty over China’s economic policy. But my own advice to companies as Ambassador is stay away from investments in China that would assist the growth and development of China’s military industrial sector. We don’t want our national security interests diminished and affected by American investments to help the Chinese compete with us in areas that are core to our national security. Those are very important areas for businesses to think about in a responsible way.
Michael Hart: I dialed into one of those calls you did to help educate us. That also helps to answer a question we had around what is the US Embassy doing to help US companies understand new rules coming out that are specific to China. I think you’ve covered that pretty well. Another issue is flights. Flights between China and the US are at historic lows. What are your thoughts on how this impacts the US-China relationship? Is there anything you know of with the Department of Transportation and what they’re trying to do to get flights moving forward, or the challenges that they are dealing with in trying to get those flights between the US and China going?
Ambassador Burns: This has been a major challenge and a major frustration, frankly. Every country has a right to design its own anti-COVID measures. But they also have an obligation to respect our own bilateral agreements. In this case, we’re very frustrated by the fact that there are so few flights by our three big carriers – Delta, American, and United – into the major Chinese cities. This harms business, it harms Americans who want to study here, who can’t get here easily, it harms all of us who work here officially and try to come in and come out.
The fact is that the People’s Republic of China has not met many of their obligations to us and to our air transport agreements. And so, the Department of Transportation in Washington has been forced – on a reciprocal basis – to impose limits on Chinese airlines because our airlines are being put at a disadvantage. And I really hope – perhaps we’ll see this later in the autumn, I hope following the 20th Party Congress – that we’ll see more flexibility on the Chinese side, and we’ll see them adhering to the letter of our bilateral agreements. Because air transportation is fundamental to the functioning of a modern economy and modern society. It is very difficult to get into this country; it’s difficult to get out of this country.
Michael Hart: You’re right, transportation is a key. As we have tried to explain to anybody who will listen that, if you can’t have flights in and out, then you won’t have new foreign direct investment (FDI), because people won’t be able to come in and approve projects. There is starting to be some realization of that as the FDI numbers fall.
Ambassador Burns: I’ve heard businesspeople tell me, and these are senior American businesspeople representing major American firms, “How can we plan a major investment here if my CEO or Chairman, if he or she can’t come here, kick the tires, be on the ground, and talk to Chinese officials?” And until that happens, we’re not going to see – and we haven’t seen – substantial new investment by American, European, or Japanese firms here across the board. That’s one of the reasons why.
Michael Hart: I completely agree. You guys at the US Mission have completely opened visa services for Chinese nationals, that is another area where China has not fully reciprocated. This has had a serious impact on the business community. Sometimes I don’t think the Chinese public knows completely that US visa services are open, just through rumors or because you don’t see as many long lines out front anymore. What are your views in terms of how you have prepared to reopen and allow folks to get visas to the US?
Ambassador Burns: This is another example where, in implementing dynamic zero-COVID, the Chinese government has put Americans at an enormous disadvantage, and other foreign populations as well. We think we have about 290,000 Chinese students in the United States. The United States remains the leading destination for Chinese students. We just had a major fair here two weeks ago at the Embassy on a Saturday for Chinese students and their parents to familiarize themselves with the visa process, and also, most importantly, educational opportunities in the United States. Our doors are open to Chinese students. We want Chinese students to study in our country.
It’s been extremely difficult, however, for American students to get visas; the doors have been closed. We think we only have max 400 American students in China right now, versus the 290,000 Chinese students in the United States. And it’s in our interest to have young Americans come here to learn Mandarin, to learn about the culture and history of this extraordinary country that we’re all living in, and maybe to be the next Michael Hart, or the next person leading one of our major American companies here, or to be an American diplomat here. But they need that experience, and they’re not getting it and the doors haven’t been opened. And again, here’s another example of almost a double standard, where our doors are clearly open. I went down to the Consular Section this summer to see the visa process in operation, we had lots of officers working there. It’s been difficult to get American students in here, difficult to get the visas, and it’s difficult to travel here. And then there are all sorts of restrictions that the students [in China] are locked down in their campuses and can’t have a normal student experience. So, I do think it’s incumbent upon the authorities here to be more flexible, to open up people-to-people contacts.
Michael Hart: I also want to ask about social media. I know you’re very active on social media from posting about policies and human rights to high-speed trains and baseball. Tell us about the importance of social media and how you’re trying to use it – both inside and outside of China.
Ambassador Burns: It’s a powerful instrument, and it’s a necessary one. The Biden administration encourages all of the Embassies to take part in the international debate… We have an embassy Weibo account, we have WeChat accounts, we have a Twitter account of 1.2 million followers, I have my own separate Twitter account. What we’re trying to do here is speak to the Chinese people and give them accurate information about us. We try to give the Chinese people an accurate portrayal of who we are as a country, what we believe in, and correct basic misstatements by their own government about us.
There’s a powerful censorship body here. When Secretary Blinken gave his big speech on the US-China relationship, the major speech of this administration, it was censored on WeChat and Weibo within two hours. We put it back up a couple of days later and it was censored within 20 minutes. But in that two-hour span, and in that 20-minute span, you can get a lot of people looking at it. We believe in freedom of speech, freedom of the press, and we think that people have a right to free and accurate information. That’s our goal, and to show respect to the people of China, respect for their culture, and their civilization, their history.
There are times we use our social media presence to debate the government here, to correct misstatements by the government, to criticize. So, I think we’re never going to live in a world where social media is not a presence.
Questions Post Party Congress and G20 Biden-Xi Meeting
What do you see as the biggest takeaways for US business from the 20th Party Congress? Are you optimistic about the future trajectory?
Ambassador Burns: On the 20th Party Congress, we recognize that important changes are happening in the PRC, and we are paying close attention. It will take time to see how those changes are translated into personnel and policy. One of the primary issues that arises from the 20th Party Congress is whether China will move in a more statist direction on economic policy. I’ve heard from many in the US business community questions about the PRC’s future economic policy in the year ahead.
The two Presidents met in Bali. Is that face-to-face meeting in itself a reason to celebrate and do you think it’s the start of a new bilateral footing?
Ambassador Burns: I was with President Biden for the Bali meeting with President Xi Jinping. It was a candid meeting where the two leaders spoke about their respective priorities and exchanged views on the most important regional and global challenges. President Biden was clear that we will compete with the PRC on the many issues where we have disagreements. On Taiwan, the President differed strongly with the PRC’s aggressive actions which undermine peace in the Taiwan Strait. President Biden raised US concerns about China’s non-market economic practices. It was important that our two leaders met face-to-face. The meeting was aimed at building a floor in the relationship and managing the competition responsibly. From our perspective, the meeting did allow us to take some steps in that direction. As President Biden said after the meeting, the two leaders were blunt with one another about places where we disagreed. I believe competition on many different major issues will continue to be a primary element in our relationship. We also believe this competition should not veer into conflict and that the United States and China must manage the competition responsibly.
We’ve heard a lot about competition between the two sides, but where do you see the largest areas for US-China engagement and cooperation?
Ambassador Burns: China and the US have a joint interest as well as a global responsibility, to work together on transnational challenges – such as climate change, global macroeconomic stability including debt relief, health security, and global food security. At their meeting, President Biden and President Xi agreed to empower key senior officials to maintain communication on these and other issues. The two leaders also agreed that Secretary of State Blinken will visit China early in 2023 to follow up on their discussions. Our message to the PRC is: let’s move forward when it is in our interest to do so. But at the same time, the US will also continue to raise our strong human rights concerns about Xinjiang, Tibet, Hong Kong, and other issues. We are going to continue to compete with the PRC to create a level playing field for US businesses here, but we also believe this competition should not veer into conflict and that the United States and China must manage the competition effectively and maintain a peaceful relationship.
This article has been edited from the original transcript for length and clarity. The interview took place in early October, prior to the meeting between President Biden and President Xi at the G20 in Bali, Indonesia. The follow-up questions were answered in late November following the 20th Party Congress and G20 meeting.