Jon M. Huntsman Jr. has forged a rare political path. After serving as the governor of Utah, Mr. Huntsman, a fluent Mandarin speaker, became President Obama’s ambassador to China â€" then resigned to oppose Mr. Obama’s re-election with an unsuccessful run for the 2012 Republican presidential nomination.
Since then, he has helped produce a report on cyberhacking that labeled China “the world’s largest source of intellectual property theft.†Mr. Huntsman sat down with John Harwood of The New York Times and CNBC at the Conrad hotel in New York to discuss Mr. Obama’s meeting this week with President Xi Jinping of China, the future of the Republican Party and the 2016 presidential race.
What follows is a condensed, edited account of their conversation, as transcribed by Katherine L. Kreider.
What did you try to do about cyberhacking as ambassador, and why didn’t it work?
What I tried to do specifically, and what I think has been tried since, is to find centers of best practices in China. Our thought was, if we can find the examples of excellence of enforcement in China, bring out the local officials and the party bosses and local state-owned enterprises who had been part of that model, and compliment them on it, and get them together with U.S. businesses and laud that good behavior, then those models will expand into something larger. It’s slow going, and that’s the painful part of it. You have to bring in China, and convince them that doing something about it is actually something in their long-term interest if they actually want to create an innovative and entrepreneurial society, which is their goal.
To what degree can this be solved by government-to-government diplomacy?
Limited. You can create red lines, boundaries that are set. Every country assumes there are going to be national security targets that are poked at. But when China goes well beyond that, that’s when it’s a huge problem. The longer-term play is going to be on engaging this entrepreneurial society that’s coming in China. They’re coming up very quickly. They want to have name-brand, respected entities, they want to go global, they want to come to the United States.
If you carry that image and reputation as being a rip-off artist, that’s going to hobble you in the marketplace. They’re going to be ripped off, too. When I lived in Taiwan in the 1980s, Taiwan was an egregious violator of our intellectual property. When they created their first industrial park dedicated to technology and they had local entrepreneurs innovate and create new stuff, they then took this up as their issue, because it affected them.
Chinese leaders come and go, and Americans don’t really notice the difference. What’s different about President Xi?
President Xi is a princeling, the son of the former deputy prime minister. He’s a former governor of major provinces, which on a stand-alone basis in terms of population and G.D.P. are bigger than most countries in the world. He’s somebody who gets the whole economic side, understands investment and trade and what it takes to make a marketplace work. He’s sophisticated, confident.
His goal will be to keep the party in power, make sure it is the centerpiece of all things important in Chinese society, but at the same time you have to loosen things up. You have to move towards rule of law and expanded civil society, and greater certainty about investment, trade and commerce. You’re going to have to figure out a role for the Internet in society. You can’t block it and expect China to become an innovative and prosperous country longer-term.
Grade President Obama on how he’s doing with the Chinese.
Well like most presidents at this point, it’s incomplete. I’ve watched him in action, and I think he’s a very solid president as it relates to trying to understand the subject matter, forging a relationship â€" Hu Jintao, Xi Jinping â€" I think he’s very dedicated to that end. So his priorities might be a little different than the rest of us, but he’s doing his best. Now what is interesting here is, the rhythm of the U.S.-Chinese relationship is synchronized for the first time in recent memory. You have the rise of the fifth-generation leaders in China under Xi Jinping and an open set of possibilities here.
The president’s going to have to forge a head-of-state to head-of-state dialogue. We have never really been able to do that. He’ll have to begin to forge a reprioritized agenda with Xi Jinping, where things like cyber will probably poke into the top three or four priority issues.
Is cyber now more important than currency, which for years was what American politicians talked about?
Currency was always a temporary and fleeting kind of issue, because they’re appreciating 3 percent per year when you’re factoring in inflation. They’re going to have to wind up at a destination for their own purposes, so it’s a nonsensical conversation. Cyber, on the other hand, is real â€" and it’s a big dollar volume that we’re losing out on as a country. I would guess it would come up as the premier economic issue that would be infused into the dialogue.
Should Americans be worried that a Chinese meat conglomerate just bought Smithfield Hams?
We’re part of a global economy, and we need to accept that fact. And when you look at China’s total investment in the U.S., it’s a small percentage vis-à -vis its entire economic base. For them, the sensitivity will be if America is going to accept its investment, or if it’s going to respond like it did 20 years ago with Japanese investment, which would cause a breakdown of our entire economic relationship. They still see America as the premier market anywhere in the world. We’re 25 percent of the world’s G.D.P., we’re safe, we’re predictable.
But here’s the other part: they’re going to have to clean up their act as well, whether it’s I.P. theft, market access, greater transparency in corporate governance. They’re going to have to look a whole lot different as entities as they enter the U.S. market, and that’s a good thing. Let the reviews occur on the downside risk, but let’s not forget that there’s an upside, too.
The only way you raise those standards is to get out into the marketplace. You’re forced to compete and you’re forced to abide by new standards, or you lose business. And knowing China as I do, their desire will be to go up the ladder in terms of quality and value added, and global competitiveness.
So this will be part of a longer-term evolution as they engage with the world and try to improve their standards over all for trade and commerce. If you start blocking entry from this country or that country, you get to the Smoot-Hawley tariff situation of a couple of generations ago, and we all know the disaster that ensued from that.
What’s working and what isn’t working in our relationship with China right now?
Well, we’re up to $500 billion in trade. We were at zero 40 years ago. This relationship has come farther, faster than any relationship in humankind. We now have 200,000 students in this country â€" China just overtook India with the amount of students in America. You get the next generation learning in our schools, associating with Americans, better understanding our values. And they take that home â€" that’s a huge deal.
Our cooperation â€" however slow or difficult â€" on Iran and North Korea is way more stepped up today than it has been in the past, because our interests are more and more in line as the top two economies in the world.
We don’t have enough trust in the relationship to drill down to a level of granularity where you can, for example, talk about contingency planning on the Korean peninsula if you have a failed nation-state in the North. What do you do about the nukes? What do you do about refugees? What do you do about command and control? There isn’t a road map developed yet for that kind of thing, which to me should keep policy makers up at night. It did to me in Beijing.
It’s not the confrontation that I worry about â€" that’s way overblown. What concerns them is the same thing that concerns us, and that is an implosion on the Korean Peninsula by a crazy leader that unleashes uncertainty in a region that is now close to being 20 percent of the world’s G.D.P.
Let’s go to U.S. politics. What does it say about the Republican Party that Michele Bachmann made a bigger splash in 2012 than you did?
Politics as theater. There’s a lot of entertainment value in politics, I’ve come to find. So if you want to talk about the big issues of the day and put forward a policy reform to deal with education, energy, foreign affairs, that doesn’t get the bounce or the altitude that the political theater does. If you want to call somebody a name, if you want to give a speech with crazy content â€" that will sell, and that will get you on the front pages of the newspaper.
And sadly, that’s where politics has become a little surreal and a little too focused on the entertainment side of things. It’s bad for the candidates and it’s really bad for the voters. The substance and the vision about where this country is going, rarely is that able to get to the surface.
Republicans seem to be rallying more around investigations of the Obama administration, as opposed to what Representative Paul Ryan is trying to do in the budget, what Representative Dave Camp’s trying to do on tax reform, what Senator Marco Rubio is trying to do on immigration. Do you see any prospect this is going to change?
Probably not. But scandal-mongering, however serious these issues are, is not a strategy. I think this illustrates the disconnect between the culture of Capitol Hill and Americans everywhere else who say, “We haven’t seen this country work in a long time. Prove to us, political leader, that this nation can still work, and produce jobs, and compete, and educate the next generation and bring to the forefront an energy agenda that will allow us to become energy independent.â€
So, all of the things that will kind of bring this nation back on its feet, that’s what Americans want to see and hear about. They want to know their country works and that their country is relevant, and sometimes that conversation isn’t seen enough on Capitol Hill. Republicans need to be seen as problem solvers. You have to sit at a table, you have to grind away, you have to compromise. So long as compromise is seen as something analogous to treason, we will lose.
Phasing out the loopholes and deductions in the tax code â€" many have said, traditionally, even that step would constitute a tax increase. I don’t know what world those folks are living on, but to me that’s a way to move forward, clean up the tax code, make us more competitive, broaden the base, lower the rate and leave this nation with a much more competitive code that hasn’t been addressed since 1986.
How are you going to go about deciding whether to run for president again?
I think this cycle will be driven by ideas and less by personalities. People out there want to hear the ideas that will move this nation forward. And if those ideas bring somebody forward as a candidate, then I think that’s probably how things are going to work. The next two years will really tell that story. I’m ready and willing and prepared to serve. But the ideas will drive that or not. If you find early on that people just really don’t like your ideas, why waste your time?
The millennials are a very smart generation. They get the big issues that we’re working on. I think they get the idea that unity, and appealing to a broader demographic, is the only way the Republicans are going to survive long term. So we’ll see how 2016 goes.
