Henry Huiyao Wang: China More Open is More Secure

Phoenix | July 26 , 2024

---

The 15th annual Aspen Security Forum, hosted by the Aspen Strategy Group, was held in Aspen, Colorado from July 16-19, 2024. Dr. Henry Huiyao Wang, President of the Center for China and Globalization (CCG), and Dr. Mabel Lu Miao, Secretary-General of CCG were the only Chinese representatives invited to participate. Over the four-day event, they engaged in face-to-face exchanges with many prominent figures from the U.S. government, strategic community, think tanks, diplomatic delegations, NGOs, businesses, and media, promoting China-U.S. people-to-people and think tank exchanges.

During the forum, Henry Huiyao Wang gave an exclusive interview with Phoenix News. The original text is accessible online.

Sticking to the “small yard, high fence” Strategy: Anti-China Sentiment as American Political Correctness?

Phoenix: At this year’s Aspen Security Forum, you mentioned that China is not just a topic but has become a backdrop—almost every panel touches on China to some extent. What impressed you the most at this forum? How do you think the Aspen Security Forum differs from the Munich Security Conference or other security forums you have attended?

Henry Huiyao Wang: The Aspen Security Forum is probably the most high-end forum on international relations in the U.S. The attendees include key officials from the U.S. government and military, as well as media, think tanks, and major enterprises. The forum focuses on various aspects of international security, including military, economic technology, and strategic security. Although there are participants from other countries, the majority are still Americans. The forum involves U.S. policymakers, strategic decision-makers, and think tank experts, giving it a distinctly official U.S. stance.

Phoenix: Under the tight schedule, the first session was focused on addressing the “China Challenge.” This session did not mention much traditional international relations theories but emphasized economic security and the U.S.-China tech competition. Several speakers mentioned the “small yard, high fence” strategy. It seems that the U.S. political and academic circles are quite satisfied with this strategy as well as its resulting measures, such as sanctions on Huawei and restricting Chinese access to advanced chips. What is your view on their perspectives?

Henry Huiyao Wang: The incumbent U.S. administration views its series of policies against China as effective, including the initial “decoupling,” the later “de-risking,” the CHIPS and Science Act, and the “small yard, high fence” strategy. However, the American business community does not entirely agree with this opinion. Some in the forum questioned whether the U.S. should focus more on introspection, think more about how to enhance its competitiveness rather than shifting the blame onto others; they also mentioned the need for more engagement, communication, and even cooperation between the U.S. and China.

I believe that while the “small yard, high fence” strategy aligns with the current bipartisan consensus on China, it faces many challenges in implementation. Many businesses are not enthusiastic about it, and it has affected economic and trade exchanges between China and the U.S.

Nevertheless, I believe that China needs to further open up, attract more American businesses to China, and “retain” U.S. companies within China to prevent the complete decoupling caused by the “small yard, high fence”strategy. Such decoupling would be detrimental to both the U.S. and China.

Phoenix: You mentioned the attitudes of businesses. Some companies have said that due to the “small yard, high fence” strategy, they are unable to achieve significant profits in China, which impacts their subsequent technological investments. However, some panelists have argued that this is not the case and that companies operating in China are doing well. As you have had contact with many foreign enterprises in China, what is their true attitude towards this situation?

Henry Huiyao Wang: The primary attitude of foreign-invested, especially American companies in China, is to focus on “quietly reaping profits.” When it comes to political statements, such as those concerning the strategic consensus of the U.S. Congress and administration towards China, they often avoid taking a stance or do so only superficially. This is because they have to deal with American public opinion, the U.S. stock market, and American media. If they show favor towards China, they may face political pressures.

Students from Sidewell Friends visiting the Center for China and Globalization (CCG)

China somehow shows more openness in this regard. CCG recently hosted a delegation from a private high school in Washington, which included the children of many State Department officials. They found that what they saw in China was quite different from what they had been told.

I think the same applies to the business community. China needs to attract more American companies, as their prospects in China are promising. For example, I have just met with a MasterCard executive at the forum who mentioned that MasterCard has received more support in China than in India now. Companies can establish themselves in China, whereas entering the Indian market still poses many challenges. He hopes that China will continue to open its door wider, as attracting American businesses and providing level plain field could indirectly influence American policymakers.

Phoenix: The U.S. government seems to think that it can set clear boundaries to the “small yard, high fence” strategy or U.S.-China trade, and that they believe the “yard” within the boundaries can remain the same size. However, in reality, the “yard” keeps expanding and the “fence” keeps rising. For instance, Chinese private companies collaborating with researchers with military backgrounds will be quickly labeled as military technology by U.S. think tanks, making those companies prone to be blacklisted. Do you think there are boundaries to the slippery slope of the “small yard, high fence” strategy?

Henry Huiyao Wang: Since the Biden administration took office, it has aligned with bipartisan consensus and has been even more confrontational towards China than the Trump administration. A series of measure including the “small yard, high fence” strategy, the CHIPS and Science Act, and increased tariffs on Chinese electric vehicles have surpassed the measured taken during the Trump administration, causing significant negative impacts on US-China trade relations.

The “small yard, high fence” only consists of a yard and a fence without any boundaries, making it so general that almost any technology could be placed in the “yard.” Therefore, the best way to counteract this is to continually expand China’s openness, making the scope of its open areas broader and the thresholds for access lower, thereby offsetting the so-called “small yard, high fence” approach from the U.S. While the U.S. is building fences and imposing restrictions, China should go against this trend by expanding its openness and removing the barriers of these “fences.”

Phoenix: China should build more bridges and attract others like a stronger magnet.

Henry Huiyao Wang: Exactly. To cater to mainstream American political correctness, those who are at this forum were all spreading unfavorable narratives about China. However, to influence or change their misconceptions about China, we need more openness, as mentioned in the Third Plenum, which calls for building a higher level of open economic system.

How to Address the Chokepoints in Cutting-edge technology? What is the Relationship Between Openness and Security?

Phoenix: The issue of chips is a major concern. The U.S. strategy involves leveraging its alliances; for example, it tries to control China’s access to photolithography machines and raw materials through its close partnerships with Japan, South Korea and the Netherlands, so as to create a chokepoint. How do you assess the effectiveness of this strategy in practice? Can the development of China’s “neck-choking” industries, especially the chip sector, be better promoted through foreign talent recruitment or other methods?

Henry Huiyao Wang: After several days of meetings, I observed a clear trend in the U.S.: there is a strong desire to avoid direct conflict with China despite a clear intention of restricting China’s development. The aim is not necessarily to plan for a hot war against China but to use various indirect methods to contain China’s growth. This has already become a consensus in the U.S. The “small yard, high fence” strategy and the CHIPS and Science Act all serve this purpose. The CHIPS and Science Act, in particular, is not a unilateral action by the U.S.; it involves a coalition with the Netherlands, Japan, South Korea, and Taiwan to jointly contain the Chinese mainland. To address this, China needs to intensify its efforts in independent R&D and production, and it must also maintain international cooperation. China should strengthen collaboration with other countries and regions to circumvent the so-called “small yard, high fence.”

Given the impending U.S. election, the duration of these measures is still uncertain. Therefore, it is all the more important for China to strengthen international cooperation. For American chip companies, the inability to sell more than half of their chips to China represents a significant loss and negatively impacts their R&D. This situation provides China with a chance to expand its development further.

Regarding talent, the meeting highlighted that half of the AI talent in the U.S. comes from China, which is a significant number. Representatives from OpenAI also mentioned a desire to strengthen the attraction of Chinese talent. I believe the same applies to China; China needs to attract talent from around the world, especially returnees from studying abroad and IT professionals from countries like the U.S., EU, Japan and India, to enhance China’s technological innovation capabilities.

President Xi has emphasized the importance of attracting talent extensively. China can do more in this area. Recently, China has opened up visas-free travels for many EU countries, and I believe it would be beneficial to also open up visa-free travels for U.S.citizens and improve the domestic “green card” system to attract more foreigners to China.

Phoenix: Anja Manuel, the Executive Director of the Aspen Security Forum, said that areas of intense competition between China and the U.S., such as high technology, will gradually experience “De-Risk,” while economic, agricultural, and cultural exchanges will become more “entangled.” Do you think this approach is feasible? Will decoupling in some areas impact mutual trust and cooperation in others?

Henry Huiyao Wang: Anja Manuel’s explanation of the “small yard, high fence” strategy is to control America’s cutting-edge technology, but to encourage as much cooperation as possible in other areas, such as with companies like Coca-Cola, Starbucks, or McDonald’s and Walmart etc.. I think that makes certain sense. The expansion of cooperation in non-security sectors, profitable for American companies, can help garner more public support for China-U.S. relations.

The economic losses in high-end industries, already significant despite being in their early stages, have sparked strong opposition from companies in the Netherlands, Japan, and South Korea,even in Taiwan. As related American companies face increasing losses, opposition to business decoupling is likely to grow. Currently, American companies in China, including Apple and Tesla, are making substantial profits, and these major firms will also voice their concerns. Therefore, the duration of the current government’s “small yard, high fences” strategy will depend on its effectiveness.

More importantly, it is essential to enable American investments become deeply embedded in the vast sea of China’s economy, making it impossible for decoupling. If they attempt to decouple, China should strengthen the ties; if they sever connections, China should build bridges. By fostering a community with closely intertwined interests, greater conflicts can be avoided.

Phoenix: As you mentioned, China should build a higher level of open economic system. If the U.S. uses measures like “chokepoints” to influence us, will this lead to insecurity on the Chinese part and affect China’s openness to the outside world?

Henry Huiyao Wang: Indeed, the 3rd Plenary Session of the 20th Central Committee of the Communist Party of China emphasized balancing development and security, but it also introduced a new concept — “promoting reform through opening up.” This means that the more open the country is, the greater the impetus for reform and, consequently, the greater the security. Therefore, the more open China is, the more secure China becomes. The Third Plenum is a real revelation to me as it points out that despite the complex and high-pressure international situation, the country is still emphasizing opening up, development, and the market economy,not on self-reliance or isolated, domestic circulation. This has surpassed my expectations.

Given the complex and adverse external environment, the country should have focused more on self-reliance. However, the current discourse emphasizes increased openness, reform, and market-driven policies. The notion that “the more open China is, the more secure China becomes”highlights how security serves openness. This is crucial. As the Chinese saying goes, one should not give up eating for fear of choking; instead, China should continue opening up, which is key to addressing various security threats.

What Does People-to-People Exchange Mean for China-U.S. Relations?

Phoenix: I attended a book launch at this forum. There is still some debate in the U.S. about whether a “Cold War” exists between China and the U.S. Some argue that a “Cold War” is already a clear reality, while others believe that interdependence precludes such a situation. Joseph Nye believes that China and the U.S. are in a state of “cooperative rivalry” rather than a “Cold War.” What is your opinion?

Henry Huiyao Wang: The concept of a new Cold War is subject to differing opinions, and it’s noteworthy that in the U.S., there was even a book launch event discussing the Cold War narrative. Some attendees at the event questioned this narrative, noting that today’s era is fundamentally different from the Soviet era. Unlike that time, there are now extensive people-to-people, trade, and investment exchanges between countries, as well as online interactions through the internet, information, and the digital economy. The level of exchange today far surpasses that of the Soviet period.

In my opinion, the notion of a new Cold War is incorrect. While there may be a Cold War mindset and actions reminiscent of the Cold War, achieving a true Cold War state is very difficult in reality. Therefore, it is necessary to oppose the Cold War narrative and strengthen people-to-people exchanges and interactions. For instance, CCG recently hosted students from Sidewell Friends from Washington, DC. Opening up tourism and relaxing by giving visa-free travels for U.S. citizens are also necessary. These means can uncover elements to build a community with a shared future for all, identify commonalities among people, and focus on all human security rather than just national security.

Joseph Nye and Anja Manuel with Henry Huiyao Wang and Mable Lu Miao at Aspen

Phoenix: Some former military personnel and experts in the U.S. have made many comments on security issues in the Taiwan Strait and the South China Sea. How do you view their perspectives? What are their stereotypes, or are there any positive signals?

Henry Huiyao Wang: That’s a great question. This morning we attended three sessions where Charles Q. Brown Jr., U.S. Chairman of the Joint Chiefs of Staff, Antony Blinken, U.S. Secretary of State, and Jake Sullivan, National Security Advisor of the U.S., were present to interpret U.S. policies.

I can sense that there has been some policy shift during this administration over the past three and a half years. When the administration first came into office, U.S. officials, such as those in Alaska, were talking about confronting China if necessary. However, this morning, Sullivan said that conflict across the Taiwan Strait must be avoided at all costs, and that such a conflict would be a disaster for the entire world. This indicates a positive shift in the U.S. stance, as they are now aiming to avoid conflict.

Of course, the U.S. still hopes to restrict China through policies like the “small yard, high fence,” and there are many incorrect judgments or statements about China regarding the Ukraine crisis. However, after the San Francisco summit, the frequency of high-level U.S. officials visiting China has increased. For example, this morning, Blinken mentioned that Yellen, Raimondo, and himself have all visited China, and Sullivan also frequently communicates with Chinese officials. Their voices tend to be more rational and objective, reflecting the necessity of high-level dialogue and communication between China and the U.S.

This morning, three senators and some officials also mentioned that the U.S. need to strengthen cognitive warfare, including support for Voice of America, and so on. Government officials, due to their frequent visits to China, are more cautious about their statements and emphasize the need to avoid conflict. I believe this is an improvement compared to the statements made three years ago in Alaska.

After the meeting between President Xi and President Biden, China and the U.S. resumed official military-to-military dialogues and strengthened cooperation and communication on issues like climate change, fentanyl, and artificial intelligence. American officials who frequently visit China often provide positive and constructive evaluations. However, those who have not visited China, such as some members of Congress, tend to have more negative views of the country. I believe it’s crucial to engage these congresspeople more and encourage more U.S. legislators to visit China personally. After coming and seeing for themselves, I believe they will have different impressions about China.

So, the relationship between China and the U.S. involves not only government efforts but also the exchanges and cooperation among Congress, media, think tanks, business and other sectors. This is very necessary and urgent.

Phoenix: I have heard different viewpoints before, suggesting that cultural exchanges have a very slow impact or are hard to break through existing stereotypes. How do you view the role of people-to-people exchanges?

Henry Huiyao Wang: I think maintaining dialogue and communication is extremely important. For example, at this conference, I didn’t see any Russian. There are two Chinese participants, but not many. I believe it’s essential to keep communication channels open. I mentioned to Jake Sullivan that we hosted students from Sidwell Friends and he said that it’s a very prestigious school with many officials’ children attending. He was quite interested in such exchanges, so it is crucial to continue these interactions. Of course, the process of exchange should aim to achieve the purpose of communication.

Jake Sullivan with Henry Huiyao Wang and Mable Lu Miao at Aspen

Both Trump and J.D. Vance spoke at the Republican National Convention, and I noticed that Vance’s remarks about China were very negative. There seems to be political correctness emerging where being anti-China could lead to nominations, more attention, and a perception of being tougher, which is very detrimental. I believe it’s crucial to expand exchanges, increase visits, and enhance dialogue and communication at all levels. Maintaining contact is very important.

How Should China Respond to the Many Variables in the U.S. Election?

Phoenix: In light of the numerous uncertainties in this year’s U.S. election, including the assassination attempt on Trump, Biden’s COVID-19 diagnosis, and Vance’s strong nationalist stance, how should China respond to these uncertainties?

Henry Huiyao Wang: The U.S. election reflects its political complexity, and the challenges faced by American democracy. From China’s perspective, it does not interfere in the U.S. election, but it should be well-prepared. Regardless of who is in power next, China should stick to its principles, which means adhering to reform and opening-up, following the spirit of the Third Plenum, and maintaining dialogue and communication, thus occupying a moral high ground through external openness.

Moreover, China can also strengthen communication and exchanges, such as increasing interactions with various political parties. Trump said that if he wins the presidential election, he will end the Russia-Ukraine war before taking office, and Vance has also mentioned the need to end the Russia-Ukraine war.

In resolving the War in Ukraine and the conflict in the Middle East, China can be the backbone and a decisive force. Regardless of who becomes the next U.S. president, they will face the task of addressing regional conflicts and bringing peace to the world. China can play a significant role in this regard. If the new U.S. president can see China as a balancing force in resolving conflicts such as the war in Ukraine and the Israeli-Palestinian conflict, or the North Korea issue, it would help ease China-U.S. relations and highlight China as a leading force in promoting peace.

China and the U.S. can enhance mutual trust and cooperation through these methods to dispel the so-called “China threat theory.” As a peace-loving country, China can offer new opportunities for global governance and find ways to cooperate in a multipolar world, which is also a problem the U.S. hopes to address.

Phoenix: Thank you, Dr. Wang. It is indeed a very good perspective to have US and China work together.