Return to Transcripts main page


China's Rising Economic and Diplomatic Influence

Aired November 16, 2009 - 15:00   ET



CHRISTIANE AMANPOUR, CNN ANCHOR: Tonight, U.S. President Barack Obama's first official visit to China. Amid much hand-wringing about who's on top, we focus on China seeking to be a global power and whether that means it'll develop a sense of global responsibility.

Good evening, everyone. I'm Christiane Amanpour, and welcome to the program.

President Obama today arrived in Beijing, saying the U.S. has nothing to fear, even if China does feel superior about its power. Obama is trying to win help from China's president, Hu Jintao, and he's offering a more conciliatory approach. This is welcome in Beijing, as is the Obama administration's tip-toeing around human rights, putting off meeting the Dalai Lama, for instance, and not specifically criticizing China's human rights policies.

So tonight, can the U.S. count on Chinese help with Iran and North Korea and all the other places that China is now heavily invested? That angle from CNN's John Vause, reporting from Shaanxi province.


JOHN VAUSE, CNN CORRESPONDENT (voice-over): Right now, China is in a steel-making frenzy.

(on-screen): It never stops?

FRED HSU, GENERAL STEEL HOLDINGS: Never stops. If it stops, we've got a problem.

VAUSE (voice-over): Fred Hsu is manager of one of China's biggest non-government steel mills, and he sees only soaring demand for years to come.

HSU: Our demand is 5-, 10-year projects, these large infrastructure projects. No, there's no drop-off in demand that we've experienced.

VAUSE (on-screen): At peak capacity, which it's running at right now, this steel mill is capable of producing more than 4 million metric tons of steel each year, but that's less than 1 percent of the total output of steel for all of China.

(voice-over): No country more steel. This past September, China accounted for almost half of total global output. And to feed the rivers of liquid iron, no country imports more iron ore.

(on-screen): All of this is iron ore, and there are different shades and different colors. In the distance, the black pile comes from the Ukraine, while this smaller pile with the pink hue, that comes from Brazil. Over there, the brown iron ore comes from Australia. And in many ways, this is a snapshot of China's global search for resources.

(voice-over): To secure those resources, everything from aluminum to zinc, China is offering billion-dollar package deals around the world, especially in Africa, with investment, aid, and even military hardware, no- strings-attached, checkbook diplomacy, in some cases, critics say, negating efforts by Western governments which have insisted on political and economic reforms and human rights.

George Nicholls runs a risk management company in Johannesburg and has examined more than 20 such deals.

GEORGE NICHOLLS, CEO, PASCO RISK: Chinese economic output, Chinese products, Chinese economic growth, Chinese exports, all (inaudible) benefit.

VAUSE: But long term, he says, there appears little gain to most Africans.

China is also locking up resources in Latin America, where trade has increased tenfold in less than 10 years, replacing the U.S. as the biggest trading partner to Brazil and Chile.

DAVID ROTHKOPF, CARNEGIE ENDOWMENT: China recognizes that, by opening up commerce to these parts of the world, they can get other benefits. They could help advance other agenda items. Taiwan is an important agenda item for the Chinese.

VAUSE: Isolating Taiwan, U.S. ally and long considered a renegade province by the mainland, continues to be a strategic goal. In recent years, three countries in the region have switched diplomatic ties from Taipei to Beijing, all through economic incentives.

For China's steelmakers, though, that kind of politics doesn't mean a whole lot. They say business is business, and as business here booms, so, too, will this country's global influence.

John Vause, CNN, Shaanxi province, China.


CHRISTIANE AMANPOUR, CNN ANCHOR: And joining me now from Beijing, Victor Gao, a former official in China's Ministry of Foreign Affairs and once a translator for the former leader, Deng Xiaoping.

Welcome to the program, Mr. Gao.

We heard from John Vause there the amazing amount of business that China has around the world.


The question is, does China have a responsibility not to overlook human rights issues and, furthermore, a responsibility as a world power in the Security Council to also help on situations of mutual concern, such as North Korea, Iran, Myanmar, et cetera?

VICTOR ZHIKAI GAO, EXECUTIVE DIRECTOR, BEIJING PRIVATE EQUITY ASSOCIATION: Yes. On human rights issues, two points. First of all, if you look at the human rights issue in China, we don't have a perfect situation. But if you look at today's human rights issues and comparing that with what we had 30 years ago, 20 years ago, 10 years ago, then China has made great improvement.

And I'm sure human rights situation in China tomorrow would be much better than today. That's the goal. We need to talk about human rights. We need to improve our own track record.

Now, when we are talking about human rights situations in other countries, then China is very, very cautious, mainly because China's foreign policy is underlined by the principle of non-interference in each other's internal affairs. Therefore, China is not accustomed to lecturing other countries about their track record of human rights. And whenever such issues prop up, China actually will need to engage in quiet diplomacy rather than confronting the others or lecturing the others, because China really believes this is the much better approach to deal with these issues.

AMANPOUR: Well, the question is, will it engage? I hear you saying incrementally China has got better on these issues, but there are still huge questions.

GAO: Yes, of course. You know, China, as a permanent member state of the Security Council of the United Nations and one of the largest economies in the world, definitely has, you know, very large global responsibilities. And I think China has a track record of standing up on principle.

For example, on North Korean nuclear proliferation issue, China has provided the framework for the six-party talks. And despite of North Korea's repeated kind of abrogation of its commitments, China has again and again appealed for calm and reason to prevail.

AMANPOUR: What about China and how it views itself right now? There's obviously a lot of talk with President Obama in China about who's on top. Does China view itself as superior, equal with the United States? How does it view itself?

GAO: Well, we warmly welcome President Obama. Actually, he's staying just a couple of blocks away from this studio. And it is an exciting time to welcome President Obama to China.

Now, after 30 years of economic reform and opening to the outside world, China has already become the third-largest economy. We've made tremendous amount of achievements, not only economically, but also politically, and also in terms of improving our human rights. As I mentioned, we don't have a perfect record, but we want to further improve that.

Now, based on the Chinese perspective, you know, we want to have a multilateral world rather than a unipolar world. And China always wants to operate under the United Nations framework or in international framework.

That's why, you know, China has emphasized a great deal about the importance of stability and peace, because without stability and peace, how can you expect economic growth, how can you expect improving the livelihood of the peoples in different parts of the world? This is what we call the seeking of a harmonious world.

Now, we don't have any agenda to be any enemies of the United States. I think we have all the reasons for the Chinese government, as well as the Chinese people, to be friends with the Americans. Actually, you know, we have great admirations for many things in America, many fans of the Hollywood blockbusters, and people like me, educated in the United States, we have many friends in the United States. We want to be friends. We want to be very, very good friends in the United States.

On the other hand, we know that the United States is faced with a lot of burning issues, but I'm sure, if China and the United States can incentivize each other, can respect each other, build up mutual trust, then China and the United States can work much closer, hand in hand, in dealing with these burning issues in the world.

AMANPOUR: Regarding dissidents...

GAO: Yes.

AMANPOUR: ... previous U.S. administrations, whether it be President Bush or President Clinton, they could count on and they clearly pressed the Chinese to release some dissidents, for instance, ahead of a visit, and the Chinese did that on occasion as a -- as a gesture of goodwill. It was not done this time. Why not? And should President Obama have made that a request?

GAO: No, I think, you know, countries or government officials or even people can become wiser. I think, you know, we need to talk about human rights issues in the United States or in China or in any other countries, but we need to deal with these issues as they are and also be balanced.

For example, if it is only up to the United States to discuss human rights issues in China, this is unbalanced.


The Chinese would say, OK, for the first half-hour, let's talk about Chinese situation. But for the second half of the hour, let's talk about the U.S. situation violations. That will be a more balanced discussion.

But up to now, it is always the case that the U.S. wants to unilaterally impose its views of human rights onto other countries, and the other countries want -- do not want to accept that. And China does not want to do that.

AMANPOUR: Do you think China feels that it has more leverage over the United States now in regards to -- to foreign policy and other issues because of the huge amount of -- of debt, the huge amount of -- of -- of economic linkage, some would say dominance it has?

GAO: Well, from our perspective, the China-U.S. relations is the most important single pair of bilateral relations in the world. And I think China is still a developing country with relatively low per capita income, but for the first time in memory, such a country, China, has become the largest creditor nation to the United States.

And let me make the record straight: Over the past few -- few months since the outbreak of the financial crisis, China has continued to purchase Treasury bonds issued by the U.S. government, rather than reducing any way, and China's foreign reserve is the highest, at about $2.4 trillion U.S. dollars. About two-thirds of that are in assets denominated in U.S. dollars.

So I think our American people and people in other parts of the world need to realize that China has applied a very steady hand and very responsible hand in dealing with this issue involving the dollar. And China will continue to be a supporter, because we -- we have all the intention to continue to purchase the Treasury bonds issued by the United States.

But I also believe that, you know, any country needs to deal with the creditor nation a little bit -- with a little bit of respect rather than being too abrasive to that. That's the minimum thing we can ask for, I believe.

AMANPOUR: Mr. Gao, do you think China will help the United States over Afghanistan? In an op-ed in the New York Times, they say that China has its eyes on some of the world's last untapped deposits of copper, iron, gold, uranium, and precious gems in Afghanistan, and it's willing to take big risks in one of the most violent countries to secure them. So if America defeats Al Qaida and the irreconcilable elements of the Taliban, China's geopolitical position will be enhanced.

What will China do for America there?

GAO: Well, Christiane, I think ever since 9/11, China has become a staunch advocate of anti-terrorism globally, including in the central part of Asia. And I think the deterioration of the situation in Afghanistan and the neighboring Pakistan is definitely not good for China's fundamental national interests, too, because we are also plagued with religious extremism, with splitism, et cetera.

So I think that China will do whatever it can, within its means, to help stabilize the situation in Afghanistan. After all, Afghanistan is a neighbor of China. And also, after all, Pakistan and China are staunch allies. We are having very strategic and political relations with each other, in addition to very robust economic relations.

Therefore, I think China have all the reasons to do whatever it can to see a more stable and a peaceful country is in Afghanistan, as well as in Pakistan.

On the other hand, I think the United States needs to see that, despite of all these failures in Afghanistan, what is the best strategy going forward? You know, how to make sure that other major countries like China can be more meaningfully involved?

So that's why I've emphasized that. Both China and the United States need to give each other due respect and need to incentivize each other. And if China and the United States can see more and more eye to eye on major issues in the world, then China and the United States will become more trusting of each other, more constructive of each other, and then we can work together towards a better peace and better world.

AMANPOUR: Mr. Gao, thank you very much, indeed, for joining us from Beijing.

We will have much more on China's growing power from a U.S. perspective. We'll be right back.




BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We do not seek to impose any system of government on any other nation. But we also don't believe that the principles that we stand for are unique to our nation. These freedoms of expression and worship, of access to information and political participation, we believe are universal rights.


AMANPOUR: President Obama there in Shanghai Monday morning. Is he doing enough to stand up for human rights in China? Joining me now, Washington Post's John Pomfret, who has firsthand experience of China.

Thank you for joining us here in the studio.


AMANPOUR: You just President Obama said, "We do not seek to impose any form of government." Should they be doing more on issues, such as human rights?

POMFRET: Well, human rights community and human rights NGOs definitely believe that, as well as some Chinese human rights lawyers, as well. Wu Xiaoping (ph), a very, very prominent Chinese lawyer, has spoken out, saying that Obama needs to do more to protect human rights in China, and human rights organizations, such as Human Rights -- Human Rights Watch believe the same.

AMANPOUR: And what do you think accounts for China sort of rounding up a whole load of people off the streets, rather than releasing dissidents as an act of goodwill on the eve of President Obama's visit?

POMFRET: Well, traditionally, they used to release people and round them up. This time, they've just round them up.

AMANPOUR: And why? What's the situation?

POMFRET: Well, I think, partially, it has to do with the fact that China feels quite triumphant. Here is a country that, unlike the United States, unlike Western Europe, is not on its back economically. They seem to be emerging from the recession even stronger than ever. They feel that, really, they -- they don't need to pay any obedience to the West anymore, and so there's -- there's that sense of it, as well.

Secondly, I think it also has to do with the strategy that the Obama administration has embraced towards human rights in China, which is speak very softly about these issues, perhaps more vociferously in private, but definitely don't make it a public issue because of the need the Obama administration feels for getting China's cooperation on so many other issues.

AMANPOUR: But will that speaking softly actually get cooperation, for instance, on Iran?

POMFRET: That's a great question. And I -- I don't think we've seen significant cooperation so far, but that is really the -- the great question, whether the Chinese, because we're being soft on human rights, will give us something on Iran or North Korea or climate change or the global financial mess, and I think that's a big issue.

AMANPOUR: You heard Victor Gao talking about a sense of responsibility, that China takes that seriously. But since it's so heavily invested, hundreds of billions of dollars, for instance, getting Iranian oil, many, many more billions in Myanmar and -- and Afghanistan and...

POMFRET: Sudan, Zimbabwe...

AMANPOUR: ... Sudan, all of those places...


AMANPOUR: ... is it incumbent upon it and can the West rely on help in those areas? Or will China just not, because of its business?

POMFRET: Well, this is really a question that gets to the heart of, what is China going to become as it emerges into a global superpower? And I have a feeling that the Chinese really don't know themselves, either. They in many ways are uncomfortable with this new role that they feel has been foisted upon as a superpower, so, for example, when there was talk in Washington about the creation of a G-2 between Beijing and Washington that would solve all the -- the global problems of the world, the Chinese were really quite uncomfortable with that idea.

And their -- their emergence has been sped up by the -- the economic turndown around the world.


They've emerged much stronger than everyone else, like the phoenix rising for the dust, and I think they're uncomfortable with the need to be sort of a responsible stakeholder globally. They'd rather be quiet and just move on and do their thing, but they can't anymore. And I -- and the thing is, I don't think they quite know what they want to do.

AMANPOUR: Well, that's interesting. You say they can't anymore. And Victor Gao said China's uncomfortable demarching other countries, telling them what to do. But let's just take North Korea, border with China, nuclearized. China hosting the six-party talks. But is it more concerned about stability or about a nuclear North Korea?

POMFRET: I think for China, let's say, goal through 1 through 150 is stability. And denuclearization, getting rid of the nuclear bombs, probably is down there on the bottom of the list. It's a goal, but they look at North Korea, it's their neighbor. And if it falls apart, they have 250,000 people easily on their borders wanting food.

AMANPOUR: So what do they think, then, if it gets more aggressively nuclearized?

POMFRET: They will demarche it, but at the same time, they will also do it what Wen Jiabao, the premier of China, did several months ago, actually last month. They will go bring $20 million more dollars of aid.

They are deathly afraid of an unable North Korea, and they're much more afraid of that than a North Korea with the bomb.

AMANPOUR: So with all of this talk about, of course, China owning so much of America's debt, there's been so much, as I said, hand-wringing and who's on top, whose clout counts, the notion that America is the supplicant. Is that real or is that overhyped? Is America the supplicant?

POMFRET: I think that if you look at this -- I mean, the old joke about the banker, if you owe the banker $5,000, the banker -- the banker has a real problem. But if you owe the banker $100 million, then actually you have more power over the bank.

And so, from that perspective, you know, the Chinese have $2-plus trillion dollars in United States dollars. They -- they own $800 billion in Treasuries. So -- and also, the other issue is, they -- they really do need the American market. And so...

AMANPOUR: Precisely, because if the door was slammed, they would collapse.

POMFRET: They would necessarily collapse, but exports are still a very significant part of their growth, so they do very much need the United States, and they need the trading relationship. That said, they have a lot more leverage over us than they used to.

Secondly, China's markets have become increasingly important for American business, so you have Chinese buyers coming to the United States, basically demanding American products change -- change -- change, you know, the way Americans do business in order to -- to serve the Chinese market, so this relationship goes both ways.

AMANPOUR: You were quoted as saying that the relationship between the U.S. and China is schizophrenic. What do you mean?

POMFRET: Well, I think there's sort of a love-hate relationship between the two countries. On the one hand, the Chinese really admire a lot of -- a lot of things about the Americans. They actually admire our freedoms; they admire the way in the past our economic system has worked; they admire -- they admire the self-correcting way the United States system operates. You know, every four years, we can toss the bums out if we need to.

At the same time, they look at themselves now and see them emerging with a one-party state, but nonetheless a very successful one-party state, and start -- and have started to think, well, perhaps our system has superior quality.

AMANPOUR: And what will that mean for other countries in the area, emerging economies, all politically, if they look at a one-party state, nonetheless strong and economically viable, that doesn't really encourage democracy, does it?

POMFRET: No, it doesn't. And you can see other countries in Asia, in Africa, even in Latin America looking at the Chinese model, if you will, of a one-party state and a marketized economy as a potential model for their future. And that's something that is a significant challenge to the idea that a liberal democracy is going to win the way.

AMANPOUR: John Pomfret, thank you so much, indeed, for joining us.

And next, we'll have more on President Obama's visit to Asia. This is what many people are talking about, but something else he did is grabbing our attention. We'll have that when we return.



AMANPOUR: And now our "Post-Script."

President Obama's Asia trip is reverberating around the world for all sorts of reasons, including this one. A deep bow this weekend to the Japanese Emperor Akihito in Tokyo, which followed a deep bow to Saudi King Abdullah this spring.

But since we focused this half-hour on human rights and policy, we thought we'd mention President Obama also called for the release of Burma's pro-democracy leader Aung San Suu Kyi, even if he did mispronounce her name.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There are clear steps that must be taken: the unconditional release of all political prisoners, including Annyong Su -- Su Kyi.


AMANPOUR: Twelve days ago, Suu Kyi met with U.S. Assistant Secretary of State Kurt Campbell in Rangoon. It was the first U.S. official to do so in 14 years. The Obama administration has decided to engage Myanmar's military junta, which jailed her, to see whether diplomacy will succeed where isolation has failed.

President Obama did meet Myanmar's prime minister while in Asia, and so will China, with its extensive oil and mineral interests in Myanmar help secure Aung San Suu Kyi's release.

We'll have more of our interview with Victor Gao on our Web site, and you can go to and join our online discussion on China.

That's our report for now. We'll be back tomorrow. For all of us here, goodbye from New York.