China’s President Xi Pledges ‘New Model’ of ‘Mutual Respect’ with U.S. Amid Tensions

By Peter Robison, Ting Shi and David Tweed | September 23, 2015

Chinese President Xi Jinping opened his U.S. visit by seeking to ease concerns on almost every dispute between the two powers, even expressing readiness to cut a deal on one of the thorniest issues, cybersecurity.

In a 35-minute speech in Seattle laced with references to American culture from “House of Cards” to Hemingway, Xi told business leaders that China was committed to market-based reforms and wanted to modify, not overturn, the economic world order. He disavowed any interest in spheres of influence and pledged to find common ground with U.S. President Barack Obama on military encounters and securing cyberspace.

Xi’s week-long U.S. visit, including a Sept. 25 summit with Obama and a speech at the United Nations, has been touted by both sides as an opportunity to defuse mounting tensions between the world’s two largest economies. The president’s speech touched on the issues that have strained ties in recent months, which include China’s campaign to halt a local stocks rout, territorial spats in the South China Sea and U.S. accusations of espionage by state-sponsored Chinese hackers.

“He set out the main purpose of his visit as building trust and defusing suspicion,” said Zhou Qi, a senior researcher at the Institute of American Studies at the Chinese Academy of Social Sciences. “He’s saying, ‘Look, we really value our ties, and secondly, let’s do this from a strategic height.'”

Xi was speaking at a welcoming banquet of business leaders and government officials attended by former U.S. Secretary of State Henry Kissinger, Microsoft Corp. co-founder Bill Gates and others. He was welcomed by U.S. Commerce Secretary Penny Pritzker, who called on China to proceed with economic reforms and ensure “a level playing field” for foreign businesses.

Xi used the trip to seal a deal to buy 300 aircraft from Boeing Co., which will host the president Wednesday at its Everett, Washington, factory. The Commercial Aircraft Corp. of China, known as Cormac, also signed a pact to build a 737 completion-and-delivery center, the first facility of its kind outside of the U.S.

Strategic Cooperation

Xi said China “will never close its open door to the outside world” and pledged fair treatment of foreign businesses. The president said judicial reforms would protect human rights in China and vowed to uphold the legitimate rights and interests of foreign non-profit groups operating in the country. He rattled off a list examples of recent cooperation with the U.S., including North Korea, Iran and the Ebola crisis.

“We must read each other’s strategic intentions correctly,” Xi said. “Building a new model of major country relations with the U.S. that features no confrontation, no conflicts, mutual respect and win-win cooperation is the priority of China’s foreign policy.”

The speech offered a few personal flourishes, with Xi citing his admiration for George Washington and describing how he once sipped a mojito in Havana to commune with the spirit of Hemingway’s works. Xi alluded to Netflix Inc.’s hit political drama while denying that his marquee anti-graft campaign was a effort to purge enemies. “In this case, there’s no ‘House of Cards,'” he said.

Cybersecurity Dialogue

The conciliatory comments came despite growing tensions with the U.S. over Chinese muscle-flexing in the South China Sea, where U.S. forces have patrolled unchallenged for decades. A new spat emerged as Xi began his visit when Chinese authorities formally charged a U.S. businesswoman with spying.

Xi described China as a victim rather than and instigator of cybersecurity breaches. The president said the country was ready to establish a “high-level, joint-dialogue mechanism” to address the issue.

U.S. government agencies and companies are reeling from sophisticated attacks alleged to have been carried out by the Chinese government or its proxies, including the theft of corporate information and millions of health care and federal personnel records. Obama has warned about possible reprisals, while expressing “hope” that the countries could agree to “some basic international framework” on cybersecurity.

Deputy National Security Adviser Ben Rhodes cited cybersecurity during a conference call before Xi’s speech as “an area where we have not made the progress we’d like to make.”

Stock Rescue

Xi “is putting his reputation on the line,” said Tobias Feakin, director of the International Cyber Policy Centre at the Australian Strategic Policy Institute in Canberra. “He has admitted they need a high-level working group, but the proof will always be in who is on that working group. What is its agenda, when is it going to start work and does it have any teeth?”

The Seattle leg of Xi’s trip includes a tour of a Boeing factory and a visit to Microsoft’s campus, where China’s top Internet regulator is meeting with technology executives. The president will hold talks with some of the U.S.’s most prominent business leaders such Apple Inc.’s Tim Cook, Berkshire Hathaway Inc.’s Warren Buffett and Amazon.com Inc.’s Jeff Bezos.

Xi also defended Chinese intervention to halt a stock market rout that wiped $5 trillion from local equities, while signaling his government was stepping back. The Shanghai Composite Index has fallen more than 40 percent from its June peak and slid 2.2 percent Wednesday after a preliminary manufacturing gauge unexpectedly fell to a six-year low.

“The Chinese government took steps to stabilize the market and contain panic in the market and thus avoided a systemic risk,” Xi said. “Now, China’s stock market has reached the phase of self-recovery and self-adjustment.”

Seattle has long been a favorite stop for Chinese leaders looking to demonstrate trade ties between the two countries. Washington was the largest exporter to China among U.S. states last year, with almost $21 billion. Xi landed Tuesday in an Air China Ltd. Boeing 747 at Paine Field, near the factory where the planes are made.

Under the new deal, the 300 aircraft would be purchased by a group of companies including China Aviation Supplies Holding Co., ICBC Financial Leasing Co., and China Development Bank Leasing, the official Xinhua News Agency said. The report didn’t provide the order details.

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