In early 2023 Professor Scott Rozelle, SCCEI Co-Director, was asked to participate in a Track Two diplomacy effort between the US and China focusing on the current state of scholarly exchange between the two countries.

There are many ways to build and maintain relationships between nations, the most official way being through track 1 diplomacy, when communication is directly between governments. However, geopolitical climates can make track 1 diplomacy challenging to achieve or even fruitless, if executed, which brings us to Track Two diplomacy. Track Two diplomacy is when people from one country meet with people from another country, in this case scholars from both the US and China, to talk about a specific issue affecting both nations: “Scholarly Exchange between the US and China.” The delegations typically have the blessing of the governments, and often have the ears of government officials after the meetings, but are not made up of government officials or direct government representatives. This encourages more open conversation and genuine camaraderie between the two delegations.

As part of SCCEI’s effort to build bridges between empirical China scholars in academia and China policy experts, SCCEI’s Impact Team attended the 13th Annual China Business Conference held in Washington, D.C. from May 9-10, 2023. Co-hosted by the U.S. Chamber of Commerce and the American Chamber of Commerce in Beijing, the conference has evolved into a critical platform for U.S. government officials, corporate leaders, and policy experts to explore and debate the dynamics of U.S.-China relations.

The conference convened an impressive mix of attendees, including senior officials from the Departments of State and Commerce, the Office of the U.S. Trade Representative, Senators and Representatives central to shaping China policy in Congress, executives from multinational companies, and influential members of the beltway China-watching community. Dozens of panelists drawn from these ranks discussed a wide spectrum of issues facing the troubled U.S.-China relationship.

Several panelists expressed pessimism regarding China’s macro-economic outlook.  There was skepticism regarding the depth and durability of China's economic recovery in the post-Zero Covid era. Experts voiced concerns over the robustness of the recovery, casting doubt on whether it can be sustained over the long term. Furthermore, the debates pointed to an increasing consensus on the likelihood of a structural slowdown in China's growth.

Concerns were raised about the worsening climate for policy debate within China. There was reference to an uptick in reactionary policies and emerging "policy schizophrenia" from Beijing, leading to a less predictable policy environment. Panelists noted the mounting pressure for businesses operating in China to align with Beijing's political priorities, which may complicate the operating environment for foreign enterprises. There was a consensus that China's leadership is showing an increased willingness to take risks.

In the discussions centered on U.S. business in China, numerous challenges were highlighted. Regulatory uncertainties, the declining role of businesses in stabilizing U.S.-China relations, and mixed sentiments about the cost-benefit analysis of operating in China took center stage. Despite these hurdles, panelists emphasized the critical role of personal contacts and talent acquisition in navigating this complex landscape. They highlighted the need for U.S. companies to remain engaged in China, stressing the opportunities to learn from innovative Chinese companies, and the importance of success in the Chinese market for global competitiveness in certain sectors. Scenario planning around supply chain risks, market dependency risks, and U.S.-China regulatory uncertainties were advised.

Discussions on geopolitical risk also extended to the sensitive issue of Taiwan. There was a consensus among panelists about the imperative for the U.S. to avoid armed conflict with China and to establish guardrails around this increasingly contentious relationship. A defense department official reiterated US administration’s assessment that military conflict over Taiwan was not imminent or inevitable. In addition, some panelists also encouraged the U.S. administration to provide explicit assurances to Beijing that the U.S. does not support Taiwan independence and is willing to accept any outcome on Taiwan that is arrived at peacefully and that aligns with the interests of the people of Taiwan.

Members of Congress in attendance cited the need for "reciprocity" in relations with China and a collective "awakening" across the policy community to the troubling aspects of China's rise. They also explored the potential for including education, skills training, immigration reforms, and energy and military development in future legislation to bolster the U.S.'s competitiveness vis-à-vis China. Panelists deliberated on the possibility of new policy mechanisms, including an impending outbound investment screening regimen and additional tech export controls. Several panelists also cautioned against wholesale decoupling or US actions that would reinforce perceptions in China that relations are irreparable.

The business and policy making communities are both key audiences for the SCCEI Impact products, and the impact team participates in these events to contribute to and learn from debates among these leading stakeholders in the U.S.-China relationship. These conversations and exchanges of ideas facilitate a rich understanding of the dynamics at play, ensuring that the SCCEI's work remains informed, relevant, and impactful in informing discussions about China and the U.S.-China relationship.

Learn more about SCCEI Impact.

Participants at the Stanford Asia Economic Forum, held at Capella Hotel in Singapore on January 14, 2023, explored the role that Asian countries and the U.S. can play in creating new ideas, sustainable practices, sound policies that spur global growth and economic development.

The forum was held by Stanford Graduate School of Business, Stanford Institute for Economic Policy Research, Stanford Center on China’s Economy and Institutions (SCCEI), and the Freeman Spogli Institute for International Studies (FSI).

Nearly 400 people from around the world attended the event, including Stanford University President Marc Tessier-Lavigne, Singapore Foreign Minister Vivian Balakrishnan, Stanford alumni and faculty, and industry leaders. The forum was hosted by Stanford University alumni Liqian Ma and Forrest Li, Chairman and Group CEO, Sea Ltd.

Stanford GSB Dean Jonathan Levin noted that Stanford began the forum in Beijing five years ago with the goal of building bridges and fostering open exchange of ideas. One of the key roles that great educational institutions can play, he said, is to promote greater mutual understanding across countries.

“Today, it is appropriate that we convene in Singapore, which is fast becoming a new center of gravity in Asia due to its openness to trade, immigration, ideas, and serves as a jumping off point for much of Southeast Asia,” Levin said. “Our hope is that the dialogue today will spark ideas that grow into new collaborations and solutions.”

Stanford professors Hongbin Li and Joseph Piotroski served as faculty directors for the forum, which featured panels addressing: Sustainability; Innovation Ecosystem of Southeast Asia; Productivity and Creativity in the Digital Era; Future of Life Sciences and Engineering for Humanity; Importance of Southeast Asia in the Global Economy and Geopolitics.