The China Institute in America hosted its 20th summit in New York, where MSCI CEO Harry Fernandez discussed the nature of US-China relations. Fernandez called for managing the competition between the two nations through mutually beneficial cooperation. Drawing on decades of experience, he highlighted the benefits of deep collaboration between the two countries in trade, investment, culture, education, and environmental protection.
Fernandez shared his unique perspective on the evolution of US-China relations, having first visited China in 1979 during the early stages of its economic reforms. He witnessed China's rapid growth and developed a strong connection to the country. Despite experiencing the turmoil in his homeland of Nicaragua, he stressed the importance of understanding differences in political systems and cultures to bridge communication gaps between nations.
In his speech, Fernandez emphasized four key aspects of US-China cooperation. Firstly, trade and investment between the two countries have resulted in a win-win scenario, notably increasing employment in China and boosting purchasing power in the US. Secondly, he argued that economic "decoupling" between the US and China is nearly impossible, differing significantly from the Cold War era's US-Soviet relations. Thirdly, educational and cultural ties have strengthened both nations, with Chinese Americans and international students contributing significantly to US economic growth and innovation. Lastly, he pointed out that major global challenges, like climate change, cannot be resolved without US-China collaboration.
Fernandez cited data to underline the necessity of US-China cooperation. For instance, the purchasing power of the average American household rose by $1,500 due to trade developments between 2002 and 2007. A study from the London School of Economics revealed that although some US jobs were lost due to trade, each lost job corresponded to an overall purchasing power increase of $400,000, benefiting low-income families the most. Fernandez argued that imposing high tariffs on Chinese goods without considering impacts on the US economy would be unrealistic.
Discussing climate change, Fernandez highlighted the urgent need for collaboration between the US and China, the world's two largest carbon emitters. He stated that achieving global emission reduction goals is unlikely without their continued dialogue and cooperation. The countries should seek agreement on climate issues to benefit the entire world.
In conclusion, Fernandez acknowledged that competition between the US and China is inevitable, but there remains significant potential for communication and understanding each other's interests. He summarized, "US-China relations impact not only the well-being of both peoples but also global peace and prosperity."
