Asia’s Importance to the US Economy and Our Future Security
As Prepared for Delivery
Congressman Mark Kirk
Aug 30, 2010
Thank you for this opportunity to discuss my views on some of the most important overseas challenges for American policymakers today and in the future.
Earlier this month, I discussed urgent military and diplomatic problems facing the United States in Europe and the Middle East. Today, I want to talk about our relationships with Asia, and particularly with China and India.
I hope to be brief today because we have a town hall and I want to get to your questions.
Bipartisan congressional cooperation and international respect are essential to America’s security and growth. This is best achieved through dialogue. That’s why town halls are so useful to American leaders. They teach us to receive rather than transmit.
I have one observation from my speech a few weeks ago that I want to emphasize. How we address foreign policy questions will affect the safety and incomes of Americans today and children tomorrow. In short, trade and good relations play in Peoria…and help bring jobs to the heartland. These issues are too consequential to be subjected to partisan exploitation. Our salaries and the safety of our families depends on getting these policies right.
Asia now is more important than Europe to our economic and security future. While much of our State and Defense Department assets are focused on Europe and the Middle East, Asia has already become America’s most important region for a generation. Asia has forty percent of the world’s population; and accounts for half of all international trade, sixty percent of the world’s gross domestic product and sixty percent of all U.S. exports.
Millions of Americans would be unemployed but for customers in Asia.
Trade and investment from Asia created millions of new jobs here in the U.S. Caterpillar – like other major Illinois employers - Boeing, Motorola, Archer Daniels Midland, John Deere – is a company now built on exports, much of which are sold in Asia. Our continued growth will depend in great measure on increased sales of products and services to these emerging markets, especially China and India.
But as important as these markets are to millions of Americans whose income depends on the Asia trade, the future we seek of peace and free markets is not assured.
The nation that presents both the greatest opportunities and the most daunting challenges is China. While the Washington-Moscow hotline dominated the direction of the 20th century, the 21st century is one that will be directed from Washington and Beijing. Running a long-ignored but close second is our relationship with New Delhi.
We must make these relationships work. We have interests in China and cannot refrain from stating them clearly, especially when China proves, as it often does, reluctant to hear us.
Following the policies of Deng Xiaoping, Being’s senior leaders know China cannot pursue its own economic and security policies alone. Many of us worry there are a growing number of junior leaders who are more nationalistic and troubling.
China should envision itself as a leading stakeholder in the rules of free markets and stability, especially in Korea and the Middle East.
The evidence that China is willing to demonstrate these policies commensurate with the size of its economy is discouraging. China’s economic growth over the last three decades has been achieved through its increased access to world markets. The biggest overseas market for Chinese products is the United States; followed by Japan, and Europe. It would seem obvious then that China’s economic future is inextricably connected to the economic growth of its most important overseas markets.
Unfortunately, China is pursuing a growing list of mercantilist policies rather than liberalized trade that is the engine of economic growth.
U.S. and European companies that have been long time investors and even boosters of China now fear the government’s growing restrictions on foreign trade and investments; its vast regulatory bureaucracies with China-only standards; and its continued unwillingness to enforce intellectual property rights.
China will not reach its potential by abandoning international market economies for a kind of crude economic nationalism that repeatedly failed elsewhere. And it is in our interest to work with Chinese leaders who know this, building partnerships with multilateral institutions to encourage cooperation. There are a great many Chinese leaders concentrated in the eastern cities who know that the key to China’s growth is continued connection with the rules and norms of international markets, not separation. They are our allies against a growing tide of economic and military nationalism.
We can also set a compelling example by approving the U.S.-South Korea Free Trade Agreement. This agreement will encourage a virtuous cycle of liberalization and international standards that China cannot leave herself separate from.
In 2005, Congressman Rick Larsen and I formed the bipartisan U.S.-China Working Group in the House of Representatives to encourage dialogue between Congress and China. We have no test for membership and joke that we have all three warring tribes of Congress on China issues in the Working Group: “Panda Huggers”, “Dragon Slayers” and the increasing number of very hard line “Panda Slayers”. While the White House has a nuanced view of China and the Senate sees some good and bad, the House saw only bad, much of it poorly informed.
We learned that the top issue for Americans selling American goods in China was not the currency issue but the routine theft of intellectual property. We learned that while China’s position on Iran is disappointing at best, its navy now is a new partner in suppressing piracy in the Gulf of Aden. It’s a start for a power that needs to back global stability.
As we like to say, sometimes we translate Chinese into Congress – but most times translate Congress into Chinese.
I also joined with Rick Larsen and others to sponsor the U.S.-China Competitiveness Agenda – whose legislative priorities I believe would strengthen U.S. influence in China and America’s competitiveness in the global marketplace.
Our first priority is to increase the U.S. diplomatic presence in China that is currently far too small for a country of such size and importance. We have only five consulates in China, and no diplomatic presence in many Chinese cities with populations over a million. If we are serious in our intentions to protect intellectual property rights, expand U.S. exports and make America more competitive, than we must have a presence in the country that reflects the importance of those issues. I’ve sponsored legislation that would open a new consulate in Fuzhou, and ten smaller diplomatic posts in Chinese cities with populations over a million.
With Rick Larsen and others, I’ve supported legislation to open offices in China to promote U.S. exports, and provide American small businesses with the information and assistance they need to sell their goods and services in Chinese markets.
We have more than a trade deficit with China. We have a knowledge deficit. There are far more Chinese students learning English than American students learning Chinese. I co-sponsored legislation authored by Representative Susan Davis to increase Chinese language and cultural studies in the U.S.
China’s unquenchable need for energy poses one of the greatest threats to international stability and one of the greatest potential opportunities for U.S-China cooperation. China is the world’s greatest polluter.
In its pursuit of ever more sources of oil, China has aggravated the fears of other Asian countries that dispute its claims to waters with sizeable reserves of oil, and has prioritized its relationships with countries such as Iran, Sudan and Venezuela that threaten our security or have caused some of the worst humanitarian tragedies of our time, and which potentially puts it on a collision course with the U.S. and our allies.
On the other hand, China is investing far more resources into developing alternative energies than we are. The challenge for us, then, is to develop the kind of cooperation with China to reduce the world’s consumption of fossil fuels that will encourage Beijing to be part of the solution rather than one of the biggest causes of the problem. That’s why I joined Representative Steve Israel on legislation to authorize and fund joint research and development programs with China to advance carbon capture and sequestration technology; improved energy efficiency and renewable energy sources.
China has to understand that a great world power must accept great world responsibilities if it wants to avoid becoming an international pariah. Iran poses a profound threat to the security of the U.S. and its allies, and, whether it recognizes it or not, to China, which clearly has as much of an interest in a stable Middle East as we do.
Even more urgent is the question North Korea, with its nuclear weapons and the missiles to deliver them, poses to China. No country has greater influence on North Korea than China. Indeed, China might be the only country that has any influence at all on that unpredictable and belligerent regime. If Beijing does not help us to compel North Korea to abandon its nuclear arsenal and cease its frequent provocations against South Korea, Japan and others, it, too, will suffer the consequences of Pyongyang’s dangerous behavior.
If the status quo continues, Japan may one day have no choice but to develop its own nuclear arsenal, and that should be the least of China’s concerns. Given North Korea’s record for exporting arms and weapons of mass destruction technology to some of the most dangerous actors on the world stage, the problem of nuclear proliferation, a problem that threatens the peace, security and economic progress of the world, will become as precarious and perilous as any the world has ever confronted.
Lastly, although China reacts poorly to what it considers interference in its internal affairs, the U.S. must never refrain from forthrightly making the case for the liberty and inherent dignity of people wherever those ideals are threatened. I have defended the human rights of Tibetans, the political autonomy of Hong Kong, and the rights of every Chinese citizen to be governed by their consent and will continue to do so. I believe that is the honor and responsibility of Americans, who live in a country that declared its independence by proclaiming the universality of those rights.
It is also in the best interests of China. For no country, however fast its economy grows, however powerful its military, will ever achieve a position of lasting influence and prestige in the world, if its people are denied the freedom to think and act for themselves. With one party rule, where government sets itself above the governed, comes corruption, unresponsive bureaucracies, and ultimately international hostility and isolation. To be truly great, China must become truly free.
If I’m privileged to represent Illinois in the Senate, I’ll continue to promote a bipartisan, problem solving approach to the major foreign policy challenges of our time, especially the challenges – and opportunities – China poses for U.S. policymakers.
Let me close by touching on the other big relationship we must develop in Asia – the U.S.-India partnership. When India became independent, our relationship got off on the wrong foot. For the Cold War, India was an anomaly. Its military was equipped by the Soviet Union and its economic policy was designed by the British Labor party. Under that economy, India stagnated.
When the Soviet Union collapsed and India adopted free markets, we had a rare chance at a do-over. In hindsight, it was inevitable because despite our differences, India was the planet’s largest democracy with English common to many of its leaders.
We now have growing commercial, military and cultural links to India. I am constantly struck by how quickly Indian and American leaders establish rapport because we are part of multi-ethnic, vibrant democracies. We also share a support for stability. Many Americans do not know that India currently struggles against over a dozen terrorist organizations, highlighted by the recent attack on Mumbai.
If U.S. diplomatic relationships could be compared to stocks, then the U.S.-India relationship is the growth stock of the 21st century. Over the next 20 years, it will be difficult to keep track of the ways the U.S. and India will partner on projects. This not only will help reduce unemployment in America but will also form a new collaboration of democracies to guide the 21st century.
There are many other important issues I haven’t mentioned today. But in order to get to the most important part of this event -- your questions – I’ll stop now. I hope we can explore these and other challenges and opportunities in Asia during the town hall.
Let me close by repeating my central point. Our relationships in Asia, particularly with China and India, will determine not just our future, but the progress of humanity and whether the 21st Century will be a less violent and more prosperous one for all peoples of the world than was the 20th Century. Such a responsibility, such an historic achievement will require all Americans, of both parties, to think and work together, as the world’s leaders; as Americans, and defenders of the values and practices of free people and free markets.