U.S.-China diplomatic reset faces unresolved 'contradictions,' expert warns

Nick Schifrin:

And so to talk about China's perspective and what Xi Jinping was after today, I talked to Orville Schell, a longtime China watcher, author. And he runs the Asia Society's Center for U.S.-China Relations.

Xi Jinping used a phrase that seems to me to be very important, dingwei (ph). What does that mean and why is it important?

Orville Schell:

When he used that term, he was suggesting that we should have and may be able to now confect a new position, a new posture towards each other, closer trade relations, and a more amicable form of interacting, so that competition isn't so intense.

Nick Schifrin:

But isn't that the bargain that China has been asking for, for a while?

Orville Schell:

I think they do want collaboration economically. At the same time, they are, I think, remedially going to go towards greater autarchy.

So Xi Jinping's game plan is this. Become as independent as we can in everything from critical minerals, rare earths to E.V.s and battery technology, but get Europe and the United States and Japan, et cetera, more dependent on our supply chains, so we have the levers in our hand. They don't have so many in their hands.

Nick Schifrin:

But is Beijing also asking the U.S. to ignore us concerns about Taiwan and technology and trade and tariffs and all of that, that has really been at the heart of U.S. policy over the last few years?

Orville Schell:

It's interesting that one of the first things that got lofted and before the summit actually began to start in an interactive way between the leaders was that Xi Jinping said Taiwan is the most important issue.

Nick Schifrin:

We heard Xi Jinping say that Taiwan is his red line, is the most important issue, but that was in the readout, the Chinese readout.

Orville Schell:

Right.

Nick Schifrin:

We did not see him say that on camera. Why is that significant?

Orville Schell:

I think it may have been a tactical move. They said to themselves, let's say it early, make it clear, but not let it bollix up the rest of what we're doing.

This is a little like Nixon and Kissinger. They had the Taiwan question too. They pushed it aside until the very end, when they had to come to grips with it.

Nick Schifrin:

It seems to me that the U.S. policy on economics has been to bring factories back in the U.S., diversify in supply chain, rely less on China.

But the message today has been, we want to be in China, we want to be investing in China. Is there a way to square that circle?

Orville Schell:

I think there's a contradiction here.

I mean, I think we're bound to find some offers of Chinese investment in areas that aren't of national security interest for the United States. The only rub is, we know what the pattern is, how this game gets played out. The industry goes in, China learns how to do it, they do it better, and the foreign industry gets shut out, and China has an ascendant share of that market and undersells everybody else everywhere else.

Nick Schifrin:

Beyond President Trump, is the U.S. system, is Congress, are U.S. laws open to some kind of new way with China that is less focused on national security and more focused back on economic cooperation?

Orville Schell:

I think it's possible.

Now, I don't know if Trump has that kind of adeptness to sort of make a -- reach an inflection point and really change the terms of the game. But we have had an expression here in this last day of a willingness on both sides to try.

But now we have to put, as Mao Zedong always said, theory into practice. And that's not easy. And there remains a lot of contradictions that are unresolved.

Nick Schifrin:

Orville Schell, thank you very much.