[MUSIC] Now let's talk about Sino-US Relations, which in fact is the most important bilateral relationship in the world. And if we start out on the strategic level, so the global military level, the relations are deeply affected by the potential for a power transition as China seeks more influence. While the US wants to prevent China from challenging US dominance. And Xi recognizes what's now called the Thucydides' Trap of power transition. And it's called that because back historically, the rise of Athens frightened the leaders of Sparta, who then started the Peloponnesian War. Both sides were destroyed, but Xi says that war between the United States is just not inevitable and he asserts that China is rising peacefully. And he does that to deny China's rise being a threat to the rest of the world. Now Yan Xuetong, who I'll quote a couple times in the lecture today. From Tsinghua University. He assumes that the US will defend its status as a hegemon against any challenger. And therefore China, automatically by rising, becomes an opponent of the US. But in some ways if you look at the defense spending, the US spends 5% of its GDP on defense. China spends only 2%, and the US outspends Russia, China, UK, and France combined. So the Americans really are spending a lot of money. China's goal in fact with the US is what Xi calls this big power relations of a new kind. Where one side does not challenge the others definition of its core interests. And here, again, we see the idea of core interests. And Xi, in fact, rejected. At one point, an American academic put forward this idea of G2. That rather than the G7, the big seven big states, that there would be a G2, the United States and China. But Xi didn't want to accept that because China doesn't want the global responsibilities that would come with the G2. And they prefer to build a multipolar world, not a bipolar world. Now, if we look at some of the key issues that exist in American views towards China. Here we can see we have a list, this was taken from PEW again. And what do Americans worry about? And you can go through this in detail, but you can see that loss of US jobs, human rights are still a big issue, trade deficit, which I mentioned before, and here, fairly down into the 40% but still, China's growing military power. Now here you can see overall as well. This is a table, a figure that maps, the yellow is favorable views of China in the United States. And the blue line here is unfavorable views. And, as the title of the slide says basically from 2012, which is interesting, the time that takes over, right, or even back here 2011 when China becomes more assertive in its foreign policy. The view in America starts to decline significantly, right? If we look also at inter-ministerial relations, every year there are what are called the Strategic Dialogue between top government officials. And it's just one of 60 dialogues between officials of the two countries. So in this sense, there really is a lot of goodwill within this relationship. Shale energy, cross border drug smuggling, global warming, North Korea, there's a lot of interaction between the United States and China that can be seen in a more positive way. The US military, in fact, prefers to have more engagement with China because it hopes that this increase in transparency will then give them more information. But again, Yan Xuetong calls this a false friendship, which is not deeply rooted and very vulnerable to rapid shifts in domestic politics on both sides. And in fact, we've seen that. Now from the political economy perspective, Chinese investment in US has become very important. it's also, it's purchasing a products from the US, for example, Washington State. It's a big trading partner with China, it sells Boeing aircraft, it sells apples. So China has influence in some particular states. Also there are 11 states that export energy to China and they have strong interest in good US, China relations. And the US exports to China has been a major source of growth for US exports, more than anywhere else. But the Chinese government has made it more difficult for multinational corporations, they've investigated companies for the prices they charge Chinese customers. They've gone into their offices, not easy. On the other side, the US has tried to help China in ways like shale gas extraction, which I talked about. Now, here again, we can see if we look at trade interdependence. And so the argument is that neither side is dependent on the other but that in fact, it's become highly interdependent, right? And so here you can see Sino-US trade as a percentage of China's total trade was at 17% back in 1998. And it's share, sort of the use China has become less dependent on the US and more dependent on other countries. So that's gone down. On the other hand, Sino-US trade as a percentage of US total trade. So if you look at sort of what's the US, and largely its exports, you can see that whereas for the US, China was only 2.7% of its trade. That has gone up dramatically in 2014 to 10.7%. And you can see that these two numbers are pretty close, right? So we've got these trends that are coming together, and therefore, you could really talk about interdependence.
