Introductory Remarks Omitted

Vice President Biden. Let me be clear: I believe, as the President said also to the Vice President in the Oval Office not long ago, we believe that a rising China is a positive development—not only for China but also for the United States and the world. It will fuel economic growth and prosperity, and a rising China will bring to the fore a new partner with whom we can have help meeting the global challenges we all face.

Even as our nations cooperate, though, as the Vice President point out, we will continue to compete. As Americans, we welcome this competition. I've said to the Vice President before, it's part of our DNA. And it pushes our companies to develop better products and services and our government to craft better policies.

But competition can only be mutually beneficial if the rules of the game are understood, agreed upon and followed. I'm pleased that we have made progress in areas of concern. China's exchange rate is appreciating, though still substantially undervalued in our view. China has committed to rebalance its economy and has just informed us that it will move forward this year with a tax reform policy that will increase imports and promote consumption.

China has also just told us that it will open third-party liability auto insurance market to foreign companies, an important step in the reforming of the financial sector.

And China has responded to our concerns about procurement policies and established a high-level body to strengthen enforcement of intellectual property rights as well.

For our part, the U.S. is working to be responsive to Chinese concerns as well. For example, the United States is expanding our visa processing capacity in China to help reduce delays and encourage Chinese travel to the United States.

But I'm sure, as the Vice President will be the first to tell you, we have work to do—especially on issues like discriminatory subsidies and financing, protecting intellectual property and trade secrets and ending the practice of making the transfer of technology a requirement for doing business.

The United States will also work to ensure that all countries play by the international rules. We've brought cases that have challenged unfair trade practices, and we've defended U.S. producers and workers in many arenas.

And in last months, State of the Union address, President Obama announced further steps to investigate and challenge unfair trading practices, protect our markets from counterfeit and unsafe goods and level the financial playing field for our companies.

I look forward to hearing from those of you gathered here today about both the benefits—and there are many—and the challenges of doing business in China, as well as about your plans here and their plans here in the United States. We welcome your suggestions as to how our governments can address the difficulties you face.

And I want to thank you again, Tom, for your hospitality and thank all of your colleagues for joining us, and I look forward to our discussions.

Mr. Vice President.

Vice President Xi. The broad and active participation of business people in both countries has made the comprehensive, mutually complimentary, and win-win China-U.S. economic relationship more colorful and more dynamic. The purpose of my current visit to the United States at the invitation of Vice President Biden is to implement the important agreement of the two Presidents and advance the China-U.S. cooperative partnership.

This morning, I met with President Obama and held talks with Vice President Biden. During these meetings, we had in-depth and candid exchange of views on China-U.S. relations and major international and regional issues of shared concern. We reached a new and important agreement that will help us enhance mutual trust, increase mutual understanding, and generate win-win outcomes.

We had an in-depth exchange of views on economic and trade issues. We agree that China-U.S. economic relationship is highly mutually complimentary and full of dynamism. The two sides should quicken our steps to build a comprehensive and mutually beneficial economic partnership, advance the investment and trade package plan on cooperation, address economic frictions through dialogue and cooperation instead of by protectionist means so as to promote a steady recovery and growth of the two economies and the world economy as a whole.

With regard to the U.S. concerns concerning trade imbalance, IPR protection, indigenous innovation and investment environment, the Chinese side has taken steps to address them and will continue to do so. We hope that the U.S. side will adopt the same positive attitude and take credible steps as soon as possible to address Chinese concerns on lifting restrictions on high-tech exports to China and providing a level playing field for Chinese companies investing in America.

Since the normalization of China-U.S. relations, business people of the two countries have worked together to make progress. What they have done has made important contribution to China-U.S. economic cooperation and overall China-U.S. relationship. In the process, they have shared development opportunities and reaped handsome profits. This is a true example of one reaps what he has sown.

Given the growing uncertainties and instability in world economic recovery, there has become an even more pressing need for China and the United States, and our businesses, to strengthen cooperation. In August last year, in Beijing, Vice President Biden and I attended a business forum. And today, once again, we are having this face-to-face interaction with business representatives of both countries.

In doing so, we want to increase and expand China-U.S. economic and trade cooperation and bring it to a higher level, to the greater benefit of the two peoples. To achieve this end, I would like to share with you some of my observations. First, the British thinker Francis Bacon said, “The ripeness or un-ripeness of the occasion must ever be weighed.”

At present, both China and the United States are at a critical juncture of shifting growth models. China is implementing its 12th Five-Year Plan with focus on expanding consumption, upgrading service sector, and encouraging Chinese companies to go global, while the United States is implementing the National Export Initiative, investing in America and programs with focus on expanding exports, boosting the manufacturing sector, and inviting in foreign companies.

The economic agendas of the two countries have a lot to offer to each other and there is space for our cooperation in energy, environmental protection, biomedicine, advanced manufacturing and infrastructure. I hope business people of the two countries will follow their trend to seize the opportunities and translate potentials into real win-win outcomes.

Second, range far your eye over long vistas. We should adopt a long-term perspective and have broad vision. The vision of an entrepreneur decides his strategy, his actions decide his attainments. I hope business people will not let the drifting clouds block their views, will not allow their hands to be tied by some temporary disturbances. Instead, I hope they will develop more and better products and services. Here I wish to congratulate General Motors for becoming world champion in car sales last year.

As far as I know, the SAIC-GM, a joint venture of SAIC and GM now produces and sells 1.2 million cars every year. For two consecutive years, GM sales in China has exceeded its sales in the States. Last year, the urbanization rate of China reached 51.2 percent with urban population totaling 690 million. With the continued process of urbanization, it is estimated that by 2015 the total retail sales of consumer goods in China will reach 32 trillion RMB.

During the 12th Five Year Plan period, China will import over $8 trillion U.S. worth of commodities. Such a huge Chinese domestic market offers broad space for mutually beneficial cooperation between Chinese and American business communities. We welcome more American companies to make investment in China.

Third, to strengthen the role of China-U.S. economic relationship as the ballast and propeller in our bilateral relationship—those two metaphors of ballast and propeller shows how much weight our economic relationship carries and as that it serves a strong, driving force.

Last year, our bilateral trade hit a record high of $446.6 billion U.S., an increase of 16 percent on year-on-year basis. At this rate, it is expected to top $500 billion U.S. I hope business communities and chambers of commerce in both countries will continue to care about support and take part in China-U.S. economic cooperation, present a true picture of mutually beneficial China-U.S. economic relationship to the governments and the people, oppose protectionism, and more vocally effectively prevent politicizing economic issues and avoid various kinds of undue interference so as to uphold to the overall interests of China-U.S. relationship and bilateral relationship.

Fourth, running business conscientiously, honestly fulfill corporate social responsibility. Both Chinese and American business people should come to realize that only with credibility a company can win a good reputation.

I'm happy to learn that Chinese Wanxi-ang Group in recent years has purchased some bankrupt American enterprises that has helped to keep more than 3,500 jobs for local people. And the Tianjin Pipe Corporation of China invested $1 billion U.S. in the state of Texas, creating 800 jobs for local people. I am also happy to learn that some of the American companies represented here have taken active parts in poverty alleviation and scholarship programs. All these have demonstrated the strong sense of social responsibility and morals of Chinese and American business people.

I hope while expanding your business, you will further reward the local community, creating jobs for local people, increasing revenues for local governments and taking part in the public welfare and community development projects, so that our two people benefit more from China-U.S. economic cooperation.

Ladies and gentlemen, American writer Edward Bellamy said, “The Golden Age is before us, not behind us.” Looking ahead to 2012 and even longer time to come, I'm fully confident that the Chinese economy will maintain steady and fast development; that the U.S. economy will achieve strong recovery and growth, and that China-U.S. economic cooperation has a bright future.

I sincerely hope that business people of the two countries will seize the opportunity and strive for greater progress and write more success stories in China-U.S. economic cooperation. I thank you.

Introductory Remarks Omitted

Vice President Biden. It's an honor to join you in welcoming Vice President Xi and all of those who have traveled from China to be here, from the provinces as well as the official delegation.

I was asked today what it's like to spend so much time with Vice President Xi, both in China and here, and I indicated then and I'll say it again—it's been a great pleasure getting to know him personally.

The Vice President and I have gotten to spend more time with one another than I think either of us anticipated when both our Presidents indicated and instructed us to get to know one another better.

We had the opportunity to spend some time together last year in Italy when we both were there representing our governments to celebrate the unification of Italy at its 150^th anniversary. And the Vice President was kind enough to host me for four days in China, both in Beijing and traveling to Chengdu with me.

And I can say with real sincerity that I've been looking forward to the opportunity to return the hospitality that he has shown to me, and this is the capstone to that visit with he and I here in Los Angeles.

I suspect all of you in this audience have traveled a great deal, and I must tell you, the thing I have come to admire about my colleague is his incredible physical stamina. Since he arrived in the United States on Monday, he started off with Dr. Kissinger and Zbig Brzezinski and a number of very serious American diplomats and strategists, and the next day he spent I think 13 or 14 hours with me, starting early in the morning and going straight through to a dinner at my home with members of our Cabinet and others ending late that night.

And Governor, the next morning he left early to go to Muscatine, Iowa, and Secretary Clinton and I said, better him than us. I think he got more delegates than either of us in Muscatine. But I must—I'm just telling you, it's the measure of the man. He wanted to go back and reacquaint himself with and thank the people who had been hospitable to him 27 years earlier.

And then just to prove his stamina he came to Los Angeles, and from here he leaves from Los Angeles to Ireland on his way to Turkey. The only place I can really help him is in Ireland. I can get elected there.

Mr. Vice President, you and I have spent a substantial amount of time together, and that's fairly rare in modern diplomacy. And let me add that we've all been touched—and I mean this sincerely—by your interest in our country, your desire to meet our people, and by the personal relationships you're forging here. It's made a deep impression.

As the former governors of California are in the room, as well as the present governor can tell you, there are no people in the world that know better than the people of California, that the United States of America is a Pacific nation.

For generations, Californians have looked to the Asian-Pacific region as a critical element of their prosperity. And now, it is critical to our efforts, all of America's efforts, to put Americans back to work and expand opportunity.

I would venture to say, if we added up the hours in the last six months, the Vice President and I have probably spent 20 hours alone in conversation. And we've pointed out that seven of our 15 largest export markets—America's export markets—are in Asia, with China now the foremost among them. Last year alone, the United States exported to China more than $100 billion worth of goods and services, supporting hundreds of thousands of American jobs. And those jobs that are tied to exports are quality, high-paying jobs, estimated to be worth more than 15 percent more than all other jobs in America.

And Mr. Vice President, as we've discussed, the faster the U.S. economy grows, the more Chinese citizens will benefit as well. So there is a great potential for both of us in working together to increase and solidify this relationship. The Vice President has been straightforward in the changes he'd like to see, and I have been equally as straightforward in the changes that I'd like to—we'd like to see in our trade and economic relationship.

The Vice President indicated that China wants to invest more in the United States. And we're working to make that easier, and there's a whole lot of governors here who are looking forward to that. And thanks to the great work of our ambassador, Gary Locke—and Gary, stand up so everybody can see you. Ambassador Locke was the Secretary of Commerce, as well as the—when he was governor of the state of Washington. His hallmark is getting things done, and getting them done quickly.

Under the ambassador's leadership, we are now issuing more than a million visas a year—faster than ever before—to Chinese students, to tourists, as well as to businesspeople. I assume that came from a student. And I've explained the things that we need to see for American companies and workers. Here too, we're making real progress.

We very much want to see more of our businesses able to sell their goods and services in China. And Vice President Xi has committed to help make that possible. In this recent visit, China has opened its market to American auto insurers and has taken concrete steps to enforce intellectual property rights, and it has plans to reform its tax system, which will help increase demand for American goods and services by lowering taxes on so-called luxury goods.

As President Obama and I have told the Vice President and all of you—and many of you have witnessed personally—China has made the most remarkable progress in the shortest amount of time than maybe any country in history. And we in our administration and in this country welcome those gains. And I think American business leaders in this room will agree that we all welcome the competition. I know American workers welcome the competition. It not only pushes our companies to develop better products and services and our government to craft better policies, but it encourages our workers to be more cooperative [sic] and to work even harder, increasing productivity.

But the crux of our discussions is that competition only benefits everyone if the rules to the game are fair and followed. So we will continue to work with the Vice President and the Chinese government to make sure that everyone is playing by the same rules on a level playing field. I strongly believe, and I think Vice President Xi does as well, that the honest, sustained dialogue we've had this week can and will build a stronger relationship that benefits both our nations and our people.

Introductory Remarks Omitted

Secretary Bryson. Next Tuesday, it will be 40 years since President Nixon went to China. At that time, he correctly predicted that a bridge would be built between our countries.

So not only has that bridge been built, but it gets stronger every day. As the two largest economies in the world, our relationship has never been more important.

The prosperity of people in China, in America, and—in fact—around the world will be affected by how effectively we cooperate and lead together.

I'd like to briefly talk in these remarks about how we can create greater balance in two critical areas—trade and direct investment.

Last year, my first international trip as Secretary was to Beijing and Chengdu. In Beijing, we saw 33 American-made trucks from Wisconsin being used to fight fires and remove snow. The Department of Commerce was involved in helping the company, Oshkosh, enter into the Chinese market.

Stories like that are now commonplace. As a result of Chinese economic growth, U.S. exports to China have grown by almost 50 percent over the past two years. They exceeded $100 billion for the first time in 2011.

At the same time, however, our goods trade deficit with China grew–by about 30 percent.

We must work harder to achieve balanced trade growth. The President is in the state of Washington today, outlining steps to further increase U.S. exports. And I am pleased that this topic is a major part of today's forum.

Already, the Department of Commerce has 120 of our commercial service officers in China–twice the number we have in any other country.

Today, American businesses are eager to know more about which business fields and sectors in China will be opened wider for foreign participation. And, many of our high-tech–and other– businesses want to know how China will work to address concerns surrounding issues such as intellectual property and trade secret protection, as well as forced technology transfer.

Addressing these issues isn't easy. And to be sure, we do have our differences, but with mutual commitment, I believe we can find common ground.

As members of the World Trade Organization, there are no two countries in the world with a greater stake in an open, rules-based trading system than China and the United States.

Our U.S. businesses are eager to meet the needs of Chinese consumers. And as an example of working together, we are pleased that this week China took a meaningful step forward, committing to allow companies from around the world to compete in selling motor vehicle insurance.

Earlier this week in Washington, China ore broadly committed to “actively expand imports” and “promote balanced trade.”

As that commitment is fulfilled, it will be good for China, good for America, and good for the global economy.

Let me turn now to direct investment.

Increasing the amount of direct investment both in the U.S. and China is another critical part of a broadened U.S.-China commercial relationship. American companies stand ready to continue investments in China, even as our Chinese counterparts expand investment and manufacturing here in the United States.

To move to greater balance, openness and transparency in foreign investment approvals in China will be essential.

In the last few years we pleased that Chinese companies have moved beyond exports and have begun to make direct investment in the United States.

In general, we welcome companies that choose America when they decide to build a new facility and create new jobs.

Foreign direct investment in the U.S. has been strong from many regions around the world–with $228 billion in 2010, up from $153 billion in 2009.

America is truly open for business.

And, more than ever, we stand ready to help foreign firms and U.S. economic development organizations create more of these win-win situations. A significant further step announced by President Obama is the SelectUSA initiative at the Commerce Department.

Through SelectUSA, we will train our Commercial Service officers in fast-growing markets—including China.

They will provide greater help to Chinese businesses that see the benefits of directly investing in the U.S. and creating jobs here.

The SelectUSA initiative will help us address, investigate, and respond to any concerns that Chinese investors might have regarding our rules and regulations.

In closing, it is clear that there are common ideas and principles that must be instilled as the bedrock of the U.S. China relationship.

A level playing field. Balance in our economic and trade relationship. Leadership in ensuring strong and sustainable global growth.

This is the vision we must strive for as we build an even stronger bridge between America and China in the 21^st century.

With that shared vision, we can also work together to address even more of the world's greatest challenges—from security… to energy and the environment… to health and education… and more.

As the two largest economies in the world, we are called on now to cooperate more than ever before.

People like all of you here today will lead the way forward in a spirit of enterprise and openness.

In this—the Year of the Dragon—let us unlock the full potential of our industries and our people. Working together, I am confident that the future of our countries will continue to be bright and prosperous.

Introductory Remarks Omitted

Ambassador Marantis. A well-known Tagalog proverb says, 'a person needs to remember where he came from in order to get where he wants to go.' When considering the future of the trade and economic relationship between our two countries, this saying rings true.

The United States and the Philippines are firm allies and historic partners, united by a shared history, a common language, and extensive linkages between our peoples. Our abiding friendship has been forged by a history of shared sacrifice and common purpose, and enriched by the presence of more than four million Filipinos and Filipino Americans in the United States, and over 150,000 Americans here in the Philippines. Our soldiers have fought valiantly together in places like Corregidor, Bataan, and Leyte.

The American Chamber of Commerce in the Philippines symbolizes the depth of our connections—the first U.S. Chamber overseas, established in 1902 and incorporated in 1920, it has been active in promoting American interests and commercial linkages here in the Philippines for more than one hundred years.

The magnitude of our trading relationship further underscores these close connections. Our two-way trade has grown over the decades, to $22 billion in 2011, comprising $17 billion in goods and $5 billion in services; in 2010, our two-way stock of foreign direct investment was $7 billion. The Philippines also has become a leading beneficiary of our Generalized System of Preferences program, with roughly $1 billion of Philippine goods exports entering the U.S. market duty free every year. The Obama Administration's goal is to strengthen and improve our trading relationship, not only to enhance our nations' prosperity, but also as a key part of the President's broader strategy to increase American engagement in, and focus on, the Asia-Pacific region.

However, if you compare the trade statistics I just mentioned to what is happening more broadly in the region, you will see a disconcerting trend. In the past five years, our bilateral goods trade has not kept up with our competition in the Asia-Pacific region. In fact, our trade in goods has declined slightly, in both absolute and relative terms. In 2008, the United States was the Philippines's biggest trading partner. Now, several years after the entry into force of the Japan-Philippines Economic Partnership Agreement, Japan holds that top spot. And as a result of the Philippines's preferential trade agreements with China and Korea, your trade with those countries is rapidly increasing as well.

While $22 billion remains a lot of trade, the overall trend is not what we want to see in one of our oldest and closest trade relationships. What we want is simple: we want to regain our place as the Philippines's number one trading partner—and to stay there for years to come.

While keeping these trends in mind, my message today is one of optimism—optimism because we now have a golden opportunity to recapture the momentum in our trade relationship, expand the commercial linkages between our two countries, and modernize the underpinnings of our historic engagement so that it better reflects trade and investment in the twenty-first century. Let me share with you why we are so optimistic.

First, the United States and the Philippines are engaging in dynamic and energized bilateral discussions. Led by my boss, Ambassador Ron Kirk, and Secretary of Trade and Industry Gregory Domingo, our trade officials have met frequently and have held productive talks on new initiatives and avenues of cooperation.

These efforts are bearing fruit. At last November's APEC meetings in Hawaii, we signed a customs administration and trade facilitation agreement, demonstrating our shared commitment to ensuring simplified, transparent customs procedures so that trade can flow freely without unexpected and unnecessary delays. Both because of its substance and the momentum it gives our discussions, this agreement is an extremely important step.

Second, we are assisting the Aquino administration's efforts to fight corruption and create the right conditions for sustained broad-based economic growth, including through President Aquino's five-year Development Plan. If done well, implementation of the Development Plan will enhance the economic performance of the Philippines and will make the Philippine economy a more attractive place for trade and investment. As part of these efforts, we applaud the Philippines's leadership as one of eight founding governments of the Open Government Partnership launched last September in New York.

Under this Partnership, the Aquino administration committed to a global initiative for more transparent, effective, and accountable governance. These steps are important in light of the clear, direct, and positive correlation between improved governance and transparency, and the creation of a better environment for economic growth and job creation.

The United States supports these policies through President Obama's new paradigm of development assistance. As many of you know, the Philippines is one of only four countries—and the only country in Asia—in the Partnership for Growth program, or PFG. The PFG prioritizes economic growth in countries committed to good governance. Under the PFG, our two governments have agreed on a statement of principles and a five-year program of activities that prioritizes key objectives of the Aquino administration's Development Plan, including measures aimed at fostering a more open and competitive business environment, strengthening laws and regulations, and supporting fiscal stability through improved expenditure and revenue management.

Third, we are working with the Philippines to confront challenges we face in our bilateral relations. For example, we support the new and potentially significant efforts being taken by the Philippines to improve the protection and enforcement of intellectual property rights. In the past, a substandard IPR environment has been a competitive drag on the Philippine economy and an important reason why your economic performance has lagged that of other countries. Widespread piracy and counterfeiting, and weaknesses in enforcement, including the slow process of prosecuting IPR cases in the Philippine court system, have been issues of longstanding concern to U.S. and Filipino stakeholders. While the challenges are significant, we applaud efforts underway to improve the situation, including the Supreme Court's recent issuance of new rules to improve the handling of IPR cases in the court system. This is an important step in the right direction.

We are also very interested in the copyright legislation currently before the Philippine Senate and scheduled for its final reading next month. After more than a decade in process, passage of this important legislation would send a strong signal that the Philippines is motivated to improve its IPR environment and join a growing number of countries in the region which are taking steps to nurture creativity and innovation in the twenty-first century.

In addition, we have high hopes that through our bilateral engagement, we will resolve some of the other irritants in our relationship, including serious issues affecting our meat trade that I hope to discuss tomorrow with Secretary Alcala. During this trip I will also continue with government officials the discussion Secretary Baldoz and I had in Washington last month on efforts the Aquino government is making to address long standing concerns about the protection of worker rights, including addressing violence against labor leaders.

So, I arrive this week in Manila with great optimism about the future direction of our trade relationship, and I look forward to my discussions with Secretary Domingo, Secretary Purisima, Secretary Alcala, and others. Beyond these ongoing efforts, we have a shared interest in elevating our engagement, and a common desire to shape initiatives that will help grow our trade and investment in the twenty-first century. Now, it is up to us to take advantage of the tremendous opportunity that this moment presents.

Some of you may know that, before coming to Manila, I traveled to other parts of Southeast Asia for discussions on the Trans-Pacific Partnership, or TPP. I would like to take a moment to bring you up to date on TPP—a flagship trade initiative of the Obama Administration and the key platform for future U.S. economic engagement in the Asia-Pacific region.

Through the TPP, we are negotiating with Australia, Brunei, Malaysia, New Zealand, Singapore, Vietnam, Chile, and Peru, to create a high-standard, broad-based regional trade agreement that addresses new and emerging trade issues in a way that harnesses for our exporters the competitive strengths of the Asia-Pacific region. Over the past 18 months, we have made real and tangible progress. In fact, at the APEC meetings last November in Honolulu, President Obama and the other TPP Leaders announced the broad outlines of an agreement and directed our negotiating teams to redouble their efforts to complete this agreement as soon as possible.

The TPP countries have a shared goal— to include additional countries beyond the current nine partners in order eventually to incorporate a region that represents more than half of global output and more than forty percent of world trade. Japan, Mexico, and Canada have already expressed interest in joining the TPP. At the appropriate time, TPP partners will decide by consensus to expand the agreement to new members.

The Philippines is not currently participating in TPP, but I know that business leaders and government officials in the Philippines—like some other countries in the region—are looking at TPP with great interest.

As your government continues to consider the prospect of pursuing potential membership in the TPP, we want to be helpful. We have made that clear, publicly and privately. We are willing to provide our views on the kinds of commitments and policy reforms that likely would be required of the Philippines to join. Where we are able, we are willing to engage on joint initiatives that create important building blocks toward potential membership, like our recent trade facilitation agreement. In addition, we will also consider how the Partnership for Growth can assist the Philippine government with supportive policy reforms.

The notion that we must remember where we came from in order to get where we want to go seems as true for countries as it is for people. Let's remember and value our rich, shared history as we work together to find our best path forward.

Introductory Remarks Omitted

Secretary Clinton. Thank you. Thank you all very much. Thank you. I am so honored to be here to join you in celebrating the 40^th anniversary of President Nixon's extraordinary trip to China.

Now, I was a law student in 1972. I was a poor law student. I did not own a television set. But I was not about to miss history being made, so I rented one—a portable model with those rabbit ears. I lugged it back to my apartment and tuned in every night to watch scenes of a country that had been blocked from view for my entire life. Like many Americans, I was riveted and proud of what we were accomplishing through our president.

President Nixon called it “the week that changed the world.” Well, if anything, that turned out to be an understatement.

Then, the People's Republic of China was profoundly isolated. Poverty was pervasive. The Cultural Revolution had banished nearly all foreigners, as well as foreign businesses, foreign books, even foreign ideas. When President Nixon's motorcade drove through Beijing, the American delegation noted how eerily silent the city was. Now there were people everywhere, but there was hardly a sound.

Yet within a few short decades, China has become the second largest economy in the world. Hundreds of millions of Chinese have been lifted out of poverty and have joined the global economy. Beijing, Shanghai and other cities have turned into noisy, fast-paced, 24-hour centers of commerce and culture. The 2008 Olympics and the 2010 Expo were very successful coming out parties. And China, a rising geopolitical power, has a seat at virtually every table and a role in virtually every institution of importance in the world.

So there is no doubt that the China of today is a very different country from the China of 1972. Now that transformation is due, first and foremost, to the hard work and determination of the Chinese people and their leaders. It was encouraged, however, by people around the world who supported and invested in their progress. And it can also be traced back in a straight line to that week 40 years ago.

Before Air Force One was wheels down in Beijing, China was firmly on the outside of the international order. That visit was the start of China coming in. And since then, China has worked to move beyond its isolation of that time to engage more cooperatively with other nations, and those efforts have delivered great benefits to the Chinese people. And now, completing that journey is essential if China is to cement its newfound standing and build upon the extraordinary gains it has made.

Whether it does has profound implications, not only for China, but for the United States and the world. Because it's not just China that's been transformed during the past 40 years; the U.S.-China relationship has as well.

In 1972, our countries were connected only through a narrow official channel— one member of government talking to another. Today, the web of connections linking our nations is vast and complex, and reaches into just about every aspect of our societies. Our economies are tightly entwined. And so is our security. We face shared threats like nuclear proliferation, piracy, and climate change, and we need each other to solve these problems. The opportunities before us are also shared, and they define our relationship much more than the threats. So therefore, we have the chance, if we seize it, to work together to advance prosperity, pursue innovation, and improve the lives of our people and others worldwide.

Now when I say “we,” I do not mean only our governments, as important as they are. Every day, across both of our countries, executives and entrepreneurs, scientists and scholars, artists and athletes, students and teachers, family members and citizens of all kinds shape and pull and add to this relationship. Together, they represent a vast range of priorities, concerns, and points of view. And they are all stakeholders in how we build toward a shared future. Engaging their talents, ideas and energies makes the U.S.-China relationship far deeper and more durable than anything our governments could do on our own.

It's like that television I rented in 1972. Back then, we had just a few channels to choose from. In fact, as I vaguely remember, we had three broadcast channels and I guess by that time, we might have had public broadcasting, although I'm not quite sure. Today, there are something like 900 channels and more to come. The channels between China and us have multiplied at an astronomical rate.

But there are challenges that come with a relationship this consequential and this personal to so many. It does get bound up in our domestic politics, yes, in both countries. The United States and China both have politics, you know. People's voices are heard in ways they weren't or couldn't have been heard in years past. This political dimension presents complications for both sides, which makes it that much more important that we ensure our partnership delivers results.

All this adds up to a very different kind of relationship than the one we had. We've gone from being two nations with hardly any ties to speak of, little bearing on each other, to being thoroughly, inescapably interdependent. For two nations with long traditions of independence, deeply rooted in our cultures and our histories, these are unusual circumstances to say the least. They require adjustments in our thinking and our actions, on both sides of the Pacific. And so, how do we respond to what is not just a new challenge to our two countries, but I would argue, an unprecedented challenge in history?

Back in 1972, the U.S.-China projec was, in many ways, a signature 20^th century diplomatic endeavor embedded in the context of the Cold War, focused on establishing official ties and laying the groundwork for peaceful engagement, and building a basic understanding of each other. Well, the U.S.-China project of 2012 is something altogether different; indeed, it is unprecedented in the history of nations. The United States is attempting to work with a rising power to foster its rise as an active contributor to global security, stability and prosperity while also sustaining and securing American leadership in a changing world. And we are trying to do this without entering into unhealthy competition, rivalry, or conflict; without scoring points at each other's expense and thereby souring the relationship; and without falling short on our responsibilities to the international community. We are, together, building a model in which we strike a stable and mutually acceptable balance between cooperation and competition. This is uncharted territory. And we have to get it right, because so much depends on it.

After three years of intensive engagement, and the successes and frustrations that have come with it, we are clear-eyed about the obstacles that still remain. There are, understandably so, difficult questions that we must answer, and misconceptions we must address. For example, here in the United States and elsewhere in the world, there are those who make the case—maybe it was made today—that a rising China signals bad news, that as China grows more prosperous and wields greater international power, our relationship will automatically turn adversarial, or the United States will inevitably experience decline as a result. Now meanwhile, some in China fear that the United States is determined to contain their rise and limit their progress to advance our interests at their expense.

And there still remains suspicion and mistrust of the other's intentions, particularly in the military realm. As Dr. Kissinger recently wrote in Foreign Affairs, “Both sides must understand the nuances by which apparently traditional and apparently reasonable courses can evoke the deepest worries in each other.” We must address this head-on and constructively by creating a framework for building trust over time. That means returning to first principles of the relationship: There is no intrinsic contradiction between supporting a rising China and advancing America's interests. A thriving China is good for America, and a thriving America is good for China.

That's why we helped break China's isolation in 1972, and it's why, for more than 60 years, we have underwritten regional peace and security that helped make room for China's extraordinary economic progress; we have championed China's inclusion in international fora like the WTO; we have elevated the G-20 as a forum for international engagement, in part because China plays a key role in it; at Copenhagen and subsequent climate summits, we made cooperation with China a priority; on issue after issue, we have not only welcomed, we have advocated for China's participation and we have called for its leadership.

So to those who ask, “Is the United States attempting to contain China?” Our answer is a clear no. In fact, the United States helped pave the way for China to be where it is today in its own development. We are a country that welcomes others' success, because we believe that it's good for everyone when people anywhere are able to work their way to better lives. If China's rise means that we have an increasingly capable and engaged partner, that's good news for us. And we will seize every chance to engage, because we're not a country that sits on our lead. We're a country with confidence in our own standing and in our ability to compete and succeed.

The choices that America has made diplomatically, economically, and strategically reflect that fundamental belief. But of course, to say that a thriving China is good for America, and vice versa, is not the end of the story, because as we all know, there are different ways for countries to get ahead. And for China, for everyone, success must be achieved responsibly; that is not at the expense of others, but in a way that contributes to the regional and global good.

And this is where China has its own choices to make. Its power, wealth, and influence have pushed it rapidly to a new echelon in the international order. What China says and does reverberates around the globe, and simply by changing itself, China affects the world around it. At the same time, it is still working on its great economic mission, bringing development to millions more of the Chinese people. My Chinese counterparts often talk to me in passionate terms about how far their country still has to go. So China is faced with the complicated task of balancing the demands of development with its responsibilities as an emerging global power, or as my Chinese friends sometimes say, a reemerging global power, because of course China has hundreds, thousands of years of history as an influential nation and culture.

And I've pointed out to my counterparts China's response at times has been to seek to have it at both ways, acting like what I call a selective stakeholder. In some forums, on some issues, China wants to be treated as a great power; in others, as a developing nation. That's perfectly understandable, because China has attributes of both. Nonetheless, the world is looking for China to play a role that is commensurate with its new standing. And that means it can no longer be a selective stakeholder.

Now, I'm well aware that debates about the rise of China and other emerging powers, and they usually start and too often stop with people simply saying, “With great power comes great responsibility”— I think that is a quote from the movie Spiderman, if I remember—and just leaving it at that. Well, it is worth pushing ourselves further on what this really means in action on a pragmatic, day-to-day basis.

Well, for starters, the link between power and responsibility is built into the logic of global politics. As countries become more powerful, their stake in the success of the international system naturally rises, because they have more to lose when that system fails. At the same time, the world's expectations of them naturally rise as well, because they have more to contribute to strengthen the system. But more than this, it is understandable that the international community wants some confidence that a country's growing power will be used for the benefit of all. And given the historic challenges to security and stability posed by rising powers, they do have a special obligation to demonstrate in concrete ways that they are going to pursue a constructive path. This is particularly true for a country that has grown as rapidly and as dramatically as China has.

Ultimately, because emerging powers have such a large and growing impact, allowing them to selectively pick and choose elements of the rules-based international system that may on a short-term basis suit their interests would render the system unworkable. And that would end up impoverishing everyone. Having said that, the international system is not static. Rules and institutions designed for an earlier age may not be suited to today. So we need to work together to adapt and update them. Indeed, we have already begun that work. On issues like trade and climate, efforts to develop new norms and mechanisms are well underway. We have no interest in holding onto elements of the system that have become irrelevant, or unsuited to the challenges of our time, or that work only to benefit some countries and not others. That would give countries incentives to walk away from cooperation and go it alone, which would not serve them or us.

But there are principles that we know work. And we cannot afford to abandon them, like maintaining an economic order that is open, free, transparent, and fair; pursuing security in a manner that is measured and transparent to avoid misunderstandings and unnecessary conflicts; and promoting and protecting human rights and fundamental freedoms, which do reflect universal values and the inherent dignity of all humankind. China has already shown increased leadership on some regional and global issues, like countering piracy and sustaining the global economic recovery. It has also contributed substantially to UN peacekeeping missions worldwide, and we applaud these steps. But we do believe China will have to go further to fully embrace its new role in the world to give the world confidence that it is going to, not just today or on one set of issues, but for the long run, play a positive role that will enhance security, stability, and prosperity.

So the world is looking to China and asking questions like these: Will China adapt its foreign policy so it contributes more to solving regional and global problems to make it possible for others to succeed as well? Will it use its power to help end brutal violence against civilians in places like Syria? Will it explain its military buildup and the ultimate goals of its military strategies, policies, and programs to relieve unease, to reassure its neighbors, to avoid misunderstandings, and to contribute to maintaining regional security? Will it uphold international maritime laws and norms, which for decades have made it possible for nations to engage in peaceful trade? Will it work more vigorously to establish international standards in cyberspace, so the internet works for everyone and so people in China and elsewhere can harness its economic and social benefits? And will it use its economic standing to enforce a rules-based system for global trade and investment so it can advance its own economic development while contributing to global growth?

As economic partners, we can make it possible for more people in both countries to work, trade, invest, create, and prosper. Whether we do or not depends on how we deal with some of our differences. China has things it wants, including more opportunities to invest in the United States, and we have things we want, including an end to discrimination against U.S. companies and protection for their intellectual property; an end to unfair preferences for domestic firms; and more opportunities for American goods, products and services; and of course, an end to what we see as unfair, distorting currency practices.

We want to engage in more trade and investment with China, because we believe in the benefits that come with greater economic activity and healthy competition. But for it to be healthy, it has to be fair, rules-based and transparent. So we will continue to work with China to urge it to make reforms, and we, in turn, will hear and act on those changes it wants from us.

Finally, we do ask, can China meet its obligations to protect universal human rights and fundamental freedoms? Now, this is an area in which we have had long and profound disagreements. And even as our two countries become more interdependent, the United States will, of course, continue to stand by our principles and universal standards of human rights. And we believe that with development comes an opportunity for the aspirations of people everywhere to express themselves freely, whether on the Internet, or in a public square, or on the factory floor. And so like people everywhere, we do believe that the Chinese people have their own legitimate aspirations, and we do believe that everyone should have a legal system that is independent and will protect them from arbitrary action. And we do believe, not just in China but everywhere, in religious and linguistic differences, cultural differences being respected. Reforms that support these goals give people a greater stake in the success of their nations, which in turn makes societies more stable, prosperous and peaceful.

Now, questions like these are the kind that we kick around all the time with our Chinese counterparts. And I personally am very grateful for the open, candid dialogues that we have been holding for the last three years. We have the greatest respect for what China has accomplished in 40 years, and we want to see those accomplishments continue to build into the future.

I think that our outreach to China during the past three years has been a continuation of a bipartisan tradition that every president since President Nixon has upheld. We consult on every single issue of significance; not a day goes by when our governments are not in touch. In this Administration, we've launched our Strategic and Economic Dialogue and a Strategic Security Dialogue, and we've had intensive discussions on just about every issue you can imagine, from trade policy to counterterrorism to human rights to border security. Each of our countries has hosted multiple high-level visits from the other. Our presidents have met in person more than 10 times. And later this year, in May, I'll make my sixth trip to China as Secretary of State.

All of this effort has taken place within a larger regional push to strengthen our ties throughout the Asia Pacific. We've enhanced our relationships with our treaty allies Japan, Korea, Thailand, and the Philippines. We've broadened our relationships with other emerging powers, including India, Indonesia, Vietnam and Singapore. We've strengthened our unofficial relationship with Taiwan. We've reengaged with Burma. We've invested in regional multilateral institutions, including the East Asia Summit and ASEAN. We've increased our economic engagement, updated our regional military posture and amplified our advocacy for the rule of law and universal human rights. In short, we are working around the clock to do everything we can to defend and advance security and prosperity throughout the Asia Pacific. And having that positive, cooperative, and comprehensive relationship with China is vital to every one of those objectives.

So we are committed to this partnership. And now, we and others around the world are looking for even greater leadership from China. China and the United States cannot solve all the problems of the world together. But without China and the United States, I doubt that any of our global problems can be solved. We want China to be a full stakeholder, embracing its role as a major global player, to helping strengthen the international system that makes its own and our success possible. All the while, we will continue to seek every opportunity for engagement with China, but not just at the government-to-government level. We will keep discussing our differences openly, developing as many avenues for cooperation as we possibly can. In short, we will continue the journey begun by many in this room 40 years ago.

In 1972, when President Nixon disembarked in Beijing and shook Zhou Enlai's hand, the premier said, “Your handshake came over the vastest ocean in the world, 25 years of no communication.” A few days later, President Nixon toasted his hosts and said, “The Great Wall is a reminder that for almost a generation there has been a wall between the People's Republic of China and the United States of America. In these past four days we have begun the long process of removing that wall.” Both sides were taking a risk. But they decided that engagement was worth it. They knew that if the summit went smoothly, the conversation between our two countries would continue, and that would lead to cooperation, and that in time we both would benefit from it.

That is precisely what has happened. Nearly everything that China and the United States disagreed about before that trip, we disagreed about after the trip. But we began a conversation that has helped us mitigate our differences and broaden those areas on which we agree. And the result is the relationship we have today, as consequential and multifaceted as any in the world.

We are now trying to find an answer, a new answer to the ancient question of what happens when an established power and a rising power meet. We need a new answer. We don't have a choice. Interdependence means that one of us cannot succeed unless the other does as well. We need to write a future that looks entirely different from the past. This is, by definition, incredibly difficult. But we have done difficult things before.

I wish that all of the leaders from 40 years ago could have been with me when I visited the U.S.A. Pavilion at the Shanghai Expo. I'm very proud to be called the mother of the U.S.A. Pavilion by our Chinese friends. And what was most striking to me is that we had invited young Americans who were studying Chinese to be the guides and the hosts at our pavilion. And many of the Chinese people who had come from around that vast and magnificent country were stunned to be greeted by Hispanic children, African American, Asian American, Caucasian, every kind of person that we have in the United States speaking to them in their language. And the incredible connections that were being made as people were asking questions, telling jokes, recounting where they had come from was as strong an endorsement of the courageous step taken 40 years ago as any that I personally have seen. But it also was a reminder that we do the work we do as secretaries of state or as presidents or premiers or foreign ministers— we do that work because we all have to be committed to making a better future for those young people, that we are the stewards of their future in terms of the kind of opportunities that they will enjoy.

So let us remember and take inspiration from how far apart our countries were when President Nixon landed in Beijing and how much we have accomplished together since then. It is irrefutable proof of the progress that is possible when people work together to overcome their differences and find common ground not only for their own good, but for others'. It is now up to us to make sure that the future is even more promising than the past. Thank you very much.

Introductory Remarks Omitted

Secretary Panetta. I had the opportunity to visit the U.S.S. Arizona this morning, and I've done that before; with my family, and I had the chance to go there with President Clinton when we celebrated the 50^th Anniversary of the end of World War II. I've also had the opportunity to do it with a number of friends. So, I've done it before. But each time I do it, it was deeply moving experience to be thinking of the brave service members stationed here, stationed on that ship, on this island, and who gave their lives for their country on that fateful day some 70 years ago. That sacred memorial reminds all of us who have a special duty to protect this country, to protect America that we must always remain vigilant and aware of potential storm clouds on the horizon, and we must never, never lower our guard. I can't think of a more critical time when the nation needs its very best. Its very best in military experience, in military leadership, in military advice, to be able to confront the challenges and the threats that we face in the world today.

That's why it's truly an honor to join all of you here today to pay tribute to Admiral Willard for his many decades of distinguished service to our nation, to welcome Sam Locklear as he assumes command of Pacific Command, and to recognize the many achievements of the men and women of this, the oldest and largest of our regional commands we have in the U.S. military.

Bob's accomplishments, his strategic vision, and his very plain spoken manner made him an outstanding leader here in the Asia-Pacific. This strategically vital theater is important; this pivotal moment in history when America's future, in many ways, depends on the peace and prosperity of the Asia Pacific region. It is a region filled with incredible opportunities for this nation—in the realm of political, economic, and security relationships that could significantly impact on the security and stability of our future.

And when I look across the world at the threats and challenges we face as a nation, from terrorism to natural disasters, the proliferation of weapons of nuclear destruction, rogue nations and rising powers in the Pacific, this region has them all. Merely operating in the vast expanse of the Asia-Pacific poses daunting operational and logistical challenge. Challenges to being able to deploy and sustain our forces. Yet no matter what the challenge, no matter how daunting a calamity, no matter how tense the stand-off between nations, PACOM has always delivered, has always been there when our allies needed them most, and has always excelled.

In this region, we don't just need a great warrior. We also happen to need in a commander, a great diplomat. Bob demonstrated the power of relationships, how to turn those relationships into partnerships, and how to turn those partnerships into alliances, and how to turn those alliances into true and lasting friendships. He has strengthened long-standing alliances with old friends like Australia, Japan, and the Republic of Korea. He's built new partnerships with countries like Thailand, Indonesia, and the Philippines. The United States has long been the security partner of choice in the Pacific region—and thanks to Bob's leadership of PACOM, our country's important role as a Pacific power has not only endured, it has grown stronger.

We have stayed vigilant and committed to the defense of the Republic of Korea during a time of transition on that Peninsula. We've reassured our friends and allies that we are committed to the Pacific by enhancing our presence across Asia. We have established new rotational deployments of our Marines in Australia, we have forward stationed our Littoral Combat Ships in Singapore, and we are exploring options for enhancing cooperation with the Philippines. PACOM has also worked to restore and build those very important mil-to-mil relationships with China. Under Admiral Willard's leadership, and thanks to the commitment, dedication, and hard work of the more than 300,000 men and women of PACOM are being strongly led. We have made clear that we are a Pacific power and we will be there as a partner, as an ally, and as a friend.

As a major part of our Pacific family nothing confirms that family relationship more than with Japan. As we approach the one-year anniversary of Operation Tomodachi, our relief operations in response to the Japanese earthquake, tsunami, and nuclear emergency, we approach it with respect and thanks for men and women of PACOM and the leadership of Admiral Willard in those operations. I had the opportunity to visit Japan last year, and I heard directly from the Japanese people the gratitude that they had for our personnel who were involved in that massive undertaking, who were delivering supplies, who were conducting search and rescue, and evacuating the injured. PACOM helped Japan, a true friend, to stand back up and stand back strongly after they had been knocked down. In doing so this entire command, the team operating under an extraordinary leader, made all Americans very proud. You brought great honor and great distinction to our great military, Bob, and I thank you for that.

Introductory Remarks Omitted

President Lee. Today, ladies and gentlemen, we had a very useful and constructive discussion on a wide array of issues from North Korea's nuclear and missile development and including other security issues, and also how to promote bilateral trade between our two countries, and of course, other topics of mutual interest.

And we talked about the security situation in the region and the situation on the Korean Peninsula, and agreed to continue working closely together in implementing our North Korea policy. Both countries agreed that North Korea's announcement to test-fire its long-range missile is a violation of U.N. Security Council resolutions, not to mention the latest agreement between the U.S. and North Korea. Therefore President Obama and I both agreed that North Korea must immediately repeal its decision and abide by its international obligations.

President Obama and I agreed that we will continue to enhance and strengthen our combined defense capabilities, and at the same time, firmly respond to any threats or provocations from the North. If North Korea gives up its pursuit of nuclear weapons and missile development, and instead chooses a path towards peace and cooperation, our two countries will work together, along with the international community, to help improve the lives of the people in North Korea and provide necessary assistance that will help North Korea open up a new era.

And we reaffirmed the value and importance of our enduring alliance and discussed a future vision of our partnership. Following the adoption of the future vision of the alliance, which was adopted in June 2009, our alliance is evolving into a truly global partnership where we are working shoulder to shoulder to resolve global challenges.

Furthermore, we reviewed the progress being made in our alliance, a chance to transfer of OPCON two-plus-two security consultations, and agree that we will strengthen our deterrence capabilities through enhanced policy coordination, and strive towards a future-oriented alliance.

Ladies and gentlemen, we will also work together so that the KORUS FTA that came into effect last March 15th will fulfill its goal, that is creating jobs for our workers, expand trade and investments, and overall improve the lives of our peoples. And accordingly, in order to ensure the faithful implementation of the KORUS FTA, we will establish a ministerial-level joint committee, as previously agreed, and check upon the progress.

President Obama and I also exchanged views on the state of the global economy and shared our concern regarding the uncertainties that still remain. In particular, we share the concern that rising oil prices is an obstacle to speedy recovery of the global economy, and agree that international cooperation needed to be further strengthened to bring about stability in the world oil market.

And of course we also talked about regional issues—issues in the Middle East, Afghanistan, and other issues, including Iran, and how we can strengthen international cooperation to bring about a resolution to these issues.

I welcome President Obama once again on his visit. The Nuclear Security Summit was President Obama's initiative born out of his vision to leave behind a safer, more prosperous world for the future generation. And we will continue to strive together to achieve a world without nuclear weapons. I thank him and his team for all the help in ensuring a successful Nuclear Security Summit meeting. Thank you.

President Obama. This visit reflects the extraordinary friendship between our two people. My wife and I were proud to help strengthen those ties when we had the honor of hosting President Lee and First Lady Kim for a state visit at the White House last fall. And during that visit I learned a Korean word that I believe captures the deep affection between our people—jeong. And I feel that spirit again today.

My visits to Korea reflect the leadership role that South Korea is playing in this region and around the world—a “Global Korea.” I was last here for the G20, which was a success under President Lee's leadership. Now we're back, along with more than 50 world leaders, for the second Nuclear Security Summit.

In fact, just today we saw another important step forward. We learned that Ukraine completed the removal of highly enriched uranium from its territory. This fulfills a commitment Ukraine made at our last Nuclear Security Summit in Washington, and I believe it's a preview of the kind of progress we're going to see over the next two days in confronting one of the most urgent challenges of global security—securing the world's nuclear weapons and preventing nuclear terrorism.

My visit to Korea also reflects the enduring strength of our alliance. My last visit to Seoul came as we marked both the 60^th anniversary of the Korean War and Veterans Day. And today I traveled, as President Lee mentioned, to the DMZ to thank our men and women in uniform, American and Korean, who serve shoulder to shoulder. They're the reason that we can stand here free today, and prosperous here today. And we salute them all.

My visit to Korea reflects the fact that the United States is leading again in the Asia Pacific—a region that will affect American security and prosperity in the 21^st century like no other. As I declared in Australia last year, the United State as a Pacific nation will play a larger and long-term role in shaping this region and its future. And the cornerstone of our efforts is our strong alliances, including our alliance with the Republic of Korea.

This is the context for our meeting today. And as President Lee indicated, we had a very good discussion on a wide range of issues. We reviewed our ongoing efforts to modernize our security alliance. We agreed to have our foreign and defense ministers meet in June to discuss concrete measures we can take to continue strengthening that alliance. We're on track for South Korea to assume operational control for the alliance in 2015.

I reaffirmed, as I said in Australia, that reductions in U.S. defense spending will not come at the expense of the Asia Pacific—and that includes South Korea. America's armed forces are going to stay ready for the full range of contingencies and threats. And the alliance between the United States and the Republic of Korea remains unshakable.

We reviewed our great progress in bringing our economies even closer. During my last visit to Seoul we pledged to get our landmark trade agreement done. On President Lee's visit to Washington, it passed our Congress. On this visit, we can say that our trade agreement is now in force. We got it done. This is a win for both of our countries—more jobs and opportunities for our workers and businesses on both sides of the Pacific. That includes supporting some 70,000 American jobs and keeping us on track to meet my goal of doubling American exports.

We discussed regional security, and that obviously includes the issue of North Korea. Last month, North Korea agreed to a series of steps, including a moratorium on long-range missile launches. This month, North Korea announced its intention to conduct a missile launch. As President Lee mentioned, this would constitute a direct violation of Pyongyang's own commitments and its international obligations. Moreover, it would only deepen North Korea's isolation, damage further its relations with its neighbors, and seriously undermine the prospect of future negotiations.

I'll have more to say in my speech tomorrow about our commitment to security and peace on the Korean Peninsula and the choice Pyongyang must make. Today, I'll simply say that North Korea will achieve nothing by threats or by provocations. North Korea knows its obligations, and it must take irreversible steps to meet those obligations. On this, the United States and the Republic of Korea are absolutely united.

Since South Korea is one of our key global partners, we discussed a range of challenges to international security. I again want to thank South Korea for its important contributions to reconstruction in Afghanistan, and I updated the President on our preparations for the NATO summit in Chicago, where we will chart the next phase of the transition to Afghan lead.

And I also thanked the President for South Korea's strong support of sanctions on Iran because its failure to meet its international obligations. I know this decision does not come without costs, both to the Republic of Korea, as well as our own country, but the prospects of an Iran with nuclear weapons would be a threat to the world, and this is one more example of South Korea stepping up and playing a leadership role on the world stage.

And finally, we're deepening the ties between our people. We agreed to expand educational exchanges, which will give more Korean students the opportunity to study in the United States, which benefits both of our countries.

So once again, President Lee, I thank you for your hospitality, for your leadership. Our alliance is strong. Our commitment to the security and prosperity of our people is unwavering. And I'm confident that under South Korea's leadership, the Nuclear Security Summit is going to be a great success.

Q. Good evening. President Obama, President Lee, thank you for the question. I would like to follow up on the North Korean threat on two fronts. The first is to follow up on the question my colleague had. Could you be more specific, from your perspective, what the consequences would be that you would bring to bear on North Korea should there be a rocket launch, in terms of the overall relationship, but also specifics, such as food aid and negotiations?

And also, I'm wondering, sir, if you could give us some insight about whether you've developed an impression of North Korea's new leader, and whether you've been able to yet take a measure of the man.

And to President Lee, good to see you again. I wanted to ask you about the Nuclear Security Summit. Can you explain how it would have any true and lasting credibility when the two major antagonists of North Korea and Iran are on the sidelines?

President Obama. Well, first of all, with respect to the consequences should there be a launch by the North Koreans— as President Lee indicated, North Korea is already under an extraordinary battery of sanctions. They are the most isolated country in the world. They are cut off from basic commerce and exchanges beyond their borders that every other country—almost every other country takes for granted.

Their people are extraordinarily impoverished. The contrast between living standards in the North and living standards in the South could not be greater, and couldn't be a greater testimony to the benefits of living in a free society.

And so the real consequence, should they go forward with a launch, is they will have missed an opportunity, because what we presented to them, and what we've consistently presented to them, is an opportunity for them to take a different path than the one they've been taking, which is resulting in not simply hardship for their people, but a state that is decades behind their counterparts in the region in terms of development, in terms of economic strength, in terms of influence in world affairs.

And so immediate, concrete, tangible effects—we had offered them the possibility, as part of a series of confidence-building measures to move forward with a nutritional aid package, for example. We've indicated to them very directly— because this was part of discussions that had taken place among negotiators—that it would be difficult to move forward with that package if they show themselves unable to make commitments that they've made even a month earlier. Because part of the challenge for any nutrition aid package, for example, is that you makes sure it actually gets to the people who need it, and it doesn't go to serve elites in that country or their military. That requires monitors. It's very difficult to have monitors at a period of tension and friction. And it is difficult to provide aid if you don't think that it's going to get to the people who actually need it. So that's just one example of the kinds of consequence that will take place.

I'll also note that every time North Korea has violated international resolution, the Security Council resolution, it's resulted in further isolate, tightening of sanctions, stronger enforcement, greater support on part of the international community for stronger enforcement. I suspect that will happen this time as well.

So they need to understand that bad behavior will not be rewarded. There had been a pattern, I think for decades, in which North Korea thought that if they acted provocatively then somehow they would be bribed into ceasing and desisting acting provocatively. And President Lee and I have agreed from the start of our relationship that we're going to break that pattern. And I suspect that it will ultimately end up having the impact intended, but in the meantime, it's the people of North Korea that are most likely to suffer.

I do want to comment on the issue you raised with respect to the Nuclear Security Summit. Understand that the concept of the Nuclear Security Summit that we set up was not directed at the specific issue of Iran or North Korea, but was directed at one leg of a multi-legged stool when it comes to our nuclear security. Specifically, if you've got a lot of loose nuclear material, if countries, either historically because of old nuclear programs, or currently in terms of how they operate their nuclear energy facilities, are leaving a bunch of material out there that could potentially fall in the hands of terrorists, that poses an extraordinary threat to the United States, to South Korea, and to countries all around the world.

And so our goal with this Nuclear Security Summit has always been to be very specific, concrete, around a set of issues that if we act with some deliberateness, can actually enhance everybody's security and should not be controversial. And it's a testament I think to that well-defined agenda that two years later we're seeing all these deliverables take place that are taking a whole bunch of nuclear material out of vulnerable positions that could fall into the wrong hands.

It doesn't solve every problem; it doesn't address every issue that I raised in my Prague speech three and a half years ago. We still have issues of how can we reduce nuclear weapons among those countries that currently have nuclear weapons, consistent with the long-term obligations of the NPT.

We still have outliers like Iran and North Korea that are potentially pursuing nuclear weapons and that pose a significant danger, and are engaging in potential nonproliferation activities. But that doesn't diminish in any way the concrete work that's gotten done here. That is significantly reducing the risk that an al Qaeda or a terrorist organization could get a dirty bomb and explode it in Seoul or New York City. And that's always been the objective of the Nuclear Security Summit, and I think that because of the fine leadership that's been shown by President Lee and his delegation, we're going to see a whole bunch of concrete stuff get done over the next two days.

Q. Kim Jong-un?

President Obama. Oh. I think it's hard to have an impression of Kim Jong-un in part because the situation in North Korea still appears unsettled. It's not clear exactly who's calling the shots and what their long-term objectives are. But regardless of the North Korean leadership, what is clear is that they have not yet made that strategic pivot where they say to themselves, what we're doing isn't working. It's leading our country and our people down a dead end.

And, Ben, you were there at the DMZ, and it's like you're in a time warp. It's like you're looking across 50 years into a country that has missed 40 years or 50 years of progress. And if a country can't feed its people effectively, if it can't make anything of any use to anybody, if it has no exports other than weapons, and even those aren't ones that in any way would be considered state-of-the-art, if it can't deliver on any indicators of well-being for its people, then you'd think you'd want to try something different.

I don't get a sense that they've made that decision yet. But my suspicion is, is that, at some point, that's what the North Korean people are going to be looking for. And they do have that opportunity. And when they make that decision, I know I speak for President Lee, no one will welcome it more than we do, because it is in our interests to see every country provide opportunity and prosperity for its people. But there are certain things that just don't work, and what they're doing doesn't work.

President Lee. Regarding the Nuclear Security Summit, President Obama just explained the kind of objectives that we want to achieve by holding this second Nuclear Security Summit. So I just want to add to what President Obama said and say that during the Seoul summit which begins tomorrow, first of all, we're going to review the kind of progress that we made back in Washington, D.C., and then what we're going to do is we're going to make more pledges to reduce and eliminate nuclear materials. We are going to set up more concrete benchmarks, and as a result of the Seoul summit, we will be able to reduce and eliminate about 20,000 nuclear weapons. We still have about 100,000 nuclear weapons left. This is a tremendous amount of nuclear weapons, but I have hope that as we continue to engage with this problem that we will be able to achieve and attain our goal of a world without nuclear weapons.

And another important point that President Obama also mentioned is that 50-plus leaders gathered here in Seoul are going to be discussing how we can prevent nuclear materials and weapons from falling into the wrong hands. We are going to discuss how we can share intelligence and information so that we can prevent individuals and organizations from acquiring nuclear weapons.

You can just only imagine the kind of work that will go into coming up with an agreement between 50-plus states, but nonetheless, we share a common vision and a commitment. And I'm confident that following the meeting in Washington, D.C., the meeting that will start tomorrow will contribute to enhancing our safety and security.

Q. A question going out to President Obama. Mr. President, you just visited the DMZ this morning, and today the North Koreans are commemorating the 100th anniversary of the birth of Kim Il-sung and so they were having this big parade in North Korea, also celebrating the new leadership of Kim Jung-un. If you can share with us your thoughts in visiting the DMZ and what you think about the leaders in North Korea.

And the second question has to do with extending the missile range of South Korea. The South Korean government's position is that since North Korea has a capability of more than 3,000 kilometers in its missile range, that is one reason why you hope to extend the missile range here in South Korea. What are your thoughts on this. And what are some of the preconditions in order to resume the six-party talks?

The last question was also going out to both President Obama and President Lee.

President Obama. You just asked three questions. It's hard to remember them. Well, the first question I think I basically answered—my impressions with respect to the DMZ and the North Korean leadership.

With respect to the issue of extending missile ranges, I think President Lee got it exactly right. We have this incredibly powerful alliance that is multidimensional and involves a whole range of coordination, training activities, making sure that there's interoperability with respect to various weapon systems and our defensive capabilities. And so all these issues are being discussed as we move forward to implementing the 2015 plan.

And so there are no specific preconditions around—or specific obstacles around the missile range issue. Rather it's a broader question of what are the needs in order for us to fulfill our enduring goals around the alliance. And a lot of that is technical. A lot of it takes place not at the presidential level, but rather at the military level. And we will continue to instruct our teams that they work closely together to ensure what is the ultimate outcome— which is not any particular weapon system or any particular missile range, but rather can we protect our people, can we make sure that the objectives of the alliance are achieved.

With respect to the six-party talks, look, we've been very clear about this again and again. It's not that complicated. If the North Koreans are serious about entering into six-party talks they have to show that they are operating in good faith. At minimum, that requires them suspending activities that right now clearly are contrary to previous obligations that they've made and international law. And when they do that, then we'll be able to sit down and resolve, hopefully, some of these longer-term issues.

In the absence of that, it's hard to figure out how these discussions would be productive. And frankly, President Lee and I both have a lot of things to do, and so we try not to have our team sit around tables talking in circles without actually getting anything done. And my hope is, is that at some point the North Koreans make the decision that it is in their interests to try to figure out how to feed their people and improve their economy rather than have big parades where they show off weapons.

Introductory Remarks Omitted

President Obama. Now, this is my third visit to the Republic of Korea as President. I've now been to Seoul more times than any other capital—except for Washington, D.C., of course. This reflects the extraordinary bonds between our two countries and our commitment to each other. I'm pleased that we're joined by so many leaders here today, Koreans and Americans, who help keep us free and strong and prosperous every day. That includes our first Korean-American ambassador to the Republic of Korea— Ambassador Sung Kim.

[O]ur shared future—and the unprecedented opportunity to meet shared challenges together—is what brings me to Seoul. Over the next two days, under President Lee's leadership, we'll move ahead with the urgent work of preventing nuclear terrorism by securing the world's nuclear materials. This is an important part of the broader, comprehensive agenda that I want to talk with you about today—our vision of a world without nuclear weapons.

Three years ago, I traveled to Prague and I declared America's commitment to stopping the spread of nuclear weapons and to seeking a world without them. I said I knew that this goal would not be reached quickly, perhaps not in my lifetime, but I knew we had to begin, with concrete steps. And in your generation, I see the spirit we need in this endeavor— an optimism that beats in the hearts of so many young people around the world. It's that refusal to accept the world as it is, the imagination to see the world as it ought to be, and the courage to turn that vision into reality. So today, with you, I want to take stock of our journey and chart our next steps.

Here in Seoul, more than 50 nations will mark our progress toward the goal we set at the summit I hosted two years ago in Washington—securing the world's vulnerable nuclear materials in four years so that they never fall into the hands of terrorists. And since then, nations—including the United States—have boosted security at nuclear facilities.

South Korea, Japan, Pakistan and others are building new centers to improve nuclear security and training. Nations like Kazakhstan have moved nuclear materials to more secure locations. Mexico, and just yesterday Ukraine, have joined the ranks of nations that have removed all the highly enriched uranium from their territory. All told, thousands of pounds of nuclear material have been removed from vulnerable sites around the world. This was deadly material that is now secure and can now never be used against a city like Seoul.

We're also using every tool at our disposal to break up black markets and nuclear material. Countries like Georgia and Moldova have seized highly enriched uranium from smugglers. And countries like Jordan are building their own counter-smuggling teams, and we're tying them together in a global network of intelligence and law enforcement. Nearly 20 nations have now ratified the treaties and international partnerships that are at the center of our efforts. And I should add that with the death of Osama bin Laden and the major blows that we've struck against al Qaeda, a terrorist organization that has actively sought nuclear weapons is now on the path to defeat.

So in short, the international community has made it harder than ever for terrorists to acquire nuclear weapons, and that has made us all safer. We're building an international architecture that can ensure nuclear safety. But we're under no illusions. We know that nuclear material, enough for many weapons, is still being stored without adequate protection. And we know that terrorists and criminal gangs are still trying to get their hands on it—as well as radioactive material for a dirty bomb. We know that just the smallest amount of plutonium—about the size of an apple—could kill hundreds of thousands and spark a global crisis. The danger of nuclear terrorism remains one of the greatest threats to global security.

And that's why here in Seoul, we need to keep at it. And I believe we will. We're expecting dozens of nations to announce over the next several days that they've fulfilled the promises they made two years ago. And we're now expecting more commitments—tangible, concrete action—to secure nuclear materials and, in some cases, remove them completely. This is the serious, sustained global effort that we need, and it's an example of more nations bearing the responsibility and the costs of meeting global challenges. This is how the international community should work in the 21^st century. And Korea is one of the key leaders in this process.

The United States will continue to do our part—securing our own material and helping others protect theirs. We're moving forward with Russia to eliminate enough plutonium for about 17,000 nuclear weapons and turn it instead into electricity. I can announce today a new agreement by the United States and several European partners toward sustaining the supply of medical isotopes that are used to treat cancer and heart disease without the use of highly enriched uranium. And we will work with industry and hospitals and research centers in the United States and around the world, to recover thousands of unneeded radiological materials so that they can never do us harm.

Now, American leadership has been essential to progress in a second area— taking concrete steps towards a world without nuclear weapons. As a party to the Nuclear Nonproliferation Treaty, this is our obligation, and it's one that I take very seriously. But I believe the United States has a unique responsibility to act—indeed, we have a moral obligation. I say this as President of the only nation ever to use nuclear weapons. I say it as a Commander-in-Chief who knows that our nuclear codes are never far from my side. Most of all, I say it as a father, who wants my two young daughters to grow up in a world where everything they know and love can't be instantly wiped out.

Over the past three years, we've made important progress. With Russia, we're now reducing our arsenal under the New START Treaty—the most comprehensive arms control agreement in nearly 20 years. And when we're done, we will have cut American and Russian deployed nuclear warheads to their lowest levels since the 1950s.

As President, I changed our nuclear posture to reduce the number and role of nuclear weapons in our national security strategy. I made it clear that the United States will not develop new nuclear warheads. And we will not pursue new military missions for nuclear weapons. We've narrowed the range of contingencies under which we would ever use or threaten to use nuclear weapons. At the same time, I've made it clear that so long as nuclear weapons exist, we'll work with our Congress to maintain a safe, secure and effective arsenal that guarantees the defense not only of the United States but also our allies—including South Korea and Japan.

My administration's nuclear posture recognizes that the massive nuclear arsenal we inherited from the Cold War is poorly suited to today's threats, including nuclear terrorism. So last summer, I directed my national security team to conduct a comprehensive study of our nuclear forces. That study is still underway. But even as we have more work to do, we can already say with confidence that we have more nuclear weapons than we need. Even after New START, the United States will still have more than 1,500 deployed nuclear weapons, and some 5,000 warheads.

I firmly believe that we can ensure the security of the United States and our allies, maintain a strong deterrent against any threat, and still pursue further reductions in our nuclear arsenal.

Going forward, we'll continue to seek discussions with Russia on a step we have never taken before—reducing not only our strategic nuclear warheads, but also tactical weapons and warheads in reserve. I look forward to discussing this agenda with President Putin when we will meet in May. Missile defense will be on the agenda, but I believe this should be an area of cooperation, not tension. And I'm confident that, working together, we can continue to make progress and reduce our nuclear stockpiles. Of course, we'll consult closely with our allies every step of the way, because the security and defense of our allies, both in Europe and Asia, is not negotiable.

Here in Asia, we've urged China—with its growing nuclear arsenal—to join us in a dialogue on nuclear issues. That offer remains open. And more broadly, my administration will continue to pursue ratification of the Comprehensive Test Ban Treaty. And after years of delay, it's time to find a path forward on a new treaty that verifiably ends the production of fissile materials for nuclear weapons—ends it once and for all.

By working to meet our responsibilities as a nuclear power, we've made progress in a third area—strengthening the global regime that prevents the spread of nuclear weapons. When I came into office, the cornerstone of the world's effort—which is the Nuclear Non-Proliferation Treaty— was fraying. Iran had started spinning thousands of centrifuges. North Korea conducted another nuclear test. And the international community was largely divided on how to respond.

Over the past three years, we have begun to reverse that dynamic. Working with others, we've enhanced the global partnership that prevent proliferation. The International Atomic Energy Agency is now conducting the strongest inspections ever. And we've upheld the basic bargain of the NPT: Countries with nuclear weapons, like the United States and Russia, will move towards disarmament; countries without nuclear weapons will not acquire them; and all countries can have access to peaceful nuclear energy.

Because of these efforts, the international community is more united and nations that attempt to flout their obligations are more isolated. Of course, that includes North Korea.

Here in Korea, I want to speak directly to the leaders in Pyongyang. The United States has no hostile intent toward your country. We are committed to peace. And we are prepared to take steps to improve relations, which is why we have offered nutritional aid to North Korean mothers and children.

But by now it should be clear, your provocations and pursuit of nuclear weapons have not achieved the security you seek; they have undermined it. Instead of the dignity you desire, you're more isolated. Instead of earning the respect of the world, you've been met with strong sanctions and condemnation. You can continue down the road you are on, but we know where that leads. It leads to more of the same—more broken dreams, more isolation, ever more distance between the people of North Korea and the dignity and the opportunity that they deserve.

And know this: There will be no rewards for provocations. Those days are over. To the leaders of Pyongyang I say, this is the choice before you. This is the decision that you must make. Today we say, Pyongyang, have the courage to pursue peace and give a better life to the people of North Korea.

This same principle applies with respect to Iran. Under the NPT, Iran has the right to peaceful nuclear energy. In fact, time and again the international community— including the United States—has offered to help Iran develop nuclear energy peacefully. But time and again Iran has refused, instead taking the path of denial, deceit and deception. And that is why Iran also stands alone, as the only member of the NPT unable to convince the international community that its nuclear program is for peaceful purposes—the only member. That's why the world has imposed unprecedented sanctions, slowing Iran's nuclear program.

The international community is now poised to enter talks with Iran's leaders. Once again, there is the possibility of a diplomatic resolution that gives Iran access to peaceful nuclear energy while addressing the concerns of the international community. Today, I'll meet with the leaders of Russia and China as we work to achieve a resolution in which Iran fulfills its obligations.

There is time to solve this diplomatically. It is always my preference to solve these issues diplomatically. But time is short. Iran's leaders must understand they, too, face a choice. Iran must act with the seriousness and sense of urgency that this moment demands. Iran must meet its obligations.

For the global response to Iran and North Korea's intransigence, a new international norm is emerging: Treaties are binding; rules will be enforced; and violations will have consequences. We refuse to consign ourselves to a future where more and more regimes possess the world's most deadly weapons.

And this brings me to the final area where we've made progress—a renewed commitment to harnessing the power of the atom not for war, but for peaceful purposes. After the tragedy at Fukushima, it was right and appropriate that nations moved to improve the safety and security of nuclear facilities. We're doing so in the United States. It's taking place all across the world.

As we do, let's never forget the astonishing benefits that nuclear technology has brought to our lives. Nuclear technology helps make our food safe. It prevents disease in the developing world. It's the high-tech medicine that treats cancer and finds new cures. And, of course, it's the energy—the clean energy that helps cut the carbon pollution that contributes to climate change. Here in South Korea, as you know, as a leader in nuclear energy, you've shown the progress and prosperity that can be achieved when nations embrace peaceful nuclear energy and reject the development of nuclear arms.

And with rising oil prices and a warming climate, nuclear energy will only become more important. That's why, in the United States, we've restarted our nuclear industry as part of a comprehensive strategy to develop every energy source. We supported the first new nuclear power plant in three decades. We're investing in innovative technologies so we can build the next generation of safe, clean nuclear power plants. And we're training the next generation of scientists and engineers who are going to unlock new technologies to carry us forward.

One of the great challenges they'll face and that your generation will face is the fuel cycle itself in producing nuclear energy. We all know the problem: The very process that gives us nuclear energy can also put nations and terrorists within the reach of nuclear weapons. We simply can't go on accumulating huge amounts of the very material, like separated plutonium, that we're trying to keep away from terrorists.

And that's why we're creating new fuel banks, to help countries realize the energy they seek without increasing the nuclear dangers that we fear. That's why I've called for a new framework for civil nuclear cooperation. We need an international commitment to unlocking the fuel cycle of the future. In the United States we're investing in the research and development of new fuel cycles so that dangerous materials can't be stolen or diverted. And today I urge nations to join us in seeking a future where we harness the awesome power of the atom to build and not to destroy.

In this sense, we see how the efforts I've described today reinforce each other. When we enhance nuclear security, we're in a stronger position to harness safe, clean nuclear energy. When we develop new, safer approaches to nuclear energy, we reduce the risk of nuclear terrorism and proliferation. When nations, including my own, fulfill our responsibilities, it strengthens our ability to ensure that other nations fulfill their responsibilities. And step by step, we come closer to the security and peace of a world without nuclear weapons.

I know that there are those who deride our vision. There are those who say ours is an impossible goal that will be forever out of reach. But to anyone who doubts the great progress that is possible, I tell them, come to Korea. Come to this country, which rose from the ashes of war—a country that rose from the ashes of war, turning rubble into gleaming cities. Stand where I stood yesterday, along a border that is the world's clearest contrast between a country committed to progress, a country committed to its people, and a country that leaves its own citizens to starve.

Come to this great university, where a new generation is taking its place in the world—helping to create opportunities that your parents and grandparents could only imagine. Come and see some of the courageous individuals who join us today—men and women, young and old, born in the North, but who left all they knew behind and risked their lives to find freedom and opportunity here in the South. In your life stories we see the truth—Koreans are one people. And if just given the chance, if given their freedom, Koreans in the North are capable of great progress as well.

Looking out across the DMZ yesterday, but also looking into your eyes today, I'm reminded of another country's experience that speaks to the change that is possible in our world. After a terrible war, a proud people was divided. Across a fortified border, armies massed, ready for war. For decades, it was hard to imagine a different future. But the forces of history and hopes of man could not be denied. And today, the people of Germany are whole again— united and free.

No two places follow the same path, but this much is true: The currents of history cannot be held back forever. The deep longing for freedom and dignity will not go away. So, too, on this divided peninsula. The day all Koreans yearn for will not come easily or without great sacrifice. But make no mistake, it will come. And when it does, change will unfold that once seemed impossible. And checkpoints will open and watchtowers will stand empty, and families long separated will finally be reunited. And the Korean people, at long last, will be whole and free.

Like our vision of a world without nuclear weapons, our vision of a Korea that stands as one may not be reached quickly. But from this day until then, and all the days that follow, we take comfort in knowing that the security we seek, the peace we want, is closer at hand because of the great alliance between the United States and the Republic of Korea—and because we stand for the dignity and freedom of all Koreans. And no matter the test, no matter the trial, we stand together. We work together. We go together.

Katchi kapshida!

Thank you very much.