WA China Watch Digest Special!

Interview: Robert Kapp on WA-China relations, Xi Jinping's Seattle stop, and U.S.-China relations

Robert Kapp being interviewed in Beijing, 2012By Wen Liu   Dec. 11, 2015

Robert Kapp is probably the only China hand to have reached prominence in both this and the other Washington. He once told me that back in the late 1980s, after twenty-some years in the China field since graduate school, he wanted to take a break. And he did, luckily for us, not too long. The fact is that from earning his Ph.D. in Modern Chinese History and then teaching it at the UW to taking on the executive directorship of a “start-up” like the Washington State China Relations Council in 1979 to leading the US-China Business Council in D.C. from 1994-2004 and to recent years back in this Washington speaking, writing and consulting on U.S.-China relations and business, Kapp has been in the China field, often at the forefront, for more than four decades.

WA China Watch Digest is proudly presenting this interview with Dr. Kapp on the state’s relations with China, on Xi Jinping’s Seattle stop, and on the big picture of U.S.-China relations.

WCWD: You did a lot of pioneering work in developing Washington state’s relations with China from 1979 to 1994 as the founding executive director of the Washington State China Relations Council before you went to head the US-China Business Council in D.C. Looking back, especially with President Xi Jinping’s visit here this year, did you expect, and are you happy with, the good relations our state enjoys with China today?

Dr. Kapp: Washington State's overall relations with China today are good, and the long history of the Washington State China Relations Council may be given a little credit for that, but really only a little. If US-China relations overall had not proceeded, despite ups and downs, toward the vast engagement that they embrace today; if Sino-American economic and commercial relations overall had not advanced to the point they have reached today ($600 billion in two-way merchandise trade, etc. etc.), Washington State's engagement with the PRC would not have been able to expand in the very positive ways that it has. On the other hand, Washington State's rather peculiar economic structure, so different from that of most other American states, made the growth of ties with the PRC particularly appropriate. On the export side, obviously, Boeing was "in it from the very beginning." But the familiar combination of ports, manufacturers, universities, and more recently innovative businesses in the digital sector all made for strong and steady expansion of the state's engagements with China. What the China Relations Council added, at least in the "early days" when there was little to build on, was an element of state-level "commercial and cultural diplomacy" that helped to raise recognition of our state in the PRC and helped Washington State public leaders to lend their own efforts to building stronger ties. That was, and remains, a useful role, even as times have changed and the massive interaction of Washingtonians and PRC counterparts has proceeded far, far beyond the confines of the WSCRC's own ambitions.

WCWD: As I asked recently a number of our China hands and watchers this question, I would like to also ask you: Do you agree with this Seattle Times headline in September just before Xi Jinping’s arrival in Seattle, “Once again a Chinese leader uses Seattle as counterpoint to D.C.," and why?

Dr. Kapp: The Chinese government plans the U.S. itineraries of its visiting senior leaders with excruciating care. I can't recite all the factors that went into the choice of Seattle for President Xi's initial U.S. West Coast stop; presumably the very fact of a West Coast stop was influenced, in part, by the reality that the Pope was about to be in D.C. and the two high-level visits needed to be kept from tripping on each other. But I was neither party to China's decision making nor to the proposal that Washington State's host committee made to China.

We all know, and the local media in and around Seattle have long emphasized it, that with respect to China Washington State tends to bear a reputation for political moderation, cultural openness, consciousness of the vital importance of the Asia-Pacific region as a whole, and respectful good will toward the PRC. Each visit by a senior Chinese political leader to Seattle and Washington State further enhances that recognition within China. While the phrase gets a little tired if you have heard it for thirty or forty years (as some of us have), the notion of "the other Washington" has a certain appeal, especially when national governance, especially in the Congress, is so patently dysfunctional and when the range of critical (sometimes hysterical) opinions about China in Washington, D.C. is so very wide. We can assume that every Washington State host of a senior Chinese leader in years to come will make the same point about our state's differences from the unsavory aspects of D.C. politics. But, I add with a laugh, we can also expect to meet many, many friends from China in the future who still don't know the difference between the two Washingtons!

WCWD: In your days and the days before 2001 when China joined the WTO, the Washington State China Relations Council had to lobby the Congress for the annual renewal of the Most Favored Nation trade status for China. Last year, Washington became the largest exporter to China among states, at over $20 billion, ahead of even California and Texas. What does this achievement mean for Washington and for those like yourself who worked for so many years to promote trade with China?

Dr. Kapp: The struggle over "Permanent Normal Trade Relations" (PNTR, formerly known as Permanent MFN) treatment for Chinese goods entering the United States once China joined the WTO was a huge political battle in 1999 and 2000, in which I had a modest but active role as head of the US-China Business Council in D.C. Passage of PNTR assured that the United States would be able to avail itself of the many market-opening commitments and other trade concessions that China had agreed to, in negotiations with the U.S., as conditions of its admission to the WTO; how ironic it would have been if the U.S. had rejected PNTR, thus disqualifying itself under WTO rules from enjoying the fruits of its own decade-long negotiation efforts!

Many in China worried that entry into the WTO would throttle China's own economic development, because China would not be able to compete with advanced industrial nations like the US, Japan and the major EU economies. Advocates of WTO membership in China saw WTO rules and requirements as vital external tools necessary to force China to adopt needed but bitterly resisted economic reforms at home.

The story of China's rise to global economic strength since its WTO accession (although the big drive in that direction had begun in the early 1990s), need not be told here. I believe that the struggle for PNTR was a struggle worth waging, and that, overall, China's increased global economic role has been a positive development, not only for China, but for the U.S. and, in general for the world at large.

Nevertheless, time does not stand still. As China has gained economic strength -- and has increased its military strength and its ability to affect the course of world affairs -- the world has, by definition, changed. While we can surely celebrate the significance, for China and the world, of its historic integration into the global trading system as it entered the WTO at the end of 2001, and while we can surely be happy in our local roles as Washington State citizens that China's growing economic engagement with the U.S. has been reflected in expanded business ties between our state and the PRC, we should be mindful that we are no longer living in 2001, and that new challenges and opportunities arise constantly between the U.S. and China.

WCWD: Robert A. Kapp & AssociatesA big shift in U.S.-China trade is that China used to try very hard to attract U.S. investment into China, and now it’s the other way round. Washington state is behind a number of other states in this area. So in January this year, Trade Development Alliance of Greater Seattle along with a number of state agencies and business organizations released a Greater Seattle Region Global Trade and Investment Plan to increase foreign, especially Chinese, investment, in the state. The plan included creating an entity called ChinaSeattle, maybe after ChinaSF, with a state office in China. Do you think this is what Washington needs to do in the new phase of China trade today?

Dr. Kapp: I am sorry to say that I really don't have an opinion on that because I'm not well enough informed about it. Clearly, Washington State has not been a target of massive Chinese investments (though the real estate markets might differ with me on that). My sense is that, while some Chinese investors are just looking for a place to park their money in the U.S. for purposes of protection against the possibility of bad economic or political developments in China or for the purpose of creating a family "base" in the U.S., serious corporate investors go about their planning with great care. Where they invest depends less on expressions of friendliness than on dollars and cents considerations. The profile of Chinese investments in the U.S. continues to evolve, as we can see in the quarterly reports from Rhodium Group, for example, but the basic realities remain. Washington State is not in and of itself a gigantic American market, for example. We will have to see how Washington State measures up, in coming years, on the M&A front. The strengths we have are known to all, very much including the intellectual strengths of fine research universities and an already very large advanced technology/digital sector. Washington State has much to offer, but it doesn't have everything to offer. To the extent that our state wants to increase PRC investment here, it will be a matter of continually refining and reiterating what we believe are our strongest assets, and making as sure as possible that our messages are heard by the right people across the Pacific. But on the specifics of what our state agencies and businesses have proposed, with a view toward increasing PRC investment in the state, I defer to others with greater knowledge.

WCWD: Washingtonians may be all excited about their good relations with China, the same optimism is not shared, however, by some of the nationally prominent China specialists, those you know very well, on U.S.-China relations as a whole. There was David Shambaugh’s “The Coming Chinese Crackup” about Xi Jinping’s ruthless crackdown on dissent, David Lampton’s “A Tipping Point in U.S.-China Relations is Upon Us” about how respective fears nearer outweighing hopes than at any time since normalization, Orville Schell’s “Be Nice and Share” about the persisting suspicion and mistrust between U.S. and China, and James Mann’s “Americas’ painfully outdated approach to China” about how trade and prosperity have not produced a more open China as Americans had believed since Nixon, and so on and so forth. Where are you on this, especially if Xi Jinping’s visit has changed anything?

Dr. Kapp: This is very complex topic which cannot easily be summarized here. Especially at a moment when America's own politics seem so ludicrously dysfunctional, a discussion of how American policy toward China will develop in the near- to mid-term is difficult to define. Of the scholar/think tankers you mention in your question, I would single out David M. Lampton's "Tipping Point" speech to The Carter Center, partly because, as Senior Advisor to The Carter Center China Program, it was I who invited my friend Mike Lampton to come to Atlanta to make that presentation; partly because his remarks were extremely widely noted in China (where Lampton is regarded as -- how shall I put it -- China's "favorite" American public intellectual; but especially because of what he said.) But I would also add another very recent article by another member of the now-senior generation of American specialists on China, Professor Harry Harding. Harding has just published an article called "Has U.S. China Policy Failed?" in The Washington Quarterly. In it, he surveys the broad landscape of American analysts' views on the future of U.S.-China relations, in a very informative way.

It is important to realize that, with U.S.-China relations now spread over practically the entire map of American governmental, political, economic, and even social life, the variety of American perspectives on China and our future relations with China is enormous. Simply collating the views of China specialists in American think tanks or universities; simply toting up the results of the latest US-China Business Council or American Chamber of Commerce in China surveys of their corporate members on the Chinese business environment; simply reading even the best of the vast outpouring of books on China by American writers; and simply -- Heaven forbid -- reading the continuing stream of China-related messages from Capitol Hill (most of them very, very negative or shrill) none of these provides grounds for a definitive view on the future of US-China relations.

For one thing, the people who talk least -- i.e., those inside the U.S. government (in all its different civilian and military dimensions, from the White House down) -- often are conducting businesslike, intense, and sometimes very productive relations with their Chinese counterparts. The ongoing cooperative relationships between U.S. and Chinese government bodies in many (not all) fields needs to be recognized as an indication of the relative stability of many dimensions of bilateral relations. Similarly, Americans and Chinese work normally together in a variety of plurilateral and multilateral environments. In spite of frequent trade frictions at the WTO, in fact the U.S. and China, along with everybody else, play solid system-supporting roles there. And so on.

Finally -- and I think this is most important -- in spite of the pathetic comedy of American presidential politics (something that understandably plays badly throughout most of the world), and in spite of America's internal crises that at times seem irremediably to rend the American social fabric, ultimately the future of China's relations with the United States lies in China's own hands. Of course we are all familiar with the tit-for-tat quality of Sino-American relations at times, and many of us are familiar with the concept of a "security dilemma," according to which each side takes the other's actions in defense of the other's security as a threat to its own security and counter-reacts with measures of its own. It will never be crystal clear who is responsible for a deterioration of this relationship because the two sides are so closely locked into their perilous embrace.

But in the end, China's trajectory is China's to decide. That means very basic things: it means a determination of China's own sense of its appropriate global role, now and in the future. It means China's own search for an enduring domestic social, ethical, moral and political consensus. It means China's solution, or failure to solve, a vast range of domestic problems ranging from lethal air pollution to vast demographic challenges, and it means much more. If, for example, China insists, as its current political leadership continues to do, that China's future stability and prosperity are continually threatened by "Western values," which is an unsubtle reference to the United States, and if such an insistence finds acceptance and embrace among the people of China, nothing that the U.S. can do will remove that obstacle to continued improvement of U.S.-China relations. The United States, seventy years ago, assumed that it could play a major role in determining the course of China's political development, just as, in later years, the U.S. assumed that it could determine the fate of a host of other nations. History has taught the American people a bitter lesson in that regard, a lesson that is still very much in dispute as our politicians attempt to grapple with today's international challenges. But we did learn, and we must remember, that with respect to China, ultimately it's up to China to make its own future, including its relations with America. We need to know where our bottom lines are (not an easy task) with respect to China, but we need to start with the fundamental assumption that what China decides about its future, and about its essential identity in the 21st century world, will be as significant a determinant of our long-term relations with the PRC as just about anything we in the U.S. could or should do. I must say in closing, though, that the rise of any genuine demagogue to a position of the highest political power in the United States could bring with it the refutation of what I have tried to say here.

(For more information about Dr. Kapp, go to WA China Hands. For more information on major events in Washington state-China relations, go to WA China Chronicle.)