Secretary Robert Gates delivered these remarks en route to Beijing, China from Andrews Air Force Base

Secretary Gates. I'll just—I will say kind of as opening one-liner that—I mean, obviously, the purpose of the trip is to see if we can further expand the military-to-military relationship between the United States and China, deepen it, and also visiting our allies—Japan and Republic of Korea—partly in the wake of the tensions on the Korean Peninsula last fall and the provocations from the North, but also looking for continuing efforts to strengthen those two alliances as well.

In China, the main purpose, as I say, is to look for ways to expand the relationship. I think that seeing if we can come to agreement on developing a strategic dialogue that talks about strategy and policies and perhaps outlooks. I believe for a long time that that kind of a dialogue contributes to not just greater understanding, but contributes to avoiding miscalculations and misunderstandings and miscommunication.

We'll also be looking at—when General Xu was in Washington I guess in November—October of ’09, we agreed on seven specific areas of cooperation—more high-level visits, more exercises, more exchanges from our professional military organizations and so on. Most of that has been on hold ever since and so I'd like to see if we can move forward in those areas as well.

I think that, you know, it's pretty clear the Chinese wanted me to come before President Hu visits Washington. My own view is that a positive, constructive, comprehensive relationship between the United States and China is not just in the mutual interest of the two countries, it's in the interest of everybody in the region, and I would say across the globe. And I think certainly the president is looking forward to having President Hu in Washington, and my hope is that this visit will strengthen what I think both presidents believe is an underdeveloped part of the relationship. From the time of their first meeting, President Hu and President Obama have wanted to see the military-to-military relationship be strengthened.

And, finally, I would just I would like to see this relationship go forward in a way that is sustained and reliable, that despite the ups and downs that come with any relationship that this channel—these channels remain open in our efforts together and continue to go forward.

Q. You sounded some of the same notes when you came here in 2007, talking about—

Secretary Gates. I remember.

Q. In the intervening years, what have you learned? What do you think makes this different to prevent the ups and downs in the military-to-military relationship on again, off again? How can you think broader? How can you—?

Secretary Gates. Well, I think—first of all, I think the overall environment and atmosphere is perhaps better. Certainly from our standpoint, we recognize that China played a constructive role in lessening tensions on the peninsula in the latter part of last year, and clearly there's an interest in both countries of having President Hu's visit be successful.

And I think, again—I'm sorry I have to repeat myself—I think that the Chinese clear desire that I come first—come to China before President Hu goes to Washington was an indication of their interest in strengthening this part of the relationship in terms of helping further set the environment and the tone for Washington.

Q. Just a quick follow-up. Taiwan obviously has talked about political dignity—– politics and—. Is there a concern that—they cannot understand—the basic military-to-military relationship?

Secretary Gates. Well, the point that I made to General Liang in Hanoi was that that decision is a political decision and to isolate it or to confine the consequences or the reaction purely to the military arena, I think is not consistent with the nature of the decision-making itself. And of course, as you suggest, I mean, the whole basis of this relationship is the three joint communiqués and the Taiwan Relations Act, and I think we've been pretty selective over the years in ensuring that those sales were defensive in nature, but I'm sure that the topic will come up.

Q. Mr. Secretary—

Secretary Gates. We don't know the answer to that question.

Q.—China's civilian leadership wants a better military-to-military relationship with the U.S. and are to some extent being frustrated by the Chinese military.

Secretary Gates. Well, again, I don't know. The—it is clear that, as I said earlier, I mean, clearly President Hu wants this to be better, just as President Obama does—the military-to-military relationship. I mean, I can say that my meeting with General Liang in Hanoi was very cordial and I expect this to be a good visit, so in terms of the sort of the ins and outs of internal politics, I just don't know.

I think that, you know, speaking in broad terms, I think one of our goals is to see if we can get out ahead of these periodic provocations by the North Koreans and bring greater stability to the peninsula. We both have—we have a mutual interest in that. And I think that the one topic for both my visit and for President Hu's meetings with the president is how can we work together to prevent further provocations, bring greater stability, and then see if we can move forward with North Korean denuclearization and some of the other things that they could do that would open the way for further progress.

Q.—policy change on either side? I think on a real—(inaudible)—going to break this cycle that's been going on for the last however many years. Why should anyone expect any kind of breakthroughs on this trip?

Secretary Gates. Well, I'm—I think that this is evolutionary and particularly the military-to-military side, and so rather than something dramatic—some kind of a dramatic breakthrough, I think just getting some things started would be a positive outcome.

Q.—quoted in the WikiLeaks cables here —documents as saying that, you know, it's very hard to get tough with your banker. Do you—talking about China. Do you have—is that—would you agree overall with that and because the Chinese have said that in some quarters they see us as a declining power because of our financial crisis, does that change the nature of the talks with the Chinese from 2007 to now?

Secretary Gates. Certainly not from my standpoint. My—I make the broader point with people because I've watched this sort of cyclical view of American decline come around two or three times, perhaps most dramatically in the latter half of the 1970s. And my general line for those both at home and around the world who think the U.S. is in decline—that history's dustbin is filled with countries that underestimated the resilience of the United States. And I think that—I mean, the economic relationship between the United States and China is mutually beneficial. It's not a one-way street. And so I think both countries have an interest in keeping that stable and going forward. So I—that kind of thing doesn't—you know, the—that kind of thing really doesn't much enter into in my thinking.

Q. Mr. Secretary, would you consider the sale of U.S. helicopters—non-military variety of helicopters to China if they asked?

Secretary Gates. That's the first I've ever heard of it, so I would have to—

Q. They've said they want to buy certain kinds of dual-use helicopters—.

Secretary Gates. I'd have to look at it. I just—I don't want to answer just off the top of my head.

Q. Secretary, considering the revelations recently about the new ballistic missile that the Chinese are developing faster than American—the U.S. intelligence thought and the stealth fighter photos which have come out, does this—first of all, does this lend any additional urgency to your visit? Are you particularly concerned about that? And secondly, are you doing anything to address the possible—or checking to possible intelligence lapses that allowed them to get further than expected?

Secretary Gates. Well, I think, first of all, we've been watching these developments all along. I've been concerned about the development of the anti-ship cruise and ballistic missiles ever since I took this job. I would—we knew they were working on a stealth aircraft. I think that what we've seen is that they may be somewhat further ahead in the development of that aircraft than our intelligence had earlier predicted.

The one statement that I would make in terms of—I never said—as somebody quoted me—that their stealth aircraft didn't matter. What I said was that in 2020 or 2025 that there would still be a vast disparity in the number of deployed fifth generation aircraft that the United States had compared to anybody else in the world. And I continue to stand by that statement even with some of the program changes that we've made in the Joint Strike Fighter.

And so these are matters of concern, and frankly if you go back and look very carefully at that egregiously long statement from last Thursday, you will notice that there—some of these higher priority areas for investment are focused on some of these anti-access programs.

Q. Let me just clarify what you said. You said the intel on the stealth fighter was—that they were (inaudible) ahead of that, faster than you thought?

Secretary Gates. Somewhat.

Well, I've heard it. I'd seen it about the stealth, but not—about the aircraft but not the missiles.

Q. Mr. Secretary, the last time that you were here, you talked very specifically about transparency with the Chinese. Is that something that you'll be pushing again soon?

Secretary Gates. Well, I think that becomes—my hope would be that that would be part of the strategic dialogue, that as the two countries begin to talk about strategy and policies and so on that intentions will become more transparent. And I think that would be helpful.

Q. Do you believe that this stealth fighter once and for all. There's a lot of talk about whether or not it actually is a stealth—(inaudible).

Secretary Gates. I think there is some question about just how stealthy.

Q. What are the concerns you have about the development of these capabilities?

Secretary Gates. They clearly have the potential to put some of our capabilities at risk and we have to pay attention to them, we have to respond appropriately with our own programs. My hope is that through the strategic dialogue that I'm talking about that maybe the need for some of these capabilities is reduced.

Secretary Robert Gates delivered these remarks with General Liang Guanglie in Beijing, China

General Liang. Good morning friends from the press. At my invitation, U.S. Secretary of Defense Mr. Robert Gates is visiting China from 9–12 of this month. Just now we had a very extensive and in depth and candid exchange of views in our meeting on China and U.S. state-to-state and military-to-military relations and also other issues of mutual interest. We reached important consensus in the meeting. The talks which were held in a friendly atmosphere were positive, constructive and productive.

We both affirmed that a healthy and stable China-U.S. military-to-military relationship is an essential part of President Hu Jintao and President Obama's shared vision for a positive, cooperative and comprehensive bilateral relationship in the 21st century. Both sides look forward to President Hu Jintao's upcoming state visit to the United States and agreed that sustained and reliable military to military contacts will help reduce misunderstanding and miscalculation. Both sides agreed that the Defense Consultative Talks or DCT, Defense Policy Coordination Talks or the DPCT, and discussions under the Military Maritime Consultative Agreement [MMCA] will remain important channels of dialogue in the future.

Both sides concurred that a healthy and stable U.S. military-to-military relationship is in our common interest. We both recognize enhancing and maintaining dialogue and communication at all levels is of great significance to the development of military to military relations. That both sides share the responsibility and obligation to take effective measures to respect each other's sovereignty, security and territorial integrity to foster and bolster strategic mutual trust, to consolidate and expand mutual interests and to prevent misunderstanding and miscalculation.

We both attach importance to the priority areas for military-to-military relations that General Xu Caihou, Vice Chairman of the Central Military Commission, and Secretary Robert Gates agreed on during General Xu's visit to U.S. in October of 2009. We affirmed that planned exchanges will be conducted in such areas as high level visits, institutionalized exchange programs and military education.

At the invitation of Admiral Mullen, Chairman of the U.S. Joint Chiefs of Staff, General Chen Bingde, member of the Central Military Commission and Chief of the PLA [People's Liberation Army] General Staff, will visit the United States at an appropriate time in the first half of 2011. The two militaries will also conduct cooperation in non-traditional security areas including counterterrorism, peacekeeping, counter-piracy, humanitarian assistance and disaster relief. The two sides agreed to hold the MMCA working group meeting in the first half of 2011 and the DPCT as early as possible, also in the first half of the year. We agreed to establish a joint working group which will meet in 2011 to discuss the guiding principles and framework for mil to mil relations and produce mutually agreed documents in due course.

In the meeting we also had in depth exchanges of ideas on regional security interests of common interest including the situation on the Korean peninsula.

I'm satisfied with the outcome of the meeting and I stand ready to work together with Secretary Gates by following the principles of mutual respect, mutual trust, reciprocity and mutual benefit to strengthen our dialogues and communication, to promote understanding and trust and expand consensus and exchanges and contacts so as to make sure the mil-to-mil relationships between China and the United States will progress in a sound and steady manner.

Thank you all.

Secretary Gates. Good afternoon. It is a pleasure to be back in Beijing. I'd like to thank the government and people of China for their gracious hospitality, which I've greatly enjoyed since my first visit almost 30 years ago. Much has changed since then.

I also want to thank General Liang for his hospitality. He and I had a great deal to discuss in our meetings earlier today. Both President Obama and President Hu have stressed that building a sustained and reliable relationship between our two militaries is an indispensible part of strengthening our two nations’ broader relationship—a relationship that consists of deepening economic and cultural ties that touch the lives of virtually all our citizens.

Among these are: improving maritime security; addressing the challenges posed by the spread of nuclear-, space-, cyber-, and missile technology; maintaining peace and security on the Korean Peninsula by facilitating engagement between the two Koreas and towards the denuclearization of the Korean Peninsula; preventing Iran from obtaining a nuclear weapon by continuing to work through the dual-track approach; and finally, continuing to cooperate generally to diffuse global conflicts and tensions.

I've stressed several times the importance of maintaining an ongoing military-to-military dialogue between the United States and the People's Republic of China. Mechanisms such as the Defense Consultative Talks, the Defense Policy Coordination Talks, and the Military Maritime Consultative Agreement can serve as important channels of communication in this regard.

As General Liang mentioned in his statement, we have agreed to pursue now seven priority areas of cooperation which were agreed to in October 2009. The general and I have also agreed to establish a working group that will develop a new framework for improving ties between the U.S. and Chinese military establishments. This group will meet several times during the coming year, and will present the framework during the 2011 Defense Consultative Talks. We also agreed to hold working group meetings under the Military Maritime Consultative Agreement to discuss future operational safety and to build cooperation in the maritime domain.

As General Liang mentioned in his statement, we agreed to look into a number of joint military activities ranging from maritime search and rescue to humanitarian assistance and disaster relief, counter-piracy, counterterrorism, and more. Not only will joint exercises improve certain key capabilities on both sides they also will lead to safer practices for our sea and air forces, and, over time, cultivate trust and lead to more opportunities for defense cooperation. We are in strong agreement. In order to reduce the chances of miscommunication, misunderstanding, or miscalculation, it is important that our military-to-military ties are solid, consistent, and not subject to shifting political winds.

Finally, I was pleased that General Liang noted and said that the Chinese side would consider and study the beginning of a strategic security dialogue—as part of a broader Strategic and Economic Dialogue—that covers nuclear, missile defense, space, and cyber issues.

Cultivating personal relationships can be an important part of improving understanding and cooperation. In that vein, Admiral Mullen and I will be pleased to welcome the Chief of the General Staff of the PLA to visit the United States in the first half of this year. And, of course, we are very much looking forward to President Hu's state visit to Washington next week.

The next two days will provide further opportunities for dialogue with my Chinese colleagues. They include: meetings later today with Vice President Xi, the Vice Chairmen of the Central Military Commission followed by an official banquet tonight; discussions with the Minister of Foreign Affairs and with President Hu Jintao tomorrow; and on Wednesday, a visit to the PLA's Second Artillery Corps, the latter providing a key opportunity to advance our discussion of nuclear strategy.

China and the United States are two of the world's great powers and we both recognize the responsibilities and opportunities that status entails—including showing the rest of the world the benefits that arise when great nations cooperate on matters of shared interests. Our two nations now have an extraordinary opportunity to define the relationship not by the obstacles that at times divide us, but by the opportunities that exist to foster greater cooperation and bring us closer together.

Thank you.

Q. Secretary Gates said a moment ago that your military-military relations would no longer be subject to political whims. Does that mean that you have agreed that future talks will not be called off if for example the U.S. were to make another large arms sale to Taiwan? And, Secretary Gates, you said in June that you thought the senior Chinese political leadership was more committed to the idea of a stable military-military relationship than the PLA itself was. Here among the PLA today do you believe that there has been a change of heart?

General Liang. Your question touches upon U.S. arms sales to Taiwan. On that, China's position has been clear and consistent—we are against it. Because United States arms sales to Taiwan seriously damaged China's core interests and we do not want to see that happen again, neither do we hope that the U.S. arms sales to Taiwan will again and further disrupt our bilateral and military-to-military relationship.

At my invitation, Secretary Gates is visiting China and having a productive meeting with me. He himself, I think, places great value on the development of military-to-military relations and it is the same case with the Chinese side. In our meeting we discussed not only the positive elements, the positive product in the development of our military to military relations, we also talked about difficulties and obstacles in the development of our military-to-military relations and the meeting was conducted in a very candid manner. And I believe this way has helped lay down a very solid foundation for the settlement of our differences and the future progress of our mil-to-mil relations. I think in the future, as long as we work together in following the shared vision of President Hu and President Obama in building up more positive mil-to-mil relations, while at the same time working together to appropriately handle our differences, I'm sure that the mil-to-mil relations will obtain a more positive development in the future.

At the same time, what I want to emphasize here is that we also hope the United States will pay sufficient attention to the concerns of the Chinese side and take measures to gradually remove or reduce the obstacles that stand in the way of our mil-to-mil relations.

Secretary Gates. I would say that I spent a little over two hours in meetings with General Liang and his colleagues this morning. I would agree with his characterization of the meeting as positive, constructive and friendly. It was also candid. This follows onto a very productive meeting that General Ma had with Under Secretary Flournoy in Washington in December. I am confident on the basis of the meetings in December and my meetings here today that we are on the road to fulfilling the mandate that our two Presidents have given us: to strengthen the military-to-military relationships that they both consider an underdeveloped part of the overall U.S.-China relationship. So I come out away from the meeting this morning optimistic and confident that the leadership of the PLA is as committed to fulfilling the mandate of our two presidents as I am.

Q. I'm with Xinhua and my question goes to Secretary Gates. Recently we observed that the U.S. military has been very active in East Asia, including the conducting of combined exercises in the Yellow Sea. It has also been reported recently that three aircraft carriers are gathering in East Asia. My question is: what is the United States’ strategic intention in this region and whether you have had good communications or cooperation with China in this aspect.

Secretary Gates. As I told General Liang this morning, our exercises have not been directed in any way at China. Rather they have been the result of our growing concern over the provocative behavior of North Korea. Our efforts have been directed at deterring further provocations on the part of North Korea. Because of the danger of creating instability and escalating military activity in the region, this is an area where I believe the U.S. and China actually have worked cooperatively and we acknowledge and appreciate China's constructive actions late last fall in terms of trying to tamp down tensions on the Peninsula. But that is a major concern of ours and clearly a major topic of discussion on my visit here to Beijing.

Q. Question for Defense Minister Liang. It is generally recognized that a country of China's stature should obviously have a powerful military. That said, China is in the process of developing some weapon systems that have caused concern in the United States. I am speaking specifically about the anti-ship ballistic missiles also about anti-satellite capabilities and also about your stealth fighter. The question I have is: is China while it is trying to improve relations with the U.S. military also engaged in a nascent arms buildup to counter American influence in Asia?

Secretary Gates, my question is: yesterday you said that the U.S. is responding to China's buildup of these weapon systems by also increasing its anti-access capabilities. For example, the deep strike bomber. Also, increased satellite capabilities and radar enhancements. Is the United States responding to China's perhaps beefing up and in itself also engaging in a weapons race with China?

General Liang. Indeed, in recent years the development of China's military force has been a very popular topic in the international press. Actually with the growth of economic power and the comprehensive national power of China, the military development has made some progress in recent years. This is for the protection of the security interests of China. In doing so, we have developed indigenously some weapon systems. In the parade that we staged in commemoration of the founding of the People's Republic of China two years ago, we have demonstrated those newly developed weapons systems to the outside world. However, at the same time, I also firmly believe that in terms of the level of modernization of the PLA, we can by no means call ourselves an advanced military force. The gap between us and that of advanced countries is at least two to three decades. And the efforts that we have put into research and development of our weapons systems are for the fulfilment of our mission to protect the sovereignty, security, and interests of national development of the country. After all, we shall never underestimate the complexity of the security situation that China as a country is faced with.

That said, I also want to emphasize that the efforts that we placed in research and development of our weapons systems is by no means targeted at any third country and it will by no means threaten any other country in the world. I do not agree, or rather I oppose, that there are some people always in the world that always want to label China's military development as a so-called military threat to the world. I hope that friends from other countries would make, and come up with, a more precise assessment and more reasonable conclusion when we look at the development of China's military. Thank you.

Secretary Gates. I think that your question again goes to the importance of the proposal that I have made for an in-depth strategic dialogue between the United States and China, between our two militaries. The mechanisms that we have already agreed to continue with, and the new framework that General Liang and I have talked about that will be developed and implemented this year, I think are an important step forward in terms of a greater understanding of each other's intentions, each other's policies, each other's strategy. I think that kind of a dialogue, really focused on the areas that I have talked about—nuclear, missile defense, space, and cyber—all create an environment in which the chances of a miscalculation or a misunderstanding are significantly reduced. In the meantime, I think that greater openness and transparency between us through this enhanced dialogue—both the existing mechanisms that we have and the ones that we are talking about developing—are all important to ensure that we have a clear understanding of each other's intentions as well as our strategy.

General Liang. Let me make some additional comments on the issue raised by Secretary Gates on the Strategic Security Dialogue. There exists quite a number of forms of dialogue between China and the United States. For example, in the economic field, we have had a well-established mechanism and identified a leadership to lead and co-chair the economic dialogues between the two countries. As for the dialogues between the two militaries, every year the two militaries will hold the annual Defense Consultative Talks and I believe this is one form of the dialogues at the strategic level between the two sides. The Chinese side noticed the proposal of Secretary Gates on the conducting of the Strategic Security Dialogue and we are studying that.

Q. From China Radio International. My question goes to Secretary Gates. It has been reported that Pentagon has decided to sell 226 Army tactical missiles to Taiwan. Can you confirm that report and also how does the U.S. side perceive, or look at, the impact of U.S. arms sales to Taiwan on the development of China-U.S. mil-to-mil relations?

Secretary Gates. Well, first of all, clearly it goes without saying the sales have created difficulties between us in the past. If I am correct, the sale that you refer to was actually made under my previous boss, President Bush, in 2008 and announced at that time and the missiles being referred to are air defense missiles, so strictly on the defensive side. They are not tactical surface-to-surface missiles.

Secretary Robert Gates delivered these remarks at the Great Wall of China

Secretary Gates. Thank you all—. I've had a really good week here in China, a few days, good meetings. The hospitality could not have been warmer. I think that the discussions were very productive and set the stage for taking the military-to-military relationship to the next level.

I had a good visit to the 2nd Artillery Corps this morning, very candid conversations. I invited General Jiang to visit STRATCOM and he has accepted and we will work that out. And I think this is part of the step-by-step process of building this relationship. And it seems entirely fitting that it end in an extraordinary place like this. I was last at the wall in 1980. It still is awesome as then, although it hasn't changed much, but it seems a great and fitting end to what I consider a very successful visit.

Q. Mr. Secretary, did you receive any assurances or learn anything about China's nuclear strategic intents or strategy in general?

Secretary Gates. There was a discussion of nuclear strategy and the—their overall approach to conflict. We talked about their no-first-use policy. We talked about command and control. So I felt like—and several other subjects, so I felt like it was a pretty wide ranging conversation, pretty open.

Q. Mr. Secretary, at the beginning of this trip you signaled the priority of building weapons that could be used against China for anti-access. At the end of the trip you signaled your concern at the possible rift between the PLA and the civilian leadership. So how is it successful in terms of building confidence between China and the U.S.?

Secretary Gates. Well, I don't think I've talked about a rift as much as I did the fact—the simple fact, as was communicated, that the civilian leadership seemed surprised by the test and assured me that it had nothing to do with my visit.

What came across to me is that both the civilian and the military leadership seemed determined to carry this relationship further and build upon it. Are there those who have issues with it? Possibly, but I certainly didn't meet them on my trip. And I'm very encouraged going forward.

Q. Mr. Secretary, now you're heading to your ally, Japan. Japan and the U.S. have planned to issue a joint vision this spring, I believe. To what extent does the Okinawa basing issue has to proceed to make that vision come true?

Secretary Gates. Well, I think they're independent. Obviously we want to see these decisions implemented, but it has been I think since 2005 since there was a joint vision statement and a lot's happened in the last six years, including the fact that we have a new president and Japan has a new government and a lot has happened in the world in the last six years. So I think it's timely to look at the alliance and update it, if you will, going forward. But the alliance, the one thing that continues is the strength of the alliance.

Okay. Thank you.

Secretary Hillary Clinton delivered these remarks in Washington, DC

Q. Madam Secretary, thanks for joining us this morning. The White House is really rolling out the red carpet for President Hu, but I think a lot of Americans, especially those having trouble in the job market, are having a hard time figuring out how to think about China. Are they friend or foe, ally or adversary?

Secretary Clinton. George, one of the reasons why we are rolling out the red carpet and having President Hu Jintao come for a state visit is because we think that we'll be able better to answer such a question as we move forward. And my hope is—

Q. You don't know yet?

Secretary Clinton. Well, my hope is that we have a normal relationship, a very positive, cooperative, comprehensive relationship, where in some areas we are going to compete—there's no doubt about that—but in many areas we're going to cooperate. And we've seen that pattern in the last two years and it's a pattern that I think reflects the reality and the complexity of our relationship.

Q. It's tough competition on the economic front especially. Your senior senator in New York, Chuck Schumer, has said America is getting fed up with the way China is manipulating its currency, closing down its markets, and he says that at times they are seeking unfair economic advantage. He's actually proposed legislation that would sanction them, have tariffs if they don't stop manipulating their currency. Can you see a point where the Administration would get behind something like that?

Secretary Clinton. Well, George, let me say first that I think Americans need to put this relationship into perspective. Our economy is about three times the size of the Chinese economy, where they have four times the number of people. So our standard of living is much higher, our innovation, our creativity—all of that is really to America's advantage.

They have a huge labor market. They have lower costs. And they are going to be a really tough competitor. And what we're looking for is a competition where nobody's got their thumb or their fist on the scale. So—

Q. That's the way it is right now, though.

Secretary Clinton. No—we agree. That's why we continue to raise issues of currency, of what they call indigenous innovation, which could be a disadvantage for our firms; of the failure to protect intellectual property, which is really our bread and butter because we are at the forefront of creating intellectual property.

So we are very clear in raising a lot of these issues. We do it continuously. We will be doing it during this visit. And we see small steps. I think it's important to realize that we're going to stand up for our values and our interests and our security. They're going to stand up for theirs as they see it.

So part of what this dialogue is about is making sure that there's no doubt in the Chinese mind that we think it's in our interest, but it's also in their interest, to have a freer market economy, to create more indigenous innovation, if you will, but not at the disadvantage of American creativity, intellectual property, and businesses.

So this is an ongoing discussion. We're not going to be able to change their behavior overnight. But we think as they continue to develop, if we can create some bilateral trust, they will begin to see that a more open economy is actually in their interest, and that will advantage America.

Q. We also have to see on the issue of security whether they're going to do more to crack down on the North Korean nuclear program and stop undermining efforts to stop the Iranians from building nuclear weapons. Are we seeing any progress there, because it doesn't seem like it from the outside?

Secretary Clinton. Well, I think I see it a little differently. On Iran, for example, China joined with us in the tough sanctions. The Israelis just said about a week or so ago that they see a slowdown in the Iranian program. We believe that sanctions have had an impact. In North Korea, they also joined with us on sanctions.

So I think you have to look at the steps that we have taken to date and the fact that we need to be doing more. We are still—

Q. You don't believe they're undermining the sanctions in Iran?

Secretary Clinton. We think that there are some entities within China that we have brought to the attention of the Chinese leadership that are still not as, shall we say, as in compliance as we would like them to be. And we are pushing very hard on that and we may be proposing more unilateral sanctions.

Now, the Chinese response is they are enforcing the sanctions they agreed to in the Security Council; they did not agree to either European, American, or Japanese sanctions that were imposed unilaterally. Our response to that is, look, we share the same goal, we need to prevent Iran from becoming a nuclear weapons state; so therefore, even though technically you did not sign up to our unilateral sanctions, we expect you to help us implement them. Because what is the alternative? Some kind of conflict in the Persian Gulf which would disrupt oil supplies, which would have a terrible impact on your economy? So it's that kind of very clear-eyed, realistic discussion that we are having. And I think that we've made progress, we have a ways to go.

And similarly with North Korea, we have the same goal—the Chinese and the U.S.: We want a denuclearized, peaceful, stable Korean Peninsula. The Chinese have, obviously, many more years of experience in dealing with the North Koreans. They are very straightforward in saying here's what we think you, South Korea, and Japan need to do to try to change their behavior. Well, we are exploring their recommendations and we are giving our own recommendations. But we're engaged in a very intense discussion about this.

President Barack Obama and President Hu Jintao delivered these remarks in Washington, DC

President Obama. Good morning, everyone. President Hu, members of the Chinese delegation, on behalf of Michelle and myself, welcome to the White House. And on behalf of the American people, welcome to the United States.

Three decades ago, on a January day like this, another American President stood here and welcomed another Chinese leader for the historic normalization of relations between the United States and the People's Republic of China. On that day, Deng Xiaoping spoke of the great possibilities of cooperation between our two nations.

Looking back on that winter day in 1979, it is now clear. The previous 30 years had been a time of estrangement for our two countries. The 30 years since have been a time of growing exchanges and understanding. And with this visit we can lay the foundation for the next 30 years.

At a time when some doubt the benefits of cooperation between the United States and China, this visit is also a chance to demonstrate a simple truth. We have an enormous stake in each other's success. In an interconnected world, in a global economy, nations—including our own—will be more prosperous and more secure when we work together.

The United States welcomes China's rise as a strong, prosperous and successful member of the community of nations. Indeed, China's success has brought with it economic benefits for our people as well as yours, and our cooperation on a range of issues has helped advance stability in the Asia Pacific and in the world.

We also know this: History shows that societies are more harmonious, nations are more successful, and the world is more just, when the rights and responsibilities of all nations and all people are upheld, including the universal rights of every human being.

Mr. President, we can learn from our people. Chinese and American students and educators, business people, tourists, researchers and scientists, including Chinese Americans who are here today —they work together and make progress together every single day. They know that even as our nations compete in some areas, we can cooperate in so many others, in a spirit of mutual respect, for our mutual benefit.

What Deng Xiaoping said long ago remains true today. There are still great possibilities for cooperation between our countries. President Hu, members of the Chinese delegation, let us seize these possibilities together. Welcome to the United States of America. Hwan-ying.

President Hu. Mr. President, Mrs. Obama, ladies and gentlemen, dear friends, it gives me great pleasure to come to Washington and pay a state visit to the United States at the beginning of the new year, at the invitation of President Obama. At this point in time, let me extend, on behalf of the 1.3 billion Chinese people, sincere greetings and best wishes to the people of the United States.

I have come to the United States to increase mutual trust, enhance friendship, deepen cooperation, and push forward the positive, cooperative, and comprehensive China-U.S. relationship for the 21st century.

Over the past 32 years, since the establishment of diplomatic ties, the China-U.S. relationship has grown into one with strategic significance and global influence. Since President Obama took office, with concerted efforts of the two sides, our cooperation in various fields has produced fruitful results and our relations have achieved new progress. This has brought real benefits to our two peoples, and contributed greatly to world peace and development.

As we enter the second decade of the 21st century, the people of both China and the United States want to see further progress in our relations and people around the globe want to see greater prosperity in the world. Under the new circumstances, and in the face of new challenges, China and the United States share broad common interests and important common responsibilities.

We should adopt a long-term perspective, seek common ground while resolving differences, and work together to achieve sustained, sound, and steady development of our relations. I hope that through this visit, our two countries will advance the positive, cooperative, and comprehensive relationship, and open a new chapter in our cooperation as partners.

Our cooperation as partners should be based on mutual respect. We live in an increasingly diverse and colorful world. China and the United States should respect each other's choice of development path and each other's core interests. We should deepen mutual understanding through communication, increase mutual trust through dialogue, and expand common ground through exchanges.

Our cooperation as partners should be based on mutual benefit. China's future and destiny are increasingly tied to those of the world and China-U.S. relations have become closer. Our two countries should seek to learn from each other through exchanges and achieve win-win progress through cooperation. This is the right approach for us to develop our relations.

Our cooperation as partners should be based on joint efforts to meet challenges. China and the United States should step up communication and coordination in international affairs, work together to counter the global challenges, and make a greater contribution to world peace and development.

Our cooperation as partners should be based on the extensive involvement of the people. The Chinese and American people cherish deep friendship towards each other, and they fought side by side at defining moments in history when the future and the destiny of mankind were at stake. The two peoples should extend exchanges and enhance friendship. This will offer a inexhaustible driving force for the growth of our relations.

Ladies and gentlemen, our world today is undergoing major development, major changes and major adjustments. To pursue peace, development and cooperation is the irresistible trend of our time. Let us seize the opportunity to forge ahead, hand in hand, and work together to enhance cooperation as partners, and let us work with all other countries to build a harmonious world of lasting peace and common prosperity.

Thank you once again, Mr. President, for your warm welcome.

President Obama. Thank you very much. Thank you.

Secretary Hillary Clinton delivered these remarks in Washington, DC

Secretary Clinton. For two years, the Obama administration has made it a priority to strengthen the bonds between the United States and China. We have worked to extend mutual understanding and interests beyond national governments to individuals, businesses, and state and provincial governments.

Individual U.S. governors have been reaching out to China for years, including at least eight who led trade delegations there in 2010. Chinese provincial leaders have made over 100 visits to America last year alone. There are already 36 sister provinces and states. Each has potential to bring significant benefits to people on both sides, and in some cases, they already have.

That is why we support the National Governors Association and the Chinese People's Association for Friendship with Foreign Countries in creating the Governor's Forum, which is designed to help states build their own successful partnerships. Governors will share ideas, connect people and businesses, and then sustain and deepen these connections through regular meetings. Our states and provinces can be laboratories that generate solutions. We can help each other grow trade and investment, create jobs, educate our children, and solve the problems we all share.

This agreement is a recognition by our governments that we want more cooperation on a sub-national level because the United States and China face many similar challenges and opportunities. I congratulate China's leaders and those in our own government who are committed to this important aspect of our relations. You are not only creating new opportunities for the people of your states and provinces—you are laying the ground-work for closer ties between our nations for many years to come.

President Barack Obama and Prime Minister Julia Gillard delivered these remarks in Washington, DC

President Obama. Well, I just want to provide a hearty welcome to Prime Minister Gillard, who I had a chance to meet during the ASEAN summit and the G20 summit, and was immediately charmed, as I'm sure at least a good chunk of the Australian people are.

We have no stronger ally than Australia. And as we celebrate the 60th anniversary of our alliance I think it's especially appropriate to have Prime Minister Gillard here.

I understand that you'll be speaking to a joint session of Congress, which is a high honor that is reserved for only our closest friends, and I think it's a measure of the degree to which Australians are held in such high esteem by Americans—partly because we share so much. Not only do we share a language, a commitment to democracy, a set of shared values, but I think there's also a shared sense of open spaces and a pioneer spirit. And as Prime Minister Gillard said the first time we met, it's what makes us “great mates.”

We've had a very useful discussion about a wide range of issues. We began by me once again expressing on behalf of all the people of the United States our deepest condolences for those families that were affected by the terrible floods recently. We want to commend Prime Minister Gillard and her government and all the personnel who were involved for their timely response at what is I know a very difficult time. And once again we want to pledge any support that we can provide to the Australian people in this moment of hardship.

We also talked about a wide range of international issues. I'll be traveling this year to Asia once again for the East Asia summit, and we'll be hosting in Honolulu the APEC summit. Australia and the United States have a shared interest in expanding trade in the Pacific region, in promoting clean energy, in making sure that we don't have regulatory barriers that prevent our businesses from working across our borders. And so we're very excited about the prospect of joining forces with Australia and other countries to promote growth and employees in the region.

We had a good discussion about security. And I want to once again thank the Australian people and the military families who are making such extraordinary sacrifices in Afghanistan. It is not easy. Australia is our largest non-NATO coalition member making an extraordinary contribution day in and day out. And I want to personally thank Prime Minister Gillard for her strong endorsement of our efforts there. And we discussed the fact that 2011 is going to be a year of transition in which we, more and more, provide the assistance necessary for Afghans to take the lead in that effort.

And we had a discussion about the situation in the Middle East. And I think Prime Minister Gillard and I both share a very firm conviction that the violence that's been taking place and perpetrated by the government in Libya is unacceptable. Australia joined with us in imposing swift and firm sanctions, comprehensive sanctions, against the Libyan government. We continue to monitor the violence there.

I want to send a very clear message to those who are around Colonel Qaddafi: It is their choice to make how they operate moving forward, and they will be held accountable for whatever violence continues to take place there.

In the meantime, we've got NATO, as we speak, consulting in Brussels around a wide range of potential options, including potential military options, in response to the violence that continues to take place inside of Libya. In addition, we have taken the lead on a host of humanitarian efforts, and I just authorized an additional $15 million that will be provided to aid organizations that are already on the ground. And we've been coordinating with the United Nations, which now has a number of personnel on the ground as well, to make sure that people are getting the help they need and we are in a position to respond to any additional emergencies that may arise out of the situation there.

But the bottom line is I think Australia and the United States stand shoulder to shoulder in sending a clear message that we stand for democracy, we stand for an observance of human rights, and that we send a very clear message to the Libyan people that we will stand with them in the face of unwarranted violence and the continuing suppression of democratic ideals that we've seen there.

So, because of these shared values, because of the deep and longstanding relationship between our two countries, it is an extraordinary pleasure to have Prime Minister Gillard here. And I have to say that from a distance at least, she is doing an outstanding job; is a very quick study. And we look forward to —since she's a former minister of education—visiting a school here in Washington, D.C., where we expect the smart students over there to ask all kinds of difficult questions. But I know that Prime Minister Gillard will have good answer for them. So thank you very much. Welcome.

Prime Minister Gillard. Can I say thank you to President Obama. I am moderately terrified about how complicated these questions from students could be, but I'm looking forward to visiting a school with you.

I did want to start by saying thank you very much for the warmth of your welcome here. And I am very delighted to be addressing Congress. I know this is an honor for Australia and something that we're very, very pleased and grateful for. So thank you very much for that.

We've been talking today about the friendship between our two countries, about being great mates, talking about the 60th anniversary of our alliance. And as I've said to President Obama, I view it as 60 years young. There is so much more to do together in the future, including cooperating as America looks at its force posture, including cooperating in our region at the East Asia summit and beyond.

I've talked to President Obama today about preparations for the G20, about its continuing importance in keeping a focus on growth and on jobs for the future. And we've talked about the importance of trade, both the Trans-Pacific Partnership, where under President Obama's leadership we are hoping at APEC to see major progress, and also the Doha Round, where we are hoping to see major progress this year.

We've had the opportunity to talk about the fight in Afghanistan. It is hard, but it's something that I am very personally committed to, to seeing the mission done and to ensuring we play our part in training the Afghan national army and bringing security to Afghanistan so that the Afghan people can lead their own security. So we've had the opportunity to talk about transition today as well as events in the Middle East, as the President has outlined.

So it's been a very great pleasure to be here. Thank you very much for these discussions, and I know we'll cross the full range of economic discussions, of military discussions, defense cooperation, the mission in Afghanistan, public policy issues which our nation share—education, which we'll have the opportunity to talk about at the school; climate change. We will be continuing to work together very strongly for the future.

Thank you.

Secretary Hillary Clinton delivered these remarks in Washington, DC

Secretary Clinton. Thank you all very much. Good morning. I appreciate Mike Froman's introduction and his brief summary of all of the reasons why President Obama and the Obama Administration are committed to the region and committed to APEC.

And I'm delighted to be here today, and I want to thank all of our guests for joining us, including members of Congress and the business community, in particular the members of the APEC Host Committee who are working to expand a public-public collaboration throughout our activities. And let me also extend a very warm welcome to senior officials and other representatives from APEC's member countries.

It is exciting for the United States to serve as the host of APEC for 2011. This has been in preparation for many months. We hope our time together here in Washington and in Montana, California, and Hawaii later this year, will yield real and lasting benefits for all of our people, because after all, we meet at a moment of fast and far-reaching change. The transformations that many of our economies have experienced in recent years have remade our region and our world. Hundreds of millions of people have climbed out of poverty. Places that were once largely removed from the global economy are now crackling with commerce. And this progress is a testament to the talent and ingenuity of people across this region. And it is also a testament to the power of economic integration.

The rise in prosperity and decline in poverty occurring throughout the Asia Pacific region are a direct result of greater trade and investment. These are goals that we have pursued and achieved together. And the United States is proud of the role that we have played in this region's progress as a trade and investment partner to many APEC economies, a market for your goods and services, and a leading proponent of an open and liberalized approach to shared economic activities.

Now, there's no question that this approach has paid off, but growth has also given rise to new challenges. Food and fuel prices have climbed. Greenhouse gas emissions and the consumption of natural resources, leading to environmental consequences, are there for all to see. Meanwhile, growth has shifted the geo-political order of our region and the world as new centers of influence have emerged and new dynamics have developed between and among our nations.

All told, these trends add up to a sense of possibility about the positive developments of the future, but also a sense of anxiety, because that future is far from certain. I have said many times before that much of the history of the 21st century will be written in the Asia-Pacific region. And it is a history that we writing together.

Every economy represented here is hard at work creating jobs, addressing the social and environmental consequences of growth, and laying the groundwork for long-term prosperity. Now of course, there will be differences in how our countries pursue these common goals. But I believe strongly we must pursue them in partnership—through more and better trade, investment, and collaborations in science, technology, and education—if we wish to continue the progress that has already begun.

That means we must decide how we will work together, what rules we will adopt, what principles we will abide by, and what behavior we will encourage and discourage in ourselves and in each other. These are open questions that deserve the most careful analysis because we are called upon to answer them as individual economies and as an economic community. APEC provides a forum for reaching those answers.

The United States brings to APEC a deep commitment to this region's stability and prosperity. Since the earliest days of the Obama Administration, we have been working to strengthen our one-on-one relationships and to galvanize more effective regional cooperation on shared challenges. We have affirmed and deepened our alliances with Japan, South Korea, Australia, Thailand, and the Philippines. We have increased our engagement with old friends and new partners, including India, Indonesia, Vietnam, New Zealand, Mongolia and Malaysia. We have launched a strategic and economic dialogue with China to build greater trust between our governments and to coordinate policy on consequential issues facing both of our nations. And our relationships with the APEC economies of the Americas—Canada, Mexico, Chile and Peru—have never been stronger.

We have also significantly increased our participation in Asian regional organizations. That includes ASEAN. In the past two years, we established a U.S. mission to ASEAN, signed the Treaty of Amity and Cooperation and held two U.S.-ASEAN summits. We have also stepped up our engagement with the East Asia Summit. I attended the summit in Vietnam in October on behalf of the United States, the first time our country has ever participated. And President Obama will attend the summit later this year in Indonesia.

We view these institutions as pillars of a strong and effective regional architecture, which can help us work together to manage urgent strategic security and political issues. APEC has an important role to play in that architecture as the leading forum for designing economic policies that promote regional growth and prosperity.

Together, these actions by the United States comprise a strategy that I call “forward-deployed diplomacy.” It reflects our belief that the security and prosperity of the Asia-Pacific region is critical to the security and prosperity of the United States and the rest of the world. And furthermore, as a Pacific nation and a Pacific power, the United States has a responsibility to help lead in meeting these challenges and making the most of the opportunities we face today. So the United States comes to APEC as the largest economy in the world, with a long tradition of innovation, whose people have built businesses and invented technologies that have improved billions of lives.

Now it is true that our economy, like many worldwide, has suffered in recent years. And we are working overtime to undo the effects of recession, to create jobs, strengthen global economic norms and increase our trade and investment ties with other countries. Some have questioned whether the United States will emerge from this period as strong as we were before. Well, I am very bullish about our future, and so are millions of Americans who know that our brightest days, as it always is true in America, are still ahead of us. We will continue to lead in driving growth and innovation, just as we have in the past.

And a key element of our success will be how we manage our economic engagement in Asia. We recognize it as the most dynamic region in the world today. And although APEC is comprised of just 21 economies, together we generate more than half of global output and nearly half of global trade. Six out of ten of the largest trading partners of the United States are in the region, and our exports to this region are growing much faster than those to any other part of the world.

As we strive to meet President Obama's goal of doubling exports in the next five years, we are looking to this region, to our partners in APEC, for opportunities to do more business. And I know that every economy here is doing the same. That is good news. We are well positioned to rise together, to achieve greater prosperity in partnership, to offer all of our people a chance at a better future. But to do that, we need to decide whether we will embrace strategies that pay off for all of us while resisting the impulse to embrace quick fixes at the expense of long-term gains. For the United States, that begins with addressing real questions that some in the region have about the strength of our commitment, as well as doubts that some of our own people have about whether the global playing field is truly level or rigged to America's detriment.

To those in the region, I say the United States is determined not just to reengage but to lead. We have an ambitious agenda for delivering significant benefits to our people and our partners, and we are steadily carrying it out.

And to citizens of my own country, we know as we watch factories closing down at home and products continuing to flow in from overseas that economic integration is a question mark. And many people wonder whether it will really help America and Americans.

Well, let me say this. Ensuring that economic engagement delivers results to the American people is out top domestic priority. It is a top foreign policy priority as well, and it is a personal priority, more to me having had the great privilege of traveling our country extensively, representing all of New York state for eight years in the Senate. And I will be speaking more about that in the weeks ahead as we prepare for APEC.

The United States seeks partnerships that are governed reasonable, rules-based approaches, that give businesses from all of our economies the chance to compete and that are grounded in shared principles. Specifically, there are four principles the United States believes are critical to supporting long-term, high-impact, inclusive growth. We are ready to defend and advance these principles in our engagement with economies in APEC and beyond.

First, we seek an open platform, one that allows for participation from around the world, including economies not represented in APEC, in order to maximize opportunities for entrepreneurs, investors, workers, and consumers everywhere. Openness has been an attribute of APEC from the beginning, as reflected in the Bogor goals. It reflects our shared belief that an open system invites the most growth.

Even as we work to forge free trade agreements amongst our countries and craft a Trans-Pacific Partnership Agreement, it's important we reaffirm this principle because the Asia-Pacific region should welcome ideas, products, and capital from all corners of the world.

Second, we seek a free platform, one that includes as few barriers to trade and investment as possible. In recent years, we have made strong progress together toward removing tariffs and other so-called border barriers. But let's face it: Numerous non-tariff barriers remain. For businesses to make inroads into new markets and for citizens to find jobs, we must better align our standards applying to everything from manufactured goods to buildings. We must improve the quality of our regulations to ensure that they are not unnecessarily burdensome. And we must refrain from using local content requirements that discriminate against foreign companies.

Third, we seek a transparent platform in which the so-called rules of the road are developed in consultation with all stakeholders and known to everyone, no matter their connections or country of origin. In the absence of transparency, corruption flourishes; regulations can be applied arbitrarily, small business owners may discover that some rules change without warning or apply to them but not to others. None of this is good for competition or for sustaining the trust and confidence that is necessary for trade and investment. For the best results, the rules of the road should be known to all and applied to all.

Together, openness, freedom, and transparency help sustain the fourth principle, fairness. The United States is looking for a level playing field, an environment in which businesses rise or fall based on honest competition rather than government manipulation. American workers are able to sell the results of their labor overseas just as they buy products made by workers abroad, entrepreneurs can sell their products and services to provide companies and governments alike, and investors have the confidence to make investments across borders.

We also need to ensure that governments enforce and protect intellectual property rights, because theft isn't fair and because without these protections, inventors can't reap the rewards of their ideas and innovation suffers.

Now, these principles aren't prescriptions. There's not one way or one formula that fits every situation. And we are willing to debate how they ought to be applied in various circumstances to address the different needs of different countries. We know that no economy perfectly reflects them, ours included, but we believe that together these principles ensure the best circumstances for all nations to rise, from emerging economies to those that are highly developed. They serve the interests of the American people, the Chinese people, the Australian people, all the people of Southeast Asia.

In the coming months, the United States will take concrete steps towards strengthening an open, free, transparent, and fair economic platform in the Asia Pacific by accomplishing three goals that we've been working toward for many years: achieving congressional approval of the Korea-U.S. Free Trade Agreement; making substantial progress toward agreement on all key issues of the Trans-Pacific Partnership; and of course, hosting a productive, results-oriented APEC 2011.

I want to briefly discuss each and how they support a principled, pragmatic strategy for regional prosperity. The U.S.Korea Free Trade Agreement, also known as KORUS, represents a major achievement for both Korea and the United States, and we believe it can serve as a model for the region. It eliminates tariffs on 95 percent of U.S. consumer and industrial exports within five years and significantly reduces tariffs on agricultural products. It includes commitments to provide market access in major service sectors such as telecommunications, accounting, and express delivery. It includes significant improvements in intellectual property protection. And it addresses behind-the-border issues through strong provisions on competition policy, labor practices, environmental protection and regulatory due process.

Many of these provisions posed political challenges, and I want to commend both Presidents Lee and Obama for advocating for this agreement and explaining its benefits to both the Korean and American people. We believe the payoff will be significant for both of us. We expect KORUS to lead to an $11 billion increase in annual goods, exports, and to support at least 70,000 additional jobs on the U.S. side alone. And the economic benefits for the Republic of Korea are also considerable.

But there are also the benefits that cannot be expressed in dollars, a closer political and strategic partnership with a key ally that is cemented not only by shared security concerns, but by closely integrated economies. This free trade agreement will deliver immediate economic results while strengthening the broader strategic relationship between Korea and the United States for future generations. Our goal is to have all three pending agreements—KORUS, Panama, and Colombia—with their outstanding issues addressed approved by Congress this year.

The United States is also making important progress on the Trans-Pacific Partnership, which will bring together nine APEC economies in a cutting-edge, next generation trade deal, one that aims to eliminate all trade tariffs by 2015 while improving supply change, saving energy, enhancing business practices both through information technology and green technologies. To date, the TPP includes Brunei, Chile, New Zealand, Singapore, Australia, Malaysia, Peru, Vietnam and the United States.

Now we hope in time that that number will grow to include all the APEC economies and that the TPP will provide a foundation for an eventual free trade area of the Asia Pacific. The TPP represents a new kind of trade agreement, one that promotes not just more growth but better growth. For the first time in any trade negotiation, TPP is focused on small and medium-sized enterprises, which, as you know, are major job creators, but which are less engaged in international trade. We are taking on the barriers that hit these small and medium-sized businesses the hardest, such as complex legal frameworks and a lack of transparency.

We're dealing with new obstacles, like the increasingly common problem of so-called indigenous innovation, measures that force investors to favor one country's domestic technology. And we are working to ensure that the TPP reflects shared values, including worker rights and protection of the environment. These goals matter to all of us, and they should especially matter to those emerging economies that are growing at such a rapid rate. Now, some may think they can't afford to stop and invest in environmentally sound practices if they're going to catch up with the competition, or that the challenge of achieving balanced, inclusive growth doesn't apply to them yet, or that they can postpone making serious investments in knowledge-based industries until their economies are further along the development spectrum.

But in fact, economies at all stages of development need to be dealing with these issues now, because their repercussions are already evident in deforestation, food insecurity, social inequality, and political instability. And we all face worldwide, growing problems of under-employment. Even in China, where the economy is roaring ahead, there are not yet enough high-caliber professional jobs to absorb the 6 million college students graduating every year. These young people move to the cities with high hopes and often return home after a few years disappointed and uncertain about their future. Now, that story is familiar to many young people in this country too.

So all of us need to be working on several levels at once—creating jobs, increasing trade and investment, fueling innovation, investing in education, and pursuing inclusive growth that pays off across populations. These are the elements of a 21^st century economic agenda. And helping us achieve that agenda is a job for APEC. So that's the third and final goal that I want to discuss today.

The United States plans to use our year as host of APEC to push this organization to do more to deliver useful, tangible results. This builds upon the vision that APEC leaders voiced in Yokohama last year to promote stronger and deeper regional economic integration by advancing common trade and investment interests. In 2011, we want APEC to help define, shape, and address next generation trade and investment issues, and to take steps to help reduce the time, cost, and uncertainty of moving goods through regional supply chains.

We want to work through APEC to find ways to achieve environmentally sustainable growth by reducing barriers to trade in environmental goods and services, stopping illegal logging, eliminating inefficient fuel subsidies, and facilitating trade in remanufactured products to reduce waste and save energy. We want to work with APEC economies to strengthen the implementation of good regulatory practices to prevent technical barriers to trade, to increase regulatory cooperation particularly as it relates to emerging technologies.

We want APEC to help combat poverty. For example, to prevent destabilizing spikes in international food prices, by ensuring that none of our economies impose export restrictions on food. And we want to build upon our tradition of problem solving and help APEC become an even more effective forum where governments and businesses can find pragmatic solutions to trade and investment problems, and where new ideas can be debated and tested.

APEC has come a long way in the past two decades. Together, we have built its capacity to deliver results for member economies. Now, we ought to go even further and help APEC become an even more effective organization, one that fosters the norms and practices that will give rise to more and better economic cooperation throughout the region.

Now I will be the first to say none of what I have said already will be easy. This is a diverse community. Each of us faces our own distinct challenges, and each boasts of our own distinct strengths. But no matter where we fall on the economic spectrum, I believe we are all pursuing the same basic goals—more jobs for our people, more money in their pockets, and economic climate that supports entrepreneurs, educational systems and infrastructures that promote long-term growth, and above all, a sense that our countries are moving in the right direction and that all of our best days are yet to come.

For billions of people worldwide, life is changing in dramatic ways. The future is opening up, but that future is also unknown. In December—early December, I gave a speech in Doha in which I talked about all of the challenges to inclusive growth, employment, and opportunity that we saw in the Gulf and North Africa. In the question-and-answer period, there were many questions about what I meant, and I talked very bluntly about corruption and the lack of transparency, and the need to instill in young people who are now globally connected trust and confidence that their governments are really working for them.

That is one of the big challenges for governments everywhere today. Because what used to be the private province of governments or the very top leaders in business is now open to the world in a way that never existed. Corruption is now a concern of citizens who see with their own eyes that the people leading them are living in a much better way than they are, and that there doesn't seem to be much attention paid or concern for the failure to raise the standard of living and the incomes of families.

We are living in a totally different environment. I think it's good. I think the fact that a young person in Egypt can communicate with a young person in Switzerland or the United States or Japan and can share ideas and talk about how to improve their lives and make their countries even better is 21^st century patriotism. These young people are looking to see their own countries deliver on the promises that we have all made over so many decades. Those governments that understand this and put into action economic policies that respond to these needs will flourish.

The choices we make today and the work we do together will help define the contours and give people the tools they want to pursue their own dreams and make the most of their own God-given potentials. The United States is committed to this mission. We seek economic growth that accords with principles of openness, freedom, transparency, and fairness because we want to see the entire world—not just a small slice at the top—get richer and stronger. From the computer programmer in the United States to the electronics manufacturer in China to the service provider in Vietnam to the miner in Peru, we know that our futures are entwined. Our people will rise or fall eventually together, and we each have a stake in each other's success.

So we want to work with you to help lead this region's progress in a spirit of true partnership. That is our goal. And we look forward to achieving real substantial milestones on the way to those goals in 2011 and beyond. This is a great opportunity for APEC, and we know we're ready to seize it. Thank you all very much.