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Special Coverge: After The G-20 Summit, Where Do U.S.-China Relations Stand?

STEVE INSKEEP, HOST:

We are about to listen live to a feed from China. President Obama is about to deliver a news conference there. He has gone to China to a meeting of the G-20, the leaders of the world's largest economies, a regular meeting that takes on special significance because it is President Obama's last and because it is in the world's second-largest economy, China, which shines a light on perhaps the world's most important relationship between the United States and China. They are in Hangzhou, a city outside of Shanghai, which suggests the sheer scale of China. It's a fair guess that most Americans have never even heard of this city. It has a population of roughly 9 million people outside of Shanghai. Now as we await this news conference, we're going to talk here with NPR's Scott Horsley, among others. He's in our studio. Scott, good morning.

SCOTT HORSLEY, BYLINE: Good to be with you, Steve.

INSKEEP: And so what has the president been focusing on the last couple of days?

SCOTT HORSLEY: Well, it's been a busy weekend of diplomacy for this president. As you say, this is - he's there for the G-20, his 10th G-20 meeting. And this is a summit that's focused a lot on the economy, the global economy. But while he's there, he's also having pull-aside meetings with other world leaders and talking today, for example, with President Putin of Russia. He met earlier with Chancellor Merkel of Germany. He has met with Hollande - President Hollande of France. And, of course, he met one-on-one with Xi when he arrived on Saturday.

INSKEEP: And let's bring in another voice to this conversation. Robert Daly is in our studios also. He is director of the Kissinger Institute on China and the United States at the Woodrow Wilson Center for Scholars, which is here in Washington, D.C.. Welcome to the program, sir.

ROBERT DALY: Thank you.

INSKEEP: And let's pick up on this relationship. What are the - what is the state of relations between the United States and China at this moment?

DALY: Well, if we look at the relationship broadly at everything that's going on between the Chinese and American people, universities, corporations, it's fairly strong. Yet strategic and ideological mistrust between the two countries is at an all-time high, and it's concentrated now on the question of what happens in the South China Sea.

RENEE MONTAGNE, HOST:

Which - which, by the way, is worth talking about because it is certainly something I don't think Americans quite understand, although it is quite a serious issue, and that has to do with China intending to dominate an area in the China - the South China Sea.

DALY: Right. China sees this sea as its proper sphere of influence, that China's birthright, its historical destiny is to have at least a zone of deference, to be able to call the shots in the South China Sea, which is of tremendous strategic importance to the United States and many of our allies as well.

MONTAGNE: And it's building islands and a military base.

DALY: Small military facilities in the South China Sea, yes, but not a full base.

INSKEEP: Small military facilities on created land - right? - reclaimed land, as they would say, taking submerged rocks and turning them into islands.

DALY: Land that has been built on - yes - submerged rocks and reefs, which a decision at the Permanent Court of Arbitration in early July said that these features could not cast any territorial seas. And China has taken issue with that, has refused to acknowledge this finding of the court in The Hague.

INSKEEP: Now, we have major issues to discuss here. But sometimes these major tensions get expressed in relatively minor diplomatic squabbles. And there certainly has been one - the controversy of the stairs, the great stair controversy of '16. Scott Horsley, what happened when President Obama arrived in China?

SCOTT HORSLEY: Well, you know, whenever the president travels to China, there's always a little bit of a squabble between the Chinese protocol officials and the White House protocol officials about who's going to stand where, how many reporters are going to be allowed to accompany the president.

The White House always stands up for the U.S. press corps, saying, look, we brought these guys along to see our president in action. The Chinese try to keep a tight lid on things and control on the press. So when the reporters traveling with the president landed in Hangzhou, they were prevented from going to their normal spot under the wing to photograph the sort of ceremonial arrival the...

INSKEEP: I can picture that in my mind's eye,

SCOTT HORSLEY: ...President coming down the stairs.

INSKEEP: ...Coming down the high staircase from the high spot on the 747, sure.

SCOTT HORSLEY: And then in this case, there was no high staircase. The Chinese kept the White House team from bringing in the staircase that lets the president make the grand entrance from the upper deck of the 747. Instead, he had to come out the belly of the airplane.

INSKEEP: Come out the belly of the airplane. There's another stairs.

SCOTT HORSLEY: There's a built-in staircase, but - so the optics were - you know, the optics were interesting.

INSKEEP: Robert Daly, is this just chance?

DALY: This is not chance at all. This is very much part of an emergent Chinese style, some of which they studied from us over the years. But we have seen China, as Xi Jinping steps out and makes more foreign trips, become, frankly, more obnoxious to some of its hosts. We heard Queen Elizabeth very uncharacteristically in May commiserating with the London chief of police, who had dealt with the Chinese advance team and...

INSKEEP: We are not amused.

DALY: We are not amused at. And when the chief of police said, I'm the one who had to deal with the Chinese, the queen was heard saying, oh, bad luck.

INSKEEP: What did they do to the queen or to the chief of police for that matter?

DALY: Well, they insisted on Chinese prerogatives, as Scott has said. When you come to China, you do it our way. And when China comes to London, you do it our way as well. They were quite rude to the U.K. ambassador to China. They actually walked out on her.

INSKEEP: What does this stuff matter?

DALY: It matters because China wants to be seen as a world leader, to be seen as setting standards and especially to be seen as respected. What's going on in Hangzhou with this G-20 meeting, from the Chinese point of view, it's all about presenting Xi Jinping not to the world but to his fellow Chinese as one of the most important leaders in the world. They're not focused on the Obama optics. They're focused on Xi.

This is the single-largest meeting of world leaders that China has ever hosted. And the G-20 is China's opportunity to set international rules or to be seen to the Chinese as setting rules.

INSKEEP: Wait a minute, I want to understand this. Are you saying that the president of China and the Communist Party more broadly that governs China, they don't particularly care what they look like to the rest of the world, they only want to make sure that their domestic constituencies are satisfied?

DALY: The domestic constituencies are far more important, both the ordinary Chinese people who are very active now on the Internet, the Chinese Communist Party and the PLA. This is - G-20 is a performance of power primarily for the Chinese, only secondarily for audiences in America and the rest of the world.

INSKEEP: This leads to a question for you and also a question for Scott Horsley. Bottom-line question, as best you can determine as someone who studies China, how stable is China?

DALY: There have been a growing number of voices that point to fractures within the Chinese political and economic system and who have - which have been predicting that China might either economically have a hard landing or politically be facing a possible dissolution of the authority of the Chinese Communist Party. Certainly American strategists have to assume that the Communist Party remains in power for the foreseeable future.

INSKEEP: That's where I want to bring Scott Horsley back into this conversation. Scott, having covered the White House for years and knowing that President Obama has wanted to turn American attention toward East Asia and toward China for quite some years, what are the assumptions that the administration makes about Chinese leadership, about their interests, about their ability?

SCOTT HORSLEY: Well, they have certainly found that President Xi is a - is much more of a nationalist than his predecessor, and that has affected their calculation. But you're right, a centerpiece of this president - President Obama's foreign policy has been to ramp up the United States' profile in the Asia Pacific. He felt like under George W. Bush that was a region that was neglected while so much attention was focused on Iraq and Afghanistan and the Middle East.

Asia is home to the fastest-growing economies. It's obviously the home to an enormous chunk of the world's population. So economically and strategically, President Obama feels like it is a region where the United States needs to raise its profile, and he has done that diplomatically by attending meetings like the Southeast Asian summit he'll be going to next. That's his next stop on this Asia tour.

It's also the reason for - or a reason for the Trans-Pacific Partnership, the big Asia-Pacific trade deal - that's an economic way for the United States to raise its profile in this fast-growing region. Obviously, it's a deal that has become sort of a political pinata here at home, and the president's facing really long odds in getting that big trade deal ratified in the United States. If he's unable to do that, that would be a big black eye in the Asia-Pacific region. And a lot of folks there will be wondering, what is the U.S. staying power in this region?

INSKEEP: And I guess we have John - Robert Daly - I called you John Daly, congratulations...

DALY: That's my brother...

INSKEEP: ...Golfing - that's great, your brother, John. Robert Daly, how much has it affected this relationship that China has been at the center or near the center of the presidential campaign and that this trade deal with other Asian nations has been near the center of the presidential campaign?

DALY: China is very accustomed to being a political football during the presidential campaigns. They've become fairly sophisticated observers, so they are not terribly put out when Donald Trump in particular attacks China during the campaign. They've seen this with its predecessors.

The TPP is something that China watches much more closely. President Obama has - his favorite line on the TPP is that China wants to make the rules for the 21st century. That is unacceptable. We have to make the rules. It's a political pitch for an economic and trade relationship. China, when it hears that line, hears that China is incapable of making worthwhile rules and that the United States' rebalance to Asia which Scott just described is in fact aimed at containing and surrounding China.

INSKEEP: And I just want to mention we are a few minutes away from a news conference with President Obama. We'll take that live from China today.

MONTAGNE: And it looks like that news conference is ahead of us, like, in 15 or 20 minutes, which is...

INSKEEP: OK...

MONTAGNE: ...Gives us a little more time to talk a little...

INSKEEP: (Laughter) A little more time to thrash things through.

MONTAGNE: ...Later and work this out because I actually have some questions about the TPP and Trump and China's relationship to Trump. But as we said earlier, China is hosting President Obama among the other leaders of the world's 20 leading economists this weekend. China's government sent something like 2 million residents out of the city Hangzhou where this summit is taking place.

This is, to remind people, Obama's final trip to Asia as president. And we're going to hear now from NPR's Anthony Kuhn, who I spoke to earlier in Hangzhou.

So China's hosting the G-20 for the first time. And what is the importance of that?

ANTHONY KUHN, BYLINE: Well, at this summit today, Renee, President Xi Jinping made it clear that from now on the G-20 and not the G-7 group of industrial nations is going to be the main body for global economic governance. And China intends to play a central and active role in that. China's been pushing to get a seat at the table of rule-makers that it is fitting with its status as the world's second-largest economy. It's going to continue to do that, and it's going to emphasize even more the interests of developing nations in general.

There was a metaphor made last night. They took the heads of state on a boat cruise on Hangzhou's scenic West Lake. And the metaphor is that while countries are in the same boat - and China and President Xi Jinping are at its helm.

MONTAGNE: And within that, did China offer prescriptions for the world economy?

KUHN: Well, President Xi Jinping's basic message is that nations need to harness technical innovation and use all available policy tools to pump up economic growth. They need to fight a rising tide of economic protectionism. Now, Xi Jinping himself was very cautious about touting any sort of important development model that China might have to offer the world. But he didn't hesitate to point out that he used to be the governor of this province that we're in now and that it made tremendous progress and advanced very quickly and became wealthy very quickly.

MONTAGNE: And President Xi and Obama did talk for hours, I gather, on Saturday night. How did that go?

KUHN: Well, both sides came out with a long list of issues on which they agreed. Most of these were economic and climate change things. They also issued a list of things on which they did not agree, in particular the South China Sea and human rights. China has been building on islands in the South China Sea, and it's become one of the main issues of contention between China and its neighbors and the U.S.. And there's just no indication that we can see that the leaders here achieved any sort of meeting of minds.

MONTAGNE: And this is, of course, President Obama's last summit. I mean, he's effectively a lame duck. How much is China actually looking to work with him or is it looking over his shoulder to his successor?

KUHN: Well, you know, this summit really takes precedence over everything for the moment for China. And they're not going to do anything to make waves until it's over. Now, when once it is over, people are going to be watching to see if they do things like, for example, continue to build on islands in the South China Sea or continue the trial of human rights lawyers. For the U.S., of course, the timing puts into question to what extent President Obama's policy of pivoting or rebalancing America's forces in focus to Asia will continue. But I think both sides have made it very clear that they really do not want any open military confrontation, and they're both going to work to avoid it.

MONTAGNE: NPR's Anthony Kuhn speaking to us from the G-20 Summit in Hangzhou, China. Thank you very much.

KUHN: You're most welcome, Renee.

MONTAGNE: And he was speaking to us about an hour or so ago because he was stuck actually within the press area and couldn't get out until then and is back again I presume in the press area. Let's - let's touch on what we had been speaking of a little bit earlier, and that is the TPP and this whole question of the United States' relationship to Asia and South Asia, something that China is not, I gather, that thrilled about - that the U.S. is trying to impose its own power in that area. But as we all know, Donald Trump has been basically very negative about the TPP or any of these trade agreements. So how is that playing in China?

DALY: Well, not only Donald Trump but of course Hillary Clinton has also come out strongly...

INSKEEP: Sure.

DALY: ...Against the TPP, having previously been seen in China and the United States as one of its primary architects. Scott mentioned that this is really the economic pillar of the American rebalance to Asia, which then Secretary Clinton played a key role in forming and in announcing. The Chinese have had a mixed view on TPP. Initially, it was seen as purely being aimed at China because it excluded China. It was seen as part of America's effort to...

INSKEEP: Gathering allies against China, sure.

DALY: Gathering allies against China. However, over the past two years or so, we've seen more economists within China that say, actually, if China were to join TPP in the second tranche, China could use TPP accession as it did WTO accession in 2001 as a lever to move economic reforms - domestic economic reforms - forward that China wants to carry out anyway. In the long run, China might want to join the TPP if it comes into force.

INSKEEP: I want to mention a couple of acronyms there. WTO - the World Trade Organization...

DALY: The World Trade Organization.

INSKEEP: ...Giant framework of rules - trade rules around the world. And China signed on to that.

DALY: Which China joined in 2001. And since then, its GDP has increased 600 percent, per capita GDP is up 850 percent. So China has been a beneficiary of some of these rules.

INSKEEP: Haven't you had some personal experience with the Chinese people over the last number of weeks and their views of the presidential campaign?

DALY: I have. In July, during the conventions, actually, I was conducting a national lecture tour in Chinese at the invitation of the American embassy in Beijing to talk about the elections and the American democratic process.

INSKEEP: Nothing much to talk about there.

DALY: Nothing much to talk about. The Chinese are paying close attention but are not terribly impressed. The Chinese press has used the fact that we have two unpopular candidates as an opportunity to say American democracy is failing, in keeping with America's decline. America likes to preach to us about how efficacious democracy is. But look at us, we've got a Xi Jinping, who came up through a meritocracy, tried and true. And America has two candidates that people don't much care for. So the Chinese are watching the elections very closely, but also with a degree of skepticism.

INSKEEP: I just want to mention for people - full disclosure here - we told you we were waiting on a news conference by President Obama in China. We're waiting even longer than we thought. He's going to talk in the next hour, but this has actually been really worthwhile to have a discussion of the United States and China. And so I want to take a couple of more minutes and wrap this up. So you go on this lecture tour, Robert Daly. You're talking with people about the election, and you're talking with them in Chinese. You must get some responses back - questions from the audience, people chatting with you afterward.

DALY: Get a lot of that. We actually did some voting as well, and the Chinese seem to break - and this is purely anecdotal - about 60-40 for Trump...

MONTAGNE: For Trump, I'm not surprised, yeah...

DALY: ...Which is consistent with some of the other polling there.

INSKEEP: Voting like...

MONTAGNE: They...

INSKEEP: ...Everybody hold up your hands?

DALY: I would have people vote...

MONTAGNE: For those who have not heard how popular Donald Trump is in China, what is the appeal?

DALY: I think that there are several kinds of appeal that Trump has there. One is that he's a strongman, and China likes strongmen. Vladimir Putin is also very popular. Xi Jinping is seen as a strongman and a nationalist. Speaking in follow-up conversations with the Chinese, I found too that some support for Trump comes simply from the bread-and-circus side. He's very entertaining. They like to know what he's going to say next. And then the majority of Trump supporters, it turned out upon closer questioning actually think that he'll be bad for the United States in ways that could be good for China. That's a big part of his support.

INSKEEP: This is something that's caught attention here in the United States. You did hear that opinion expressed that people said, I favor Trump because I'm Chinese and it's bad for America?

DALY: That is an interpretation of what they said after further questioning.

(LAUGHTER)

DALY: They think that he will accelerate American decline and isolation. They think that protectionist policies are bad for America and that, yes, that is an opportunity for China.

INSKEEP: Scott Horsley, I'd like to know if you have any sense from the White House officials you cover every day how disappointed, if at all, President Obama is that not only the Republican Party in the form of Donald Trump but the Democratic Party in the form of Hillary Clinton have turned against his signature trade deal and have in different ways been critical of his approach in effect to China and his approach to East Asia more broadly.

SCOTT HORSLEY: I don't think there is great surprise that Hillary Clinton would for political purposes not champion the TPP during this campaign season. After all, Barack Obama spoke very negatively about trade deals like the North American Free Trade Agreement when he was running for president. The president's a sophisticated politician. He understands that especially in a Democratic primary, that's the kind of thing you do. And Hillary Clinton announced her opposition to the TPP during a heated primary battle with Bernie Sanders. And so it was I think generally seen that Bernie Sanders was pulling her in that direction and it was sort of a political feint.

INSKEEP: Except a little hard to go back on that now.

MONTAGNE: Well, but she was careful about it, though, the way she said she was against - she was against certain parts of it, the parts that didn't work for...

SCOTT HORSLEY: She said from what I've seen now, I can't support it in its current form and so forth, which might have left a little bit of wiggle room. More recently, though, you know, her position has really hardened. And I think it would be very difficult for her now to reverse course were she to become president.

And I think that has been maybe a surprise to people at the White House. I think, you know, a certain amount of political expedience they could have understood. But now that she has really kind of locked herself in in a way that Barack Obama did not necessarily do when he was running back in 2007 and 2008 - for example, you know, Barack Obama later turned around and adopted the Korean Free Trade Agreement that had been negotiated by his predecessor, with some changes.

They made some tweaks to it, but he left himself the wiggle room to do that in a way that I think Hillary Clinton maybe has not done, so really now the White House sees their only opportunity to ratify the Transpacific Partnership as that window of time during the lame-duck session after the election and before this Congress goes home. And it's a narrow window. It's going to be a long shot for them to get that done.

INSKEEP: And just a reminder the Trans-Pacific Partnership does not actually include China, as we were mentioning earlier. But it is seen as being all about China. Just about 20 seconds here, Robert Daly. Is it your sense that despite all the fireworks that the U.S. and Chinese governments see some shared interests?

DALY: Oh, they see a number of shared interests. And we saw that in particular with their decision to ratify the Paris climate change agreement. They are working together to combat pandemics. They do have joint interests in trade, which has been beneficial to both countries. Yes, there are shared interests, but there's also a true security dilemma in the South China Sea.

INSKEEP: OK, that's Robert Daly. He is the director of the Kissinger Institute on China and the U.S. at the Woodrow Wilson Center here in Washington. We're also joined by NPR White House correspondent Scott Horsley. And we are awaiting a news conference from Hangzhou, China, which is where President Obama has attended a summit of the world's leading economy leaders. We'll bring you that news conference later on NPR News. Transcript provided by NPR, Copyright NPR.

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