Dealing with China: An Insider Unmasks the New Economic Superpower

by Henry M. Paulson Jr.

reminisced

protégé

acrimony,

ingenuity—and

stamina—of

The work unit, or danwei, was the central organizing force in people’s lives in urban areas.

squishy

meager

was then and remains to a great extent today a nation ruled by men, not laws. Trust and face were uppermost: you had to trust that if the Chinese committed to doing something, they would deliver, even if they danced

around the point. In dealing with China’s most senior government and business leaders for two decades now, it has been my experience that they have come through, without fail, when it was in their best interest to do so.

IPO proceeds

repugnant

I have never been an all-or-nothing person.

undersecretary

lukewarm

potable

cadmium

confiscation

nascent

exacerbate

reminisced

inadvertent,

apprehension

complementary

Tough talk and action are broadly popular with the Chinese public and with the Party elite.

China’s muscle flexing is a dangerous phenomenon that has complicated its relations with the U.S., our Asian allies, and other countries in the region and has given more credence to the arguments of confrontationists.

We should oppose the use or threat of force or other forms of coercion to settle these disputes.

Russia’s annexation of Crimea in March 2014 and its subsequent efforts to destabilize eastern Ukraine remind us of the dangers of taking the status quo for granted and underscore the importance of strengthening U.S.-China relations.

pilfering

In one comically inept hack that I know of, data from a U.S. military contractor wound up in the files of a U.S. entertainment company.

perpetrators.

The May 2014 indictments returned by a federal grand jury in Pennsylvania against five officials of China’s People’s Liberation Army for computer hacking and economic espionage was

an attempt to do just that.

unpopular in both countries. The substance of China’s U.S. policy under Xi hasn’t changed, but the tone has become more strikingly nationalistic, with its full-throated endorsement of a “Chinese dream.”

The S&ED structure would work even better if each country designated one person to lead its side. In the U.S. that person should probably be the vice president; in China it could be the premier.

rigorous