The Evolving U.S.-China Relationship: A Conversation with Ambassador Nicholas Burns

U.S. Ambassador to China Nicholas Burns discusses the evolving U.S.-China relationship and the strategic opportunities and challenges it presents for both countries and the world.

The C.V. Starr & Co. Annual Lecture on China was established in 2018 to honor the trailblazing career of C.V. Starr and the Chairman and Chief Executive Officer of C.V. Starr & Co., Maurice R. Greenberg.

LORD: Well, greetings to all of you here in the room and over six hundred people across the nation on Zoom meeting to discuss the most consequential bilateral relationship in the world with one of the most consequential American diplomats promoting it and implementing it.

I think you’ve got the ground rules straight. Nick and I will converse for about half an hour. Then we’ll turn to questions both from you and from the vast Zoom audience.

I could sum up the introduction by just saying, as I say behind his back, Nick is one of the most outstanding diplomats of his generation. But I want to flesh that out because let’s think of the credentials we need for ambassador to China at this moment in our trajectory.

Do you want someone with the sweep of relations, how they all fit together including Asia and China across the world, or you pick an undersecretary for political affairs, the highest Foreign Service post you can have?

What about NATO and working with our alliances as we deal with China? Well, let’s have an ambassador to NATO. Well, Europe, the mood—what do they think of China? How do we work with them? Let’s get the ambassador from Greece. Oh, you’re worried about Ukraine and how we deal with the Russians and Sino-Soviet axis? Let’s deal with a senior NSC person for Russia and the Soviet Union.

Do you want someone who even has knowledge of the Middle East? Let’s get someone who served there and has run private programs bringing Palestinians and Israelis together. Do you want someone who can articulate in public American foreign policy and America-China policy? Let’s have the press spokesman for the State Department.

So my point is—(laughter)—

BURNS: In the past.

LORD: —I challenge you to find someone better qualified because we have to deal with China in a global context. It cannot just be the bilateral axis. They’re too big, they’re too important, and therefore with this kind of perspective. And I’m leaving out the vast experience as a scholar at Harvard, many boards, committees, think tanks, where he has enriched his perspective and the national dialogue.

Finally, there’s a personal note here. There’s a few personal echoes. We both served together in the Clinton administration when I was assistant secretary and he was press spokesman so we had fun spinning how every meeting went beautifully. (Laughter.)

We both, of course, have served as ambassadors in the U.S. and we both have very strong spouses, in his case Libby, my case Betty, and we consider them—Libby and Betty—co-ambassadors, I think it’s fair to say, in that post.

BURNS: Absolutely. You bet.

LORD: We’ve both authored books on a man named Henry Kissinger and we’re both Red Sox fans. Now, in my case it’s number two to the Mets but still I’d root for them in the American League. (Laughter.)

So on this personal note let me ask as our first question. Let’s get into it on both a personal and substantive basis. When you arrived there in the spring of 2022 you had the most difficult possible environment. Relations were at their nadir in the last fifty or sixty years. Repression, restrictions on travel and on contacts, COVID pandemic restrictions.

So it must have been a nightmare when you arrived. It would seem from afar that it’s a little bit better today. Give me a sense of your personal experience and professional experience when you arrived and the first month, two months, really, a year, and how it’s been the last couple of months.

BURNS: Winston, thank you, and good afternoon, everybody. It’s nice to see so many friends in this audience.

I’ve actually not been back to the Council in four years. I’ve been a member since 1994. I served on the board for five years. But I’ve been otherwise engaged in China and it’s great to be back and it’s great to be back with someone I have great admiration for.

I learned a lot flying around with Secretary Christopher and Secretary Albright with Win Lord and former president of this Council as well as a former ambassador to China. So it’s really a pleasure to be with you, Win, and thank you for that softball question. (Laughter.)

LORD: They’ll be all softballs, I promise you.

BURNS: So, yeah, I think you’re right to ask about 2022 because in a way it was an extremely difficult year in our relationship with China. I defended and our administration defended Speaker Pelosi’s right to visit Taiwan in August of 2022. We felt it was important that we defend her right as the co-equal head of the U.S. government—of a branch of the U.S. government to be there.

But that really sent—the aftermath sent the relationship into a tailspin. We thought we had righted the ship at the Bali summit a year ago November and then we had the balloon incident in February of this year, and as of the spring of this year we really had very few contacts of a senior level nature between the United States and China.

And this is the most consequential relationship in the world—the two strongest military powers, the two strongest economies, the two countries with the greatest global reach not talking to each other strategically or tactically and we thought that was very ill advised.

And so we decided, along with the Chinese but, really, the Americans pressed this that we had to recreate these deep Cabinet channels that we have now recreated over the last seven months. Secretary Blinken came out in June, Secretary Yellen in July, John Kerry in July.

I met one-hundred-year-old Henry Kissinger at the airport. It was about 102 degrees on a mid-July afternoon. He came and spent five extraordinary days in China. He spent five hours with Xi Jinping and his wife. He had a half day debate on AI with Chinese researchers. He spent three hours at the American embassy where we honored him for his extraordinary service to our country and for his co-founding with President Nixon and you of the modern relationship.

So I thought we were able over the summer—over midsummer to reengage with them. Then we had Gina Raimondo came out and that was important because our commerce secretary now sits at the center of the national security table. She’s the chief export promotion officer of the government but she’s also the chief enforcer of our sanctions regime, and she’s our chief technology enforcer.

And then we had the first congressional delegation in four and a half years. That was Chuck Schumer—a bipartisan delegation—and he made a big impact, Senator Schumer I think in the meeting with Xi Jinping. I participated in that meeting talking about fentanyl, talking about the war in Gaza had just started—Hamas’ attack on the state of Israel.

It’s been quite a year, and that led up to the summit meeting that we just had a month ago between President Biden and President Xi in San Francisco. We’re not at a state of good relations. I think what we’ve been able to do is reconnect the two governments. We agreed—the two leaders agreed at San Francisco on four major developments.

Number one, China is going to help us on the fentanyl crisis. A lot of the precursor chemicals, the great majority that make up the synthetic opioid, were being sent from black market firms in China to the drug cartels in Mexico and China’s now taking action against them and we’re going to test the proposition they’ll continue that.

Second, we agreed to recommence military-to-military contacts at all levels. This is vitally important because our two militaries, particularly our navies and air forces, are working in very close proximity in the South and East China Sea and the Taiwan Strait, and you don’t want a situation in the event of a mistake or an accident where the two militaries can’t intervene at a senior level to defuse the situation and separate whoever has collided.

And so we now have an agreement from the secretary of defense and the chairman of the Joint Chiefs down to really more junior people we’re going to reconnect on the military-to-military side. The two presidents agreed to begin a conversation on AI which, of course, is so important for great power and military stability and nuclear stability in the world.

And fourth, Win, something you’ll identify with as a former ambassador, we’ve got to keep our people connected and the pandemic pulled our people apart. We went from fifteen thousand American students in China just several years ago to seven hundred now. Very few American tourists in China. Very few Chinese tourists in the United States. Very few business travelers.

My entire first year as ambassador zero visitors from Congress, from the Cabinet, from CEOs, from former ambassadors, and so now we’ve been able to reconnect the two governments and that’s a fundamental kind of regrounding of the relationship.

Having said all that—and I’ll conclude on this—we haven’t resolved our major differences. It’s still—on many issues. It’s still a highly competitive, difficult, contested relationship. We have fundamental differences in how we see Taiwan, fundamental differences in what China is doing in the South and East China Sea to override the judgment of the International Court of Justice, which was so clear in July 2016 in favor, for instance, of the Philippines and you saw over the last weekend a tendentious, aggressive, and quite objectionable Chinese action against the Philippines at Second Thomas Shoal.

It doesn’t—we haven’t resolved the major disagreement we have over the war in Ukraine, the nature of the war, and the problem caused—just a huge problem caused by President Putin in his illegal barbaric attack on Ukraine and we have not overcome our differences on Gaza and on the failure of the Chinese regime to criticize Hamas or even to show sympathy for the thousands of Israelis killed.

So what I mean to do here is to say we’ve taken a step forward to stabilize a relationship. We’re satisfied about that. We’re now going to test whether we can cooperate. But a lot of the differences that separate us, they remain. This is a very difficult but very important relationship.

LORD: Well, let’s pursue that. In sum, do you think the APEC meeting and these other meetings leading up to it are the beginning of continual incremental progress? I think anyone will recognize you can’t make breakthroughs in some of these tough issues, but incremental progress and stabilization? Or was it a brief respite for 2024 when you have the Taiwan elections where it’s apt to be the DPP pro-independence party elected? You have the U.S. election with China bashing in every presidential election and nobody including Biden can afford to look soft.

So are we going to head into some more turbulent waters sooner or later, or do you think we’re on a pretty good glide path at this point?

BURNS: I’d be cautious and I’d say that it remains to be seen. I mean, we’re pleased with the outcome of San Francisco because, frankly, I thought the relationship—many of us did—was too unstable in the spring of this year without any contact.

We’ve reestablished the contact, and those four agreements that I mentioned are very important and we want to implement them and I think it’s in testing whether they can be fully implemented particularly the fentanyl decision, which is so important to everybody—to every state, every county, every town in the United States—as our number-one public health crisis.

Let’s see if we can fully implement these and then let’s see if we can make some progress, at least incremental progress, as you say, Win, on some of the larger issues that have been the source of disagreement and been so contested in our relationship.

I should say that we’re also of the opinion that we’ve got to have stability in the relationship because obviously we want to drive down the probability of conflict between the two countries. A conflict is unthinkable. We don’t want to live in a world where we’re back at loggerheads on all these issues.

So there was progress at San Francisco. No question that one of our greatest advantages in the relationship is that President Biden and President Xi have known each other for thirteen years, and while they have disagreed on a lot of issues they have respect for each other. They can adjudicate some of these issues in a way that’s, I think, effective and I’ve seen that both at the Bali meeting and the San Francisco meeting.

So we don’t rest on our laurels. I think 2024 is going to be a year we try to implement what we’ve already agreed on, see if we can make progress on some of the larger issues and some of the systemic issues that have always separated us from the People’s Republic of China including your time, which was a very different time, Win. In the 1980s—

LORD: I was very lucky compared to you.

BURNS: Human rights. Sunday was Human Rights Day and our secretary of state issued a very strong statement about our beliefs in human freedom. I issued a statement as the ambassador condemning what the Chinese have done in Xinjiang, in Tibet, Hong Kong, the lack of religious freedom, and it’s very important that we remind the Chinese public and the government of China of our abiding faith in our values because that essentially is the greatest difference between the regime—the government in Beijing—and our country and our Constitution and the Bill of Rights.

LORD: Now, given this context give us a sense of the mood and perspective in Beijing, both Xi himself and the Chinese elites and people. I mean, Xi has had the economy slowing down. We can get to that later. I’m not going to go into too many concrete issues. I think the audience will probably want to get into it. I’m trying to get some of these generic questions.

But the economy is slowing down. COVID was mishandled. His defense and foreign ministers and two nuclear expert generals have disappeared. So is—and many travelers to China recently that I’ve talked to and heard about think the mood particularly among the young people—their laying down, they’re not as ambitious, they’re not quite as enthusiastic, people are sour. But on the other hand you get the sense of a still fierce pride and nationalism and that China is rising and U.S. declining.

So Xi—look at his situation where he’s had these recent problems—still feels secure or does he feel insecure? Is he cracking down because he’s insecure? And how does he think about the U.S. and the West? Does he really think we’re declining or does he recognize our power and he’s biding his time for a future challenge in a couple of decades?

BURNS: So that’s a very good question and if I were here as a professor at Harvard as I was for a long time I would give you a straight answer. (Laughter.)

LORD: Well, you were—

BURNS: As an ambassador to the People’s—

LORD: No, he was complaining about softball questions, right? So therefore I’m going to get away from that.

BURNS: So as the ambassador to the People’s Republic of China I’m happy to talk about how our relationship is going. I’ll leave to others to analyze problems within China except to say this. I think it’s clear that, you know, one of the issues at the center of the relationship is our—is what we’re doing in trade and investment.

We have a 600—and this partially answers your very good question—we have a $690 billion two-way trade relationship. China is our third largest trade partner after Mexico and Canada, our two free trade North American neighbors, and we have a lot riding on that relationship.

There are seventy-five thousand American jobs dependent on our exports to China. Take agriculture. One-fifth of all American agricultural exports go to one country, China—$40.9 billion in sales last year for soybean farmers in the Midwest, for ranchers in the Western states, for the seafood industry in Massachusetts and the Northwest.

So we have a lot riding on that relationship. We have been very clear over the last seven or eight months that we do not believe in decoupling the two economies. Janet Yellen said that in a speech in March, the president said it last month in San Francisco, and we want to see American companies succeed in China.

We’ve also said that we do have to de-risk, and this is a term that Ursula von der Leyen, the president of the European Commission, coined and we do think, I think, alike with the EU and Japan.

One of the lessons of the pandemic is that we don’t want to be unduly reliant on supply chains, say, for critical materials and critical supplies from a country like China. I mean, I think all of us learned that during the pandemic, and because of the civil-military fusion in China meaning the government of China can ask any Chinese companies to turn over any technology to the PLA or to the intelligence services of China, we have decided, as you know, as of fourteen months ago to prohibit the sale of advanced American semiconductors into China because we don’t want to give an advantage to the PLA in its open competition with the United States for military technology advantage in the next decade.

The president also issued an executive order in August which also prohibits a certain number of investments that American companies could make in the artificial intelligence sector. So we are happy to trade with China when it’s in the national interest of the United States.

There is this what we call small yard high fence, a narrow band of dual-use technologies where we’re going to shut that off for national security reasons, and I have to tell you when Secretary Gina Raimondo came out to China in late August—and she’s tremendously effective at what she does—she told the Chinese we’re happy to trade in a whole host of areas from agriculture to consumer products to health care.

But she said these technology restrictions are nonnegotiable and we will not compromise on them, and that’s the message I’ve also passed very recently to the Chinese leadership. So I think the economic issues have come to the fore. They’re at the center of the relationship and I’d say what’s changed probably in the relationship remarkably over the last ten years is the degree to which technology is now the contested area between the countries—the two countries.

If you think of where things are headed with AI, with machine learning, with biotechnology, with quantum mathematics, any field that could derive a military advantage obviously is going to be an area we want to cut off normal communication.

Why do I say that? Because we’re convinced that the Chinese do have ambitions to become the strongest military power in the Indo-Pacific and, of course, we are there. We’re there with our alliances with Japan and South Korea and Thailand and the Philippines and Australia, and the AUKUS arrangement that President Biden has led on combining Australia, Britain, and the United States, and very importantly the Quad—Japan, Australia, the United States, and India—trying to cooperate strategically in order to keep the region peaceful and keep the sea lanes open to commercial traffic and military traffic because that’s international law and that’s how the international system governs.

I’ll give you one example of this. Fifty percent of the container traffic in the world flows through the Taiwan Strait every day. So not only is our message to the Chinese you need to commit to a peaceful resolution of that dispute, and that’s a very important message leading up to the Taiwan elections on January 13, for the rest of the world our message has been, particularly countries in the Global South, consider the ramifications to the global economy if the Taiwan Strait were ever closed because of conflict.

We stand for a peaceful resolution of a dispute and the status quo that you and I have worked on and our predecessors going back to 1954, the arrangements that have kept the peace in the Taiwan Strait.

And so these are important messages that we’re sending through our actions to maintain an American presence in the region.

LORD: Well, you’ve touched on the three elements of the Biden policy toward China, which I personally think is a very sound framework. First, invest; namely, get our act together at home while protecting at home our—

BURNS: At home. Rebuild our infrastructure.

LORD: De-risking or decoupling, but getting our act together whether it’s infrastructure or climate change and so on.

Secondly, align, and you mentioned our alliances, and I do think whether its handling of NATO in Ukraine or the Indo-China—Indo-Pacific framework have been quite effective. And then, of course, is the competing he’s talking about.

But you mentioned Taiwan so you forced me to ask a question on that. Does China think that time is on their side with respect to Taiwan or not both in terms of military balance, in terms of growing Taiwan identity in Taiwan, the polls showing they don’t want to get close to the mainland politically. They want the status quo. The nefarious example of Hong Kong and the snuffing out of that country’s liberties.

How can they think that time is on their side? Maybe they don’t.

BURNS: You know, listen, what we can do is to insist that the people of Taiwan have an opportunity to vote freely on January 13. Of course, you’ll remember that the Taiwan Relations Act passed January 1979, forty-five years ago next month. That insists that the United States continue to help Taiwan with its defensive capabilities, which we are doing in this administration.

It also calls, as you remember, Win, for the United States to retain sufficient military power and presence in the region to guarantee the peace and we’ve done that faithfully in this administration.

So what I can do is tell you what we’re doing and the messaging. I had two meetings last week with senior officials of the government where we reminded them of the need to proceed carefully and proceed peacefully and the rest of the world ought to join us in telling the Chinese that a peaceful resolution of this very difficult, long-standing dispute is absolutely essential for the—for global peace but also for the global—our global economy.

LORD: Yeah. My view, and I wonder if you share it, is that the chances of an invasion are extremely low if nonexistent for a lot of reasons we don’t have to go into at this point, that a more concerning thing would be some move across an offshore island or a semi blockade. But the debate about a possible invasion misses the point. It’s other gray areas and the long-term deterrence that we have to pay attention.

BURNS: Yeah. I learned one key lesson when I was State Department spokesperson. Never answer a hypothetical question. (Laughter.) So I detected some hypothetical questions in that very good statement you just made.

LORD: I’m not asking you what the U.S. response would be. I’m asking only whether you think an invasion is likely, or is that the wrong concern?

BURNS: You know, I think what we can control is our ability to implement the Taiwan Relations Act. I just talked about two aspects of it and that’s important. We can also try to make sure that other countries of the region—think Japan, think the Philippines—who have a direct interest in this—South Korea, the Republic of Korea—are also acting and speaking out for a peaceful resolution of the dispute and that’s what we insist on. That’s what we call for.

LORD: OK. Before we turn to the audience here and across the nation I have one last question to take advantage of your extreme geopolitical knowledge and experience.

You have the Sino-Soviet axis, and you may want to throw in North Korea and Iran, as we deal with these various glaring issues and also the Global South in general. But do you think the Sino-Soviet, perhaps aided by the others, connection is a significant but transitory tactical headache that we have to deal with in the coming years or is it gaining permanent momentum so that we now have a permanent strategic problem dealing with this axis?

BURNS: I think, honestly, it remains to be seen. The Russia-China relationship is quite strong at the present time. We, as you know, led by our secretary of state way back in February have warned the Chinese not to provide lethal military assistance to the Russians for the war in Ukraine. We don’t believe they’ve done that but we watch it very carefully. We’re disappointed.

LORD: Not third parties or parts of dual-use technology, slipping it in and helping—

BURNS: You know what? I choose my words carefully. We don’t believe that the Chinese state has provided lethal military assistance, but we watch that very carefully. We have sanctioned, as you know, over the last couple of months Chinese companies that have deviated from that and companies of other countries. So that’s one thing.

We are disappointed in the political support that the Chinese have given the Russians for the war in Ukraine. The Chinese say that they’re neutral. But I live in Beijing. I read the People’s Daily every day, and what they’re telling their own people is that the United States and NATO are responsible for the war, which is an outright fiction, as you know. Not true.

We also hope that the Chinese would be more even handed in the war between Israel and Hamas. I was with Senator Schumer in his meeting with Xi Jinping and he and I gave a—and the other senators gave a press conference afterwards. This is all out in public. But Senator Schumer was very effective in saying that China ought to give—ought to show some sympathy to the civilians—to the families of those civilians killed, those Israelis killed on October 7 and afterwards. We haven’t seen much of that.

So we have a number of differences with the Chinese of how they’re comporting themselves. They do have a closer relationship with Iran. On North Korea we believe the North Koreans have violated U.N. Security Council resolutions that prohibit all sorts of things they’ve been doing including testing ballistic missiles.

So these are important differences. Are those four countries now aligned? Not in the way that we are aligned and I think this is the last point I’d make, Win, on this. We have the advantage of long-standing military alliances—Japan and the Philippines and the Republic of Korea—for over seventy years, Australia going back even further to just after the Second World War, and to see the strengthening of these alliances I think has been one of the biggest strategic shifts and most welcome from our perspective in the last couple of years.

You know, there were some in China—even when I was being confirmed two years ago this month the word in China was the East is rising and the West is falling. Well, look at our economy. Look at our technological strengths. Look at the strengths of our big research universities and look at the strengthening of the U.S.-Japan alliance, which is our rock solid keystone alliance in East Asia, and the newfound or the return of a very strong alliance with the Philippines just this year in 2023, the rapprochement, the coming together of the Republic of Korea and Japan—historic—at Camp David.

And, of course, what the president has done with the creation of AUKUS we have significantly strengthened our power base in East Asia and that’s very important to keep the peace with China but also to make sure that the democratic countries can be in a position that the rule of law is respected, that in places like the Senkaku Islands or the Spratlys and Paracels in the Taiwan Straits China has to play by the rules of international law, which is not always the case. But that’s the expectation.

LORD: Well, our talk so far has underlined my initial theme, namely coaching China in a global context and how well suited you are for that task.

Let’s go to questions now. We’ll start here in the audience. Come back down here, yes.

Please, this is on the record. Briefly state your name and affiliation and ask a question that is notable for its brevity. (Laughter.)

Q: It’s Pamela Falk from CBS News and more importantly many years ago an intern at Foreign Affairs when you were president.

My question is a broad one. Is there any way—you both have been involved in establishing the current relationship and in moving things forward with China. Is there any way to actually have a good relationship or is it endemic that there’s competition?

Thank you.

BURNS: I’d say this, Pamela. Competition is here to stay.

I think we’re going to see—it’s just part of a systemic rivalry both economically and strategically and we have to assume that and we do assume that and the competition is going to play out in the military realm, in technology, in trade and investment, and certainly in human rights and the profound differences we have.

And so that’s where the weight of the relationship is and what we have said is that we’ve got to act responsibly, both of us, to make sure that competition doesn’t turn into conflict and we take that very seriously, and we try to drive down the probability of conflict and putting the two militaries together in constant communication is one way to do that.

At the same time, when our interests are aligned of course we can work with China. I’ll just name a couple of areas where the two presidents have agreed—climate change. John Kerry and Xie Zhenhua are in Dubai today and they’ve been there for ten days, and China’s the leading carbon emitter in the world. We’re number two. We’re working together, not always in harmony but I think trying to achieve the same ends in the battle against climate change. That’s number one.

Number two, we want to work together in global public health and the fight, for instance, against infectious diseases. We have very strong public health capacity in both countries.

Number three, counter narcotics, and this is why fentanyl is front and center in the relationship given the severity of the public health crisis here. China can help. It started to over the last month and we’re very pleased about that.

Can that be sustained in the next year or two? That’ll be the great test. We hope it will be. And food security, so much food insecurity produced particularly by the war—Russia’s war on Ukraine and the problems with getting grain out of those two big grain producers, Russia and Ukraine, out of the Black Sea ports.

And I would also point to agriculture as probably the success story in this relationship where the United States is a primary supplier of food—of soybeans, of wheat, of pork products, of fishery products—to China and a very good match between our countries.

So we do see an engagement side of this relationship particularly in some of the big global issues where we have a responsibility together to do something for the world and it’s—I think what we in America have to, I think, understand is that a black-white perspective is probably not going to be helpful here.

We are going to compete but there are times when we have to work with China and I extend this, Pamela, to the people-to-people engagement. We need more American students in China. We need young people who will learn Mandarin so that twenty or thirty years from now when they’re running our society they have an intimate knowledge of China and of the realities there and they can speak the language.

And we certainly want to have more Chinese travelers in the United States. The perspective that I have as ambassador is we’re competing with the government of China but the people of China we ought to want to engage them for the long term. We have to live together. We’re not going to want to live in a world where there’s no contact between the two countries. That was the case in the old Cold War particularly with the Soviet Union. We have a very different relationship with China.

So I hope we’re able to keep those two contradictory thoughts in mind, maybe two halves of an equation. Competition is the driving thrust of the relationship but engagement and cooperation is very important for our interests as well.

LORD: And I would add also we want to recruit and keep here Chinese scientists and students and so on. There’s great talent coming to this country—

BURNS: It is possible.

LORD: —because the big competition, as you say, is going to be in technology and the whole future relationship and the stability of the world will be key to that.

Let’s go—

BURNS: Yeah. We have 292,000 Chinese students in the United States.

LORD: Right. It’s coming back a little bit. It went down and now it’s coming back.

BURNS: It’s gone up and it’s the largest—

LORD: You’re easing visa requirements and—

BURNS: We’re not—

LORD: There’s some legitimate security concerns, including scientists. But, again, I would—I’m sure you would agree we ought to be just aiming at those few particular areas and not foregoing tremendous talent that we could maintain in this country.

BURNS: Chinese are the largest foreign student group at our universities. They’re welcome in this country. We just issued—so 292,000 students here now. We’ve just issued 94,000 student visas over the last five months for a new batch of students to come, and so the door is relatively open but not completely.

We do follow a Trump administration executive order which means that if a Chinese graduate student wants to study nuclear weapons design at Carnegie Mellon or Caltech they’re not going to get the visa. We’re going to restrict the ability of certain students, particularly postgraduate students, Ph.D. students in those national security areas, we’re going to—we’re not going to allow them on American university campuses and we shouldn’t, and we enforce that at our embassy and in our consulates in China.

It’s a very small percentage of the overall applicant pool but a very important part of it.

LORD: Let’s go to the first of six hundred or so questions from across the nation.

OPERATOR: We’ll take our next question from Mary Boies.

Q: Thank you, Ambassador. President—

BURNS: Hello, Mary.

Q: Hi. Good to see you.

President Xi was courting our business community in San Francisco and yet it has a new counter espionage law that you told the Stimson Center last May might make illegal in China activities that our businesses normally do. Are you able to give us a semi direct answer on what the effect is of that new law? Thank you.

BURNS: I’d be happy to. It was nice to see you in Beijing recently. I hope you come back. I hope we have more American travelers to China.

I think this is one of the largest questions in the trade and investment relationship. Part of the message from Beijing is we’re open for business. We want American investment. But there’s another message and it’s a nationalist—it’s a hard national security message. You saw it in the Twentieth Party Congress fourteen months ago, and that is more closed. It’s an emphasis on national security and the counter espionage law, the amendment to it which went into effect on July 1 of this year is written in such a broad opaque way that normally—that lawful activities like due diligence or the collection of data, which any business has to do, could conceivably be construed as espionage. That has put a chill in the relationship and has cast doubt in certain parts of the U.S. business community about the intentions of the government.

Last spring we had seven American companies effectively—a couple raided by police, others punitive actions against them, a lot of them in this area of consulting in companies that dealt in data. We find this objectionable. We’ve told Secretary Raimondo and I have told the Chinese if you want investment this is not the way to get it.

And so I think if you look at the surveys of the American companies, and we have thousands of American companies working in China, 5,600 in Shanghai alone. That gives you a sense of the size of this relationship. Very few American companies are leaving China because the market’s so big. Very few are making major investments because of the uncertainty. Which way is the government of China turning? In a more statist direction where they favor the state enterprises or in a direction where the rule of law, your intellectual property rights can be respected, you can win if they’re not in a Chinese court?

I think that’s very much an open question right now and this is for the Chinese to decide—the government of China to decide which way it’s going to turn. But it’s somewhat murky right now.

LORD: Why don’t we take one more from the national audience and take a couple here in the studio?

OPERATOR: We’ll take our next question from Esther Brimmer.

Q: Good afternoon. This is Esther Brimmer, now at the Council on Foreign Relations. Ambassador, it’s so good to see you. Thank you for this discussion.

BURNS: Good to see you, Esther.

Q: In your remarks you talked about the resumption of military-to-military talks and you talked about the scope for competition and engagement. What are the other areas in which both countries are engaged? Is it outer space? This is the ultimate global commons where we see great power competition.

There is more important roles for private sector companies and important competitions among states. Both the United States and China operate international space stations. Both have plans to in the United States return people to the moon and China plans to be there. The expansion of economic, military, security activity into space is a central factor of modern international relations. Do you see a benefit or scope for conversations, dialogues, with China on the uses of outer space? Thank you.

BURNS: Esther, thank you for that softball question. That’s a tough question and it—but it’s an important one and I’m glad you asked it.

You know, there’s, frankly, very little common ground right now when it comes to our ability or inclination or theirs to cooperate on many of these—many of the issues you mentioned. You know about what Bill Nelson, the director of NASA, has done under President Biden’s leadership to think about both our future in terms of lunar exploration in the next several years and then on to Mars and that’s being done—the Artemis project—by the United States with our close allies but not being done with China or Russia and I don’t believe the Chinese have shown much of an interest in working with the United States.

So in a way it’s contested. It’s a contested area and we feel comfortable with where we are. I think we do need to shine—in a related area we need to have further illumination into what China is doing on nuclear weapons, another field that’s related to this.

China’s engaged, if you look at the public report that the Pentagon put out about a month ago, in a massive buildup of its nuclear arms industry stockpile but it’s not being very clear or transparent with the rest of the world about how it’s doing it and why it’s doing it.

What we did relatively early in the Cold War, especially after the Cuban missile crisis, if you think about the Test Ban Treaty of 1963 and then a whole generation, and we were part of this, of arms control with the Soviet Union was to understand that nuclear stability required openness, transparency, and the ability to work with each other to diminish the risk.

We’ve seen no such inclination by the Chinese and that’s a great mistake, we think, on their part. Now, we did have not a breakthrough but we did have a meeting recently about a month ago between the State Department and elements of the Chinese foreign ministry on arms control. We were happy to have that. We hope that can continue.

It’s a beginning but we’ve got to do a lot more and I think the world would expect us to do a lot more to have certain a greater level of connectedness and meetings to discuss that important issue.

So thank you, Esther.

LORD: Let’s take some questions from the audience. Yes, over here.

Q: Jeff Shafer of the National Committee on American Foreign Policy.

Mary Boies’ question kind of gave a good example of which there are many in ways in which at least from our perspective China seems to be moving in conflicting directions. It’s hard to believe that all that’s taking place is at the top with Xi. Is it the case that underneath that in this great bureaucracy there are conflicting centers of power that are pulling him back and forth? Do we have to deal with a multi-pronged China?

BURNS: Well, I think we’re dealing with a China where the party—the Communist Party—has become supremely powerful, where the position of the president who’s also a chairman of the Central Military Commission is supremely powerful.

And I think if you look at the last ten to twelve years in the evolution of China in terms of how it makes decisions and who has power there’s been a centralization of power, no question about it.

Now, in a nation of 1.4 billion people are there multiple views? Of course there are and you hear them. But what really matters is who wields the power, and so as we deal with the government of China we’re dealing, of course, with President Xi Jinping, with six other members of the standing committee, with the twenty-four members of the politburo. Think about the concentric circles, the 205 members of the central committee. That’s where the power is these days in China.

And so it’s very important that we’ve had these head of state meetings. President Biden and President Xi have had seven meetings in the last nearly three years, five virtual because of the pandemic and now two in person in the last thirteen months, and that’s a very important point of communication, obviously.

Tony Blinken, our secretary of state, has a very strong relationship as does Jake Sullivan with Foreign Minister Wang Yi. He’s also director of the Foreign Affairs Commission so he wears two hats.

What we’ve been able to do over the last seven months is also to connect with Secretary Yellen, with He Lifeng who’s a very powerful vice premier, with a lot of authority over the economic system. Secretary Raimondo has, I think, a very effective working relationship with Wang Wentao, who is the minister of commerce.

So we felt—I think we feel good about the fact that we’ve been able to establish and deepen these channels. I started off and answered Win’s question and the first question by saying we didn’t have them for most of the first half of 2023 and hopefully this brings greater stability in the relationship and a greater ability both to compete responsibly but also find those areas where we can work together.

LORD: Thank you.

Other questions over here? Yes.

Q: Robyn Meredith, author of The Elephant and the Dragon.

Xi Jinping is such an interesting character—

LORD: Can you speak up a little louder, please? Thank you.

Q: Xi Jinping is an interesting character not only because of this, what you just talked about—this centralization of power—but because his attitude towards capitalism itself seems quite different from Chinese leaders, you know, from Deng Xiaoping and onwards. Could you talk about your read on that change in the attitude of Chinese leaders on capitalism?

And secondly, just this reverse opium war. Sometimes China is retributionist when it dislikes political decisions a country makes whether it’s the Philippines in the South China Sea and then it lets their mangoes rot on the docks of China. Do you think that you—we’re in danger of some retribution from China on this very sensitive opioid issue of fentanyl for the U.S.?

BURNS: Well, you know, the Chinese classified fentanyl as a controlled substance back in 2018 and that was a very positive move. But then when the drug cartels then just went and began to import the precursor chemicals from black market firms in China and President Xi has now shut that down.

The minister of public security Wang Xiaohong made an announcement last week basically saying that Chinese companies had—could no longer be in that business. We’ve seen the Chinese over the last month take law enforcement measures against these black market firms.

So I’m going to concentrate on hoping that that continues and that’s going to be our focus on fentanyl over the next course of the last—next ten months.

In terms of your first question, you know, the direction—I think what we’re focused on is, is there clarity about where China is heading economically specifically in their relationship with foreign firms and, again, there are different messages coming.

There’s a message of reform and opening but there’s a contrary message that national security is going to override trade and investment interests and that’s why I think you see a pause by many American companies in terms of major investments. Japanese, South Korean companies, even European companies with a couple of exceptions—German automakers making big strategic bets, for instance, over the last couple of years.

There’s been three consecutive quarters now of negative foreign direct investment in China. That hasn’t happened in thirty years and so I think it’s an abiding—it’s a real preoccupation of the government in China right now to try to retain foreign firm involvement and to try to stimulate investment.

I don’t think that will change much. I don’t think that the foreign investment flows will change without greater clarity from the government of China. We’ve also asked that some of the nonmarket practices of the government be changed so that American companies will get a signal that they can invest and have a reasonable assurance that they can succeed in that investment.

But if you look at what’s happened in intellectual property rights, several years ago there had been some advances. Now we’ve seen some backsliding. This is what I hear from American companies just last week in Shanghai when I met with them about intellectual property rights enforcements.

There are examples of forced technology transfer. There are massive subsidies by the Chinese state and by provincial governments for certain key strategic Chinese companies that then have an enormous advantage over an American competitor.

So when Secretary Raimondo was in China in August she said we need some demonstrable signs that American companies can actually succeed in China given the unlevel playing field.

So there’s a lot to unpack there in your question. We could have a longer conversation. But that’s the message what I’ve just said, that we’re telling the Chinese government, you really cannot have it both ways. You’ve got to show that you’re more receptive to foreign involvement, in this case American business involvement.

LORD: Let’s take a couple more questions from the national audience.

OPERATOR: We’ll take our next question from David Aaron.

Mr. Aaron, please accept the unmute now button.

Apologies. We’re having some technical difficulties.

Q: No, I’m not.

OPERATOR: Great.

Q: I have—I’m here.

BURNS: Where’s David?

Q: OK.

BURNS: Hello, David.

Q: Hey, how are you? Nice to see you after a long time.

BURNS: Likewise.

Q: Well, the question I wanted to ask is what do you think we can make progress on in addition to the things you’ve talked about, things like climate change, things like cooperation on the problem that’s posed by North Korea? Is there any bright light there?

BURNS: If you’re asking where I think progress is possible in the next twelve to twenty-four months I’d say let’s hope on climate change. I think methane is going to be key here. When John Kerry and Xie Zhenhua met at Sunnylands the beginning of November the Chinese for the first time said that of course they’d be willing to talk about methane. They haven’t made any specific pledges yet, and that’s such an important—that’s a pernicious element in the battle of climate change. It’s very important they get to that.

Are they going to peak by 2030 in their carbon emissions or before it? Neutrality by 2060 or 2050? There are a whole bunch of—a whole set of very important questions on climate change. I think we’ll remain very strongly cooperative on agriculture, which is so important for both countries.

Let’s hope for progress on fentanyl. I think, David, one of the areas where we should be able to succeed is to put our people back in contact with each other. That is so—it’s the ballast in the relationship. If you think about ballast and the need for ballast in a ship it’s true of this relationship as well.

We should want to live in peace with China while we have a very difficult contested competitive relationship and so linking the—plugging the two people back into each other—tourists, students, business travelers, going from twelve direct flights a week in April of this year to seventy now, hopefully getting to a hundred direct flights, you know, by sometime early in 2024 if that’s possible.

We had 345 direct flights per week before the pandemic. Flights are important to make all this happen. So we’re really determined and I think both presidents believe very strongly that this people to people is very important strategically for this relationship because a constructive, peaceful relationship, however difficult it is, is going to be more stable if we’re—if the people of America are working with the people of China.

So we’re very focused on that. I’m passionate about bringing more American students to China. I’m working with university presidents in the United States to do that. It’s complicated but I think it’s possible to see a return of American students.

Xi Jinping surprised us in San Francisco when he gave a speech. This is after the meeting with President Biden. He gave a speech at a dinner and he said, we should have fifty thousand American students in China. It’s a big number. We’ve never had fifty thousand American students in China since 1784 when we began our relationship.

But it’s an important vision. I’m not making fun of it at all. It’s a big vision. I’d be happy to get us to a thousand and two thousand and five thousand. But fifty thousand ultimately who knows in the next ten or twenty years?

In a complicated great power relationship we don’t want the two people to be pulled apart. I think it’s very important, maybe not very much noticed by the press aspect of this relationship.

LORD: We’ll go to another question. But a very quick comment on climate.

I notice China’s cleaning our clock and is way out in front on some clean energy. On the other hand, they’re raising coal production to new levels.

BURNS: (They’re doing other things ?).

LORD: So it’s a real contradiction. So what else is new in China? And I would also argue in terms of future subjects for a discussion with the Chinese I can’t think of a more important one than artificial intelligence and I commend the administration for going for that.

Yes, another question, please.

OPERATOR: Take our next question from Nick Calbos.

Q: Nick Calbos, U.S. Department of State. Sir, I’d be remiss if I didn’t say I’m sitting in Addis Ababa next to Krista (sp), Greg (sp), and Anna (sp), and we just want to thank you for your sacrifices doing a difficult job and that of your wonderful family.

So, sir, my question is regards to China’s tacit recognition of the Taliban government of Afghanistan. What are the implications for the global efforts to hold the Taliban to account for their treatment of Afghan people in areas such as women’s education and human rights, and do you believe China is willing to use its clearly close relationship with the Taliban to achieve positive engagement or will they use it for their unilateral, commercial, and security interests?

BURNS: Thank you very much, and for people who don’t know Nick Calbos—Nick is a West Point graduate. He grew up in a military family. His dad was our Army attaché in Greece when I was ambassador there. His sister is best friends with our daughter Caroline (sp) and Nick is now an American diplomat.

And so we’re really proud of him. He’s a newly minted American Foreign Service officer. So thank you, Nick.

You know, China has a stake in the future of Afghanistan. I haven’t met this person but I understand that the Taliban have sent a representative to Beijing who was received by the chief of protocol a couple of weeks back and we hope that China is going to use its influence with that regime to make sure that that regime is complying with international law on a whole host of subjects, and Nick has mentioned some of them.

I don’t want to say too much more on that subject except to say that, you know, we’ve got to hold China to a standard in some of these relationships. You mentioned North Korea, which is violating North Korea U.N. Security Council resolutions and China and Russia have been blocking our attempts to call North Korea on the carpet for that behavior and I think it’s similarly true in Afghanistan.

China has a stake. It has influence. We hope it’s going to use that influence in a positive way. Thank you, Nick.

LORD: You know, there’s an old cliché about, oh, we wish we had more time. We could go on forever. In this case it has the added virtue of being true and, Nick, you’ve got hundreds of friends tuning in across the country who I’m sure would want to ask you questions. Maybe even your enemies want to ask you questions. (Laughter.)

But so I—my apologies to the national audience we can’t squeeze you all in. Same here with this audience. Let me conclude with one question of my own, again drawing on your global experience.

Is Xi and are the Chinese out to modify the international order or to transform it?

BURNS: Win, I think that China has a big view of itself and its future role in the world. We are certainly concerned that the liberal order that we helped to create in the wake of the Second World War we’re concerned whether or not China wants to see that world—that order continue.

We want to see a world where human rights are respected. Secretary Blinken referred in his statement to the Universal Declaration on Human Rights in his Sunday statement. I did the same in my statement on China.

We think that China ought to meet those standards and it’s not, clearly not, on Xinjiang, Tibet, Hong Kong, religious freedom. We think China ought to use its influence to stop wars like Russia’s illegal war on Ukraine. It’s not doing that. We would hope that China would play a more vocal role in criticizing Hamas which brought this war against the Israeli people.

And so we don’t agree on some of these issues and it’s going to be up to the Chinese to try to articulate a vision for the future which we hope is going to be consistent with the liberal order that we believe is the best for the people of the world, going forward.

So we’ve talked a lot today about the differences between us. They’re real. We have systemic differences with China. The test is can we contest those differences peacefully and in a responsible way.

We are dedicated to that proposition because we want to steer well short of conflict. But we have to make these differences clear, and at the same time can we work together with the Chinese on those issues where our interests are aligned and climate change is probably the best example of that—fentanyl is another example—and that’s the test of a relationship that is both competitive and cooperative.

And so we have to stay engaged government to government and our people have to stay engaged. I don’t think we can look at this from a black-white perspective as we talk about this here in the United States. We have to have, I think, a more sophisticated view of where our interests lie, and I would go back to what you said so well. I mean, President Biden’s view is invest in the United States for this competition and we’ve done that very successfully.

Make sure that we are paying attention and rebuilding our alliances, which we’ve done both with our East Asian allies but also with NATO and the EU. We’re very close to them in talking about the challenges that China faces and competing where we must.

So that’s the basis of our policy and we think that we’ve done well over the last three years to strengthen the U.S. ability. Keep the peace with China but compete at the same time. It’s a complicated relationship.

I’m really proud to be there serving with a tremendous group of American public officials, public servants from forty-seven U.S. government agencies. We couldn’t be better served than by the people that we have working. I feel that way personally, and we’re dedicated to trying to move this relationship forward but protect American interests at all costs.

LORD: Well, that’s an appropriate note on which to end.

At the beginning of this meeting and I reminded you the credentials of Nick Burns to be ambassador to China were pretty clear. You’re now seeing him live in action and performance.

So the Council has told me what they’re going to do after this meeting, Nick, they’re going to send a questionnaire to all Council members who listened to this meeting and if anyone can come up with a better person to be ambassador in China at this point—(laughter)—they will submit that—

BURNS: There are plenty of people.

LORD: —and their dues will be waived for the next five years. (Laughter.)

So I think the Council finances are safe and America is so much safer in a very tough world with a tough competitor having Nick Burns in Beijing. And thank you, Nick.

BURNS: Thank you, Win. Thank you. Thanks, everybody. (Applause.)

(END)