Former U.S. Ambassador Max Baucus

American businesses have an important role to play in stabilizing “terrible” U.S.-China relations at a time when hawkish comments from both sides are propelling a downward cycle in ties, former U.S. Ambassador to China Max Baucus said in a Forbes interview on Monday.

“Obviously the relationship’s not good — it’s terrible,” said Baucus, a long-time U.S. senator from Montana before he served as ambassador in the four years to 2017.

Businesses able to build commercial and personal relationships “really help the relationship,” he said. “Because if there were no strong commercial relationships today between U.S. and China, man, oh man, I just think at the geopolitical level, we’d be in a real world of hurt.”

“The real ballast here is business,” Baucus said via Zoom. “Both countries need each other economically.”

“We’re joined at the hip, and that’s not very well known,” he said.

Baucus discussed U.S. ties as part of the U.S.-China Business Forum organized by Forbes China, the Chinese-language edition of Forbes, held in New York on Aug. 29. (Click here for full Baucus interview.) Other participants included Chinese Ambassador to the U.S. Xie Feng (see Xie speech here).

U.S.-China ties have been going downhill for about a decade, though the trend accelerated owing to trade policy decisions and demonizing during the Trump administration, Baucus said. A new book by Trump-era U.S. Trade Representative Robert Lighthizer, “No Trade Is Free,” also highlights “the threat we face from China.”

The Biden administration, while legitimately acting to protect U.S. national security, has also followed some of Trump’s approach — namely sanctions and export controls, and imposed investment restrictions, Baucus said. Its dispatch of Treasury Secretary Janet Yellen, Secretary of State Antony Blinken, and this week, Commerce Secretary Gina Raimondo to China is “helpful” in that the two sides are able to speak to each another and express a point of view.

However, Baucus doesn’t “expect much out of” the visits because the Chinese see Americans as only “doing a lot of talking,” he said. “They don’t see United States really acting positively. And some actions they do see from their perspective are not positive.”

Back in the U.S. itself, China’s suspected flying of a spy balloon over the American heartland hurt ties. “The problem with the balloon is it’s visual. It’s up in the sky; it was passing over the United States, even over my home state of Montana,” Baucus said.

“Everybody wrote about it; everybody took pictures of it. It’s a big deal, it’s a visual. Contrast that with talks. There’s no visual there — it’s just talking heads. It doesn’t really grab people. And as we all know in life, generally, negative news has more potency and currency than good news.”

Balloon fallout had fed anti-China sentiment in the Congress that is “not only bipartisan,” he said. “It’s intense.”

“It’s very easy for anybody to be critical of China. There’s no cost. There is no cost to any congressman or senator or state legislator for criticizing China. There’s no downside. So they do it help get re-elected,” Baucus said.

Next year’s presidential and Congressional elections in the U.S. will likely bring “more China bashing” by presidential and Congressional candidates, he said. Though China recognizes much of the talk is driven by U.S. election-year politics, “there is a cost” to U.S.-China ties, he noted.

“All that criticism by Americans against China emboldens the hawks in China, (and) makes it very difficult for China to take a step toward the United States,” Baucus said. “Things are really stuck. It’s unfortunate.”

“Over time — it may not happen till after the 2024 election — both countries are going to realize that we have to work with each other,” he predicted. “China’s not going anywhere; it’s going be here on this globe. America’s not going anywhere; we’re always going to be here.”

“And so like in arranged marriage, we’ve got to figure how to accommodate each other,” Baucus said.

That “isn’t happening because there’s very little trust,” he said. “There’s very little trust because there’s so little communication between the two countries. And because each country likes to take critical pot shots and criticize the other.”

“This is not a marriage based on love, but it is a marriage based on arrangement by the geopolitical forces of the world, and there’s no divorce. No country’s going to get off this planet. We’re here. We learn how to accommodate each other.”

See related posts:

China Ambassador To U.S. Xie Feng Calls For New Path Forward In Ties At Forum

Why China Still Beckons For Some Globally Minded Foreign Businesses

@rflannerychina