By Debbie Yong
December 6, 2017

Much has been said in the conversation on China-U.S. relations so far, but the one topic that hasn’t garnered enough focus, according to Henry Paulson Jr., is the areas where the countries should be working together more deeply—but aren’t.

“Frankly I’m a bit concerned when it comes to U.S.- China relations,” Paulson said during a panel discussion at the Fortune Global Forum in Guangzhou, China on Wednesday. “Start at the top. The two heads of state have a good relationship and a good rapport. That means really difficult, complicated issues like North Korea, there’s a greater possibility of making progress on those. But then there are many other significant issues that need to be dealt with, and that takes good people on each team to work together.”

Paulson continued: “So when I look at this today, one of the things that disturbs or concerns me is, I see, other than North Korea, I don’t see what the issues are where you see the two sides working together collaboratively toward a common goal. Where are the areas where we’re working together? Why aren’t we working on bilateral investment that’s going to create jobs? What about working together to solve environmental problems?”

Paulson is the founder and chairman of the Paulson Institute and also served as the U.S. Secretary of the Treasury from 2006 to 2009.

“It is not a zero-sum game. It is a complex non-zero sum game,” added Victor Fung, chairman of Hong Kong-based retail and logistics conglomerate Fung Group. “Which means we have areas in which we compete and areas in which we cooperate. And I think we’ve got to get the balance right. If you actually want to compete in every area, you’re turning a non-zero sum game into a zero sum game and that is not good for everyone in the world.”

Instead of relying on government-to-government relations, Fung suggested more business-to-business cooperation “would help to cement the idea that we can do things together that are of mutual benefit.”

For Royal Philips CEO Frans van Houten, it’s all about shifting one’s perspective. Instead of viewing intellectual property as a matter of competition, Philips has recently opened their artificial intelligence-powered medical diagnostics platform as an API and invited Chinese developers to build applications on top of it “so it becomes an ecosystem where we need each other,” he said. “That’s the fastest way to tap into the capacity of a market without fighting each other.”

Besides, van Houten added, as China moves from a manufacturing-driven society to one driven by growing middle-class consumption, and soon, by innovation, the world will see more technological transfers from China to the U.S., rather than the other way around. “China has doubled up on its technology, talent, and creativity in the digital domain and it will go much faster than the U.S. and Europe.”

The Chinese consumer, additionally, is fast becoming the most discriminating consumer in the world, Fung pointed out. About 110 million Chinese travel abroad every year and “they’re tech-enabled, spending hours on the phone everyday, and a well-to-do market at a much younger age.”

As new business models rapidly emerge in China, especially in the online-to-offline tech space, “we’ll soon need to look at what’s happening in China first and then to its application to other parts of the world,” Fung added.

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