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Can ideas and literature from the Song Dynasty help us understand how to break open the Chinese market of the twenty-first century?
Ira Kasoff's career moved him from studying Chinese intellectual history at Princeton to interpretation work in Beijing in the 1980s to joining the U.S. Commerce Department serving multiple tours in China. In that position and back in Washington as the deputy assistant secretary of commerce, Kasoff was on the front lines of opening up the Chinese market to U.S. exporters -- a market he contrasts with working in Japan in the middle of his China positions. Kasoff brings decades of experience to answer the age-old question of diplomacy and dealing with China: do big ceremony-laden dialogues between the United States and Chinese governments yield results?
James Green: Welcome to the U.S.-China Dialogue Podcast from Georgetown University. This podcast series explores diplomacy and dialogue between China and the United States during the four decades since normalization of relations in 1979. We'll hear from former ambassadors, cabinet secretaries, and White House advisors -- who will share how they shaped the course of the most complex relationship in international diplomacy today.
I'm your host, James Green.
Today on the podcast, we talk with Ira Kasoff. Ira's academic and government career reflects the budding relationship between the United States and China -- or perhaps a return of that relationship after decades of war and estrangement. Ira was among the first group scholars permitted to go to the Mainland in 1979, and after finishing his doctorate at Princeton on Song Dynastic intellectual history, Ira had a string of interesting jobs in China before joining the Department of Commerce to help promote U.S. exports. From that position, Ira participated in scores of bilateral commercial and trade dialogues between the two governments aimed at opening up the Chinese market.
Perhaps the master of the bilateral dialogue format on the Chinese side was then-vice premier Wang Qishan -- now Vice President and a close confidant of President Xi Jinping. Back in 2008 during a US-China Strategic Economic Dialogue he injected a moment of levity, tinged with Chinese humility; speaking through an interpreter courtesy of C-SPAN:
Wang Qishan: (thru Interpreter) My finance minister is sitting right down there. And I told him to look at Hank Paulson -- he's really got a fat wallet. You are also the finance minister of a major country, but there are two different big countries: the U.S. is the real superpower, but you are not. So big country and superpowers -- they are not the same concept.
James Green: There is currently a reassessment of the utility of these once regular US-China diplomatic discussions, which grew to hundreds of officials in scores of meetings throughout the year. In the end, did they accomplish anything? Ira Kasoff has a view on that, having been involved since the beginning. But before getting to the fancy official banquets and the skyscrapers of Shanghai, Ira begins our conversation about the grim realities of China in the late 1970s with monochrome grey uniforms and fistfights in the streets.
Ira Kasoff, thanks so much for taking time to talk about your long experience working on China. I wanted to just start by asking how you got interested in China in the first place and your, first visit to China, maybe to work on your dissertation and what that was like.
Ira Kasoff: Thank you. It's good to see you again. How I first got interested in China is kind of a long story, but I won't subject you to the whole, to the whole history. But when I was an undergraduate, I was kind of switching around from one thing to another, and during my sophomore year at Harvard, I had taken a couple of classes on China. One, what they call rice paddies, an introductory course on China, and then one, a course by, Ezra Vogel.
And I decided that was pretty interesting, and before my junior year, I needed a new major. So I set up, and in those days, you could set up your own major if you had faculty approval, so I, and the only thing they had at that time in this field was what was called East Asian languages and literature. I wanted to do more history and politics, and also that major required three years of language, and I only had two years left. So I set up my own major, called, East Asian studies, which had two years of Chinese and politics, history, and so forth.
And I liked it. And, so one thing led to another. I decided to continue. I went off to Taiwan and studied, intensive Chinese at the Stanford Center in Taiwan. While I was there, I applied to graduate school. Came back and, entered the PhD program in Princeton. And as I say, kind of just continued to follow along one step at a time.
James Green: So, you got your PhD-
Ira Kasoff: Oh, and you wanted me ... Sorry. You wanted me to talk about my year at Beijing University, right?
James Green: ... Your impressions of ... yeah. Yeah.
Ira Kasoff: Yeah. So I was very lucky. I was, I got a grant to be part of the first group of students and scholars that were sent to China in 1979 when we reestablished diplomatic relations. And that was quite, quite an amazing experience on many, many levels.
I remember, actually, going across on the train from Hong Kong up into Guangdong and just being so excited, because before that, we couldn't go to China. I remember earlier, probably about six years before, being at Hong Kong and going up to the border and kind of staring across and imagining what it was like there.
James Green: Because you had been in Taiwan, so you-
Ira Kasoff: ... I had been in Taiwan and ... yeah.
James Green: ... You had been in the region but not in, in Mainland China.
Ira Kasoff: Yes. Exactly. And finally getting to go into China and going through the first train station, first big train station, which I guess was Guangzhou, and seeing these young women with uniforms standing there very erect, and everything was very neat and very orderly. And I thought, "Boy. This is pretty exciting."
And then I ended up at Beida for a year, Beijing University. And it turned out that China actually was a pretty grim place.
James Green: (laughs)
Ira Kasoff: ... And it didn't take me too (laughs) too long to, to figure it out. And it was interesting, because it was, it really, I didn't realize at first, but it was a kind of, in some ways, sort of sensory deprivation. There were no colors. Everybody was wearing, you know, either gray or blue. Not much sound. People didn't talk much, and when they did, they talked very quietly. This was only, mind you, three years after the end of the Cultural Revolution-
James Green: Wow. Mm-hmm (affirmative).
Ira Kasoff: ... So people were still very careful about what they said, what could be overheard.
James Green: And were they careful talking to foreigners, do you feel?
Ira Kasoff: ... Not just foreigners.
James Green: Mm.
Ira Kasoff: I mean, even among themselves, because you never knew who was going to inform, you know, and, and so forth. It was still kind of a, kind of a weird, weird place. And of course, billboards everywhere talking about, the Gang of Four and, you know-
James Green: Wow.
Ira Kasoff: ... The overthrow of the Gang of Four.
James Green: Mm-hmm (affirmative).
Ira Kasoff: And so a very different, different world from today. And in fact, the biggest culture shock that probably I ever had in my life was midway through that year, so probably January of 1980, I went, between semesters, I went to Japan to, Tokyo. And Tokyo in 1980 was probably more advanced than the United States, and flying from Beijing to Tokyo, I felt like I was in a time machine and had been shot forward 50 years.
James Green: (laughs)
Ira Kasoff: I mean, it was (laughs) and it was just mind blowing, experience.
James Green: Did they have vending machines where you could get, like, food out of them?
Ira Kasoff: ... Yeah. And just, you know, buses that, that, where the, like, when they're one stop away, there's an announcement exactly where they are, and what time they're going to be there, and then, you know, the whole ... I mean,
James Green: In pre-GPS terms. Yeah.
Ira Kasoff: ... And everybody lined up very neatly.
James Green: (laughs)
Ira Kasoff: Unlike in China in those days, when people would literally climb over the barriers to, to get ahead of, to get ahead of you.
And one anecdote about my time. We stayed, in those days, at Beijing University, they hadn't built any new dorms. Later, they built a new dorm for the foreign students. So we stayed, they designated two dorms, one for the men, and one for the women. Ershiwu and ershiliu, building 25, building 26. I still remember.
And the room was about as bare as you could get. Whitewashed walls. A fluorescent bulb sort of dangling, across then, a wooden, little wooden desk and so forth.
So my brother and his, his wife, my sister-in-law, had some parents of friends of theirs coming out on a tour to China, so they sent out a care package for me with, you know, instant coffee and peanut butter and all the things that they, that I couldn't get. So these people came. They were maybe late 60s. They got the tour guide to bring them out, and they come hauling up the stairs to my room with the, with the foreign handler, in tow, of course. And the woman comes in, and she looks around, and she says to her husband, "He must love his work." (laughs)
James Green: So I'm curious. Your dissertation is on kind of Song Dynasty thought.
Ira Kasoff: Yeah. Intellectual history.
James Green: How did, how did that come to be that that's what you focused on?
Ira Kasoff: How did that come to be? Well, when I was at Princeton doing my, my graduate work, I, Princeton does basically medieval and ancient Chinese history. They don't do modern Chinese history, as you, you may know. So it had to be something old. They consider anything after the Ming Dynasty to be journalism.
James Green: (laughs) Too modern, right?
Ira Kasoff: So I had one professor who was a specialist in Song Dynasty history, and I studied with him. And I, and I liked the Song. I thought it was an interesting period. I had another professor who specialized in intellectual history, and I liked that stuff. And I had always, even when I was just studying Chinese language and studying in Taiwan, I'd always been interested in Confucianism and Taoism and so forth. So I ended up combining those two areas, and then it was just a matter of zeroing in on a dissertation topic. And I won't go into all the details, but that's what I ended up doing.
James Green: And were you able to, during your time at Beida, get access to materials? Or was it really just talking to this professor that helped?
Ira Kasoff: Not materials so, so much, but just, this man. Actually, he was already at that time in his late 70s and, of course, had been treated really horribly during the Cultural Revolution, as were most of the Beida professors. But he was back. a wonderful guy. And, as I said, we would meet every Friday morning for an hour, and I would, during the week, I would sort of collect all my questions, from the texts that I was working on and bring them in. And we would discuss them and so forth,.
James Green: So he helped guide your research.
Ira Kasoff: Yeah. Yeah. Exactly.
James Green: So you, you get your PhD, and then you were doing some, we were just chatting a little bit earlier, some other sorts of work with the National Committee and, trading company.
Ira Kasoff: Right.
James Green: Did you interact, at that time, with any Chinese officials or was it, mostly, business people and, kind of academics?
Ira Kasoff: Well, some of all. When I was at, I first worked at the National Committee on U.S.-China Relations after, getting my PhD, so I was based in New York. And what I was doing mostly was handling delegations that the committee was bringing into the U.S. So I would travel with them as escort interpreter, as it was called. And, so through that, I mean, I would be on the road with them typically three weeks or a month.
James Green: Wow.
Ira Kasoff: And develop good relations. And by that time, I had been certified as an interpreter. My Chinese was quite fluent, and, and I, you know, had, having lived in China and maybe the kind of personality I have, the Chinese people kind of like me. (laughs) And so I would, you know, have good, good ties with them.
But generally speaking in those days, each group would have at least one kind of Communist Party handler, and it wasn't very hard to figure out who that was. And so even with those groups, you know, there was a little bit of kind of like what I was saying before about how people were talking carefully in China. You know, it wasn't quite like that, but they were aware that, you know, that they had to be careful. And I was lucky that nobody tried to defect on any of my groups, which happened quite often in those days.
And then following that, I went to work in Beijing, for a U.S. company called Fuqua, which was a trading company. So I was, getting products manufactured in China, consumer products, basically, for export to the U.S. So there we were working, or I was working with, I guess you could call them officials. I mean, they were most, they worked for the state owned, state run import export corporations.
And the factories were kind of under their control. And then sometimes I would work directly with the factories, and, you know, all around the country. But again, I had good relations with them. I mean, don't forget, in those days, the big directive from the central government was to try to earn foreign exchange, earn dollars for the country, and that's what we were helping them do. So, so we were in favor. So we were, they were sort of predisposed to like us and so forth.
James Green: And then you had to deal with getting the products to a port to get to the U.S.?
Ira Kasoff: Yeah. And we also had to. It was very complicated because in those days, there were a lot of things that China couldn't do yet, so we would have to bring in, for example, packaging from Taiwan. And then in a lot of these things, they were designed to come out of the crates and go directly onto shelves in stores. And so a lot of times, they would have to have, like, a little hole in the plastic bag to be put on a, like a, what do you call that? A hook? Not a hook.
But a rack. And they would have, typically, an insert, a picture of the product and some happy Americans using the product. And so coordinating all of these things, you know, stuff from Taiwan, stuff from Hong Kong, all being sent to some factory in, you know, Heilongjiang Province was quite complicated.
And then sometimes they would do things that would just boggle your mind, like they would put the grommet, it's called, the hole here at the top. And then they would put the inserts upside down, because they had no conception of how, how this was going to-
James Green: Of what a store actually looked like or people.
Ira Kasoff: ... Yeah. What a store. How this worked. And so we would, we would discover that we had 60,000, you know, sleeping bags packed in these tight plastic bags with the hole on the top and the insert facing (laughs) backwards, or facing down. (laughs)
James Green: Yeah. When I was, this is many years later, an English teacher in, Wuhan in the early '90s.
Ira Kasoff: Mm-hmm (affirmative).
James Green: I remember, Wuhan's a city of, I don't know, 10 million people, 14 million people.
Ira Kasoff: Yeah.
James Green: I remember going to the one store that was quote, unquote, self service. Where you could get a shopping cart. Get things off the shelf-
Ira Kasoff: Right.
James Green: ... And then pay for it at the end.
Ira Kasoff: Right.
James Green: All the other state owned stores, department stores, there was someone at the counter. You would ask and say, "Oh. I'd like to see that purple sweater."
Ira Kasoff: Right. Right.
James Green: And then they would give you the purple sweater.
Ira Kasoff: Yeah.
James Green: You'd say, "Oh. I don't want the purple one. Give me the red one." You'd have to hand it back to them and they'd give you the other one.
Ira Kasoff: Right. Right.
James Green: So this concept of, like, self shopping, of taking things off the shelf yourself and not paying for it 'til you leave just was not so ingrained at that moment.
Ira Kasoff: But in the, earlier than that in those stores, you would see things in the window. Like, in the, let's say, in the cold, you needed a down jacket. You'd see a nice down jacket in the window, so you'd go in and say, "I want to buy that down jacket." They'd say, "Oh. We don't have it." And you'd say, "Well, why, why do you have it in the window?" They'd say, "Well, we had it once." (laughs)
James Green: (laughs)
Ira Kasoff: You know, or we know how to make it. (laughs) It was the same in restaurants in those days. You'd go in. They would have the menu on a chalkboard, and you'd say, "Okay." This is in Beijing in, you know, in 1980s. Okay. I'll, I'd like, you know, this one, this one, and this one. They'd say, "Well, we don't have this one, this one, or that one." And finally, you'd say, "Well, what do you have?" And the answer would be, "Cabbage," because that was all they had for most of the year-
James Green: (laughs) In the winter.
Ira Kasoff: ... In Beijing. And then you'd say, "Well, why do you put all those other things on the (laughs) on the blackboard?" And they'd say, "Well, because our chef knows how to cook those if we just had the ingredients." (laughs)
James Green: (laughs) So then in, 1985, you joined the Commerce Department in the Foreign Commercial Service.
Ira Kasoff: Right.
James Green: What was the, the impetus and what made you excited to do that?
Ira Kasoff: Well, I mentioned, I think, maybe before we were recording about, some of the interpreting I had done when I was finishing up my dissertation and how I really found government work to be pretty interesting.
And while I was living in Beijing working for this trading company, I became friends with Sandy Randt, who later became our ambassador. We were sort of tennis buddies, among other things. And at that time, he was working in the U.S. Embassy as a commercial attache, a kind of a, they had one lawyer who, in the commercial section.
And he kind of suggested to me that I consider joining, or trying to join the Commercial Service. And it seemed very intriguing, and I had to go through a bunch of tests and so forth, kind of equivalent of the Foreign Service exam. But that was why I decided to do it. And, it was fun.
James Green: And FCS was only set up a couple of years before you joined, right?
Ira Kasoff: Right. Right. I was the second commercial officer in Shanghai, actually.
James Green: Wow. And so then your first posting in China was in-
Ira Kasoff: That was, was in Shanghai.
James Green: ... Shanghai.
Ira Kasoff: Right. Yeah. In 1985.
James Green: And that's when it was in the consulate, so were you in the barn in the back? Or were you in the big house?
Ira Kasoff: (laughs) That's, that's interesting. I don't know how well you know that structure, but, for those listening who don't know, it's a big, beautiful old house that belonged to a Qing Dynasty minister 100 years before. So at that time, the whole consulate, we only had, I think, 14 Americans. It was a very small operation. And everybody was on that site.
But we, the commercial section, which consisted of me, one kind of commercial assistant, a secretary, local secretary, and a driver. Four people. We were in this kind of converted garage off to the (laughs) off to the side. That was, that was our office in, in those days.
James Green: And at that time, what was the level of interest from U.S. companies and what was your interaction with Shanghai officials or officials. You must have had the whole kind of consular district, so Zhejiang, Jiangsu.
Ira Kasoff: Yeah. Yeah. Right. I had the whole consular district, which was those, what, three provinces, plus Shanghai. So there was already, a group of, either American business people or Chinese people representing American companies, but pretty small. So we would, for example, we would do a briefing in the consulate, in the main building, the consulate general and I, for the American business community, which we defined, as I just said, either the Americans or the Chinese representatives of American companies, and the whole group could fit in the living room there, probably about 30 or 40 people.
But I had a lot of interaction with them, because, I was kind of their main outlet for dealing with problems that would come up, and all kinds of crazy problems would come up in those days. Arbitrary decisions by some Chinese bureaucrat, you know. Suddenly some fees were being imposed for no reason or, oh, no, you can't hire this person, or just whatever. And they would come to me because they didn't have any other way to address this.
And I had, I had developed good relations with these Chinese officials. I was one of the few diplomats in Shanghai in those days who spoke Chinese, and, so I, you know, knew a lot of the guys. The main counterpart that we dealt with in those days was, it sounded like something out of a James Bond novel. It was called SMERT. The Shanghai Municipal Foreign Economic Relation and Trade Commission.
So I knew those people quite well. And, you know, some of these, some of these issues would, would just make your hair stand on end. So I would go see them and try to take these up and, help the American companies.
And then we also were getting already a fair number of people coming, American companies coming to sort of feel the water, you know, test the waters and see whether they could do something, and if so, how to do it. And so we'd spend a lot of time with them giving them kind of the lay of the land and giving them advice and so forth.
James Green: At that time what would you say the level of naivete was? Was it, for the folks who ended up coming to Shanghai to talk to you, was it a lot of people who thought, "If I just sell one T-shirt to every Chinese person, I'm going to be rich?" (laughs)
Ira Kasoff: Sure. There (laughs) there was -- there's always been a lot of that. And, and probably still is today, although maybe not so much today. But, yeah. There was, there was certainly a, a lot of that, although if they had, if they spent a few days there, they were pretty quickly disabused of any notion about how easy this was going to be and, and, and so forth.
But we would, you know, we would try to start with kind of a general briefing about what's going on and then maybe try to hook them up. There were a few local consultants who were working with foreign companies, at that time, and so we would try to maybe introduce them to them and, you know, they, obviously, they needed some local help to do business in China in those days.
James Green: So then you did a fair amount of, other postings through FCS. And you returned to Shanghai. How many years later would that've been?
Ira Kasoff: Almost, almost 20 years.
James Green: Almost 20? (laughs)
Ira Kasoff: I was, I was there the first time from, 1985-87, and then I was back from 2004 to 2007. Oh. I want to, I want to mention one more thing, which actually, for your benefit. One of my accomplishments in, Shanghai the first time around was to help get the Amcham started. We, my memory is that we convened a meeting in my office. It may not have been in my office, because my memory is not 100% sharp, but I, it, at least in my memory-
James Green: We'll claim it. Yeah. That's what's important. Yeah.
Ira Kasoff: ... Yes. In my memory, we had the meeting in my office, and there were about 10 or 12, Americans or sort of reps of big American companies. And we decided the time was ripe to do this. And so then it fell to me to go to SMERT, the Shanghai government, basically, and say we were going to set up an Amcham.
And the head of SMERT at that time, I had gotten to know him quite well. He was quite a good guy. He had done a tour of duty in San Francisco for SITCO, this Shanghai Investment and Trust Corporation, it was called. So he was, you know, pretty open minded and pretty sophisticated. And in 1980- early '87, which is when this was, was a relatively open period in China, a couple of years before Tiananmen. And so he said, "Yeah. Okay. Why not?" And (laughs) that was, and that was it.
James Green: Wow. Wow.
Ira Kasoff: So then, we had to help get a Chinese sponsor which became CCPIT, the China Council for the Promotion of International Trade. And then I left Shanghai shortly after, but the rest is history, including your employment there years later.
James Green: Wow. That's true. Wow. I knew you were involved, but not that much. It's amazing.
Ira Kasoff: Yeah.
James Green: So 20 years later, you go back.
Ira Kasoff: So 2004, I went back.
James Green: China had entered the WTO a couple of years before then.What was the, job like, and what was the city like in comparison?
Ira Kasoff: Yes. So the, I described, my working conditions the first time around in this kind of unheated converted garage with three Chinese colleagues. The second time around, as you probably know very well, we were in this fancy office in the Portman, which was a brand new, well, not even brand new then. It was actually started when I was there the first time, but a beautiful, new office complex. We had, in the commercial section alone, we had 25 people, including five American officers, as well as a couple of locally hired Americans and about 18 or so, local staff. So it was just a different world.
The consulate, by that time, I said before we had about, I think, 14 when I was there the first time around. By this time, I don't know exactly. I would guess they had probably about 150 Americans, something like that, it's so big that it was in several locations. I mean, we were in the Portman. The visa and consular section was in another office building. I think, the consul general and a few others were still in the original building. And then there were, there were a few other offshoots. I think there were five different locations by that time around the city, because we had gotten so, so big.
And, working in, of course, the foreign diplomatic community had changed. It was much bigger and they were also much more sophisticated than they had been 20 years before, as was-
James Green: Although still, very few people spoke Chinese, I'm guessing. (laughs)
Ira Kasoff: ... Yes, although more, more did than before. And as before, I was covering the three provinces as well as Shanghai, so Zhejiang, Jiangsu, and Anhui. So I traveled around the region, and the provincial and municipal local officials in those places had gotten also much more sophisticated than 20 years before. Like, it was like night and day, actually.
James Green: It sophisticated how? How would that manifest itself?
Ira Kasoff: Well, because they also, they were now, they had, most of them, I mean, Anhui probably less, but most of them already had, you know, a fair number of foreign investments, and they were used to dealing with foreign businesses and some of the issues that come up and, and so forth. And, you know, they were just more professional and it was a whole, a whole different ballgame.
James Green: So at that time, how do Chinese officials see you, do you think? I mean, you, you're a good Chinese speaker. You had spent, on and off 20 years in China.
Ira Kasoff: Right. Right.
James Green: How do you think that kind of investment early on in your career, was seen by Chinese officials that hosted you for these events?
Ira Kasoff: Well, I think, yeah. I mean, you know, I always wonder, actually, what my file looks like in China, because I was there in kind of academics. I was there in business. I was there in government. I was there later as a consultant, in all these different roles. And then my Chinese name. I have a Chinese name, but then sometimes they would use the alliteration and call me [Ka so fu] in, in Chinese.
James Green: Mm-hmm (affirmative). (laughs)
Ira Kasoff: You know? So I wondered whether they had somehow thought I was, like, six different people-
James Green: Think you're two people? (laughs) Right.
Ira Kasoff: ... Or whether they got all of this together.
James Green: The many disguises of Ira Kasoff. (laughs)
Ira Kasoff: Yeah. But, but I think, generally speaking, they liked me, and they, they saw me as someone who kind of understood China and understood their situation. They would always say that in Chinese. You've probably heard this many times, right?.
James Green: Mm. Mm-hmm (affirmative).
Ira Kasoff: Right? You understand our situation. They would say that all the time. And they would try to make their case on whatever it was based on the fact that I should be able to understand what they were, you know, what their argument was or what their situation was.
So, I mean, you know, I was representing U.S. interests, but I was able, in fact, to understand what they were saying and, you know, where they were coming from. And I think that was helpful in a lot of, in a lot of cases.
James Green: You were fortunate in some ways in not being in Beijing and not being in the capital city-
Ira Kasoff: Right. Right.
James Green: ... And not being kind of tied to the politics.
James Green: How do you think, and, and the officials down there at Zhejiang, Jiangsu, and Shanghai. Their economies were gangbusters for those 20 years.
How did you see, those officials there and what did you take away from their interaction with you? What, how did they see their role and their role to the U.S. government but also the role of companies there, in terms of their own economic growth for their province or for their town or county?
Ira Kasoff: Well, it, I mean, it's interesting, because in those, and particularly in the smaller cities, not necessarily, you know, the capital, like not necessarily Nanjing, but other cities in Jiangsu Province or in Zhejiang Province, they were, the local officials were fairly independent. I mean, they knew what the general policies were, and they were generally following them.
But their big thing was to try to attract business to their town or city. And so they would all, they were very competitive with each other. And they would all give you their pitch any time you went there. You would have to listen to their pitch about why this was the place where. And it was, you know, sometimes some really obscure thing that they had, you know. They were the 17th leading, what, producer of whatever. You know? But they all were basically trying to compete very aggressively for foreign business and foreign investment.
James Green: Well, let's move to your time as deputy assistant secretary, before getting to the specifics of the Joint Commission on Commerce and Trade or the other policy issues.
Could you just talk a second about what the job is like in the field helping U.S. companies on the ground with market access or taxation or some other problem versus-
Ira Kasoff: The deputy assistant secretary?
James Green: ... No.
Ira Kasoff: Oh. Oh. What it's like overseas-
James Green: And then when you come back to Washington and kind of what that job is like.
Ira Kasoff: Yeah. Yeah. Yeah. well, the first thing that's interesting about that is that you get a very different perspective from U.S. companies overseas compared to in Washington. The people who are overseas, at least by the, by the mid-aughts that, the second go around in Shanghai, they had been on the ground. They were doing business. They were generally making money. And they were generally pretty upbeat, although they would have a lot of specific problems, and they would bring those to you. But, you know, beyond the specific problems, they were fairly positive.
In Washington, you attempt to meet with the U.S. reps, the sort of Washington reps of these companies, and they were much more negative about China than their, than their counterparts who are out in the field. And it was, it was not just specific things, although they had specific things too. But it was more generally just general frustration about how difficult it was and how, you know, we needed to be doing more to level the playing field.
So it really was a kind of a, a different, a different environment than what I had been used to.
James Green: So on the Joint Commission on Commerce and Trade. How did you see that process? First talk about what it is, and then talk about what, what you saw it as trying to accomplish.
Ira Kasoff: So the Joint Commission on Commerce and Trade, otherwise known as the JCCT, actually had a pretty long history. In fact, when I was in Shanghai the first go around, I was peripherally involved with it. It went back that far. And I got pulled in as an interpreter at one meeting in Beijing when they, the person that was supposed to be doing interpreting couldn't make it at the last minute.
But when I was the DAS, I was really one of the kind of central figures in it. And, and we hosted. So what is it, first? Okay. So it's a major, a ministerial level commercial dialogue between the U.S. and China. So originally, it was a dialogue between the U.S. Department of Commerce and MOFCOM, the Chinese Ministry of Commerce, which is those days actually was called MOFERT, Ministry of Foreign Economic Relations and Trade. Later became MOFCOM. But it was, it was a ministry to ministry dialogue, that had a kind of a DAS-level dialogue and then ultimately ministerial, the Secretary of Commerce and the Chinese minister.
Subsequently, and so it was a dialogue basically intended to address commercial issues that both sides had with each other. Subsequently, it got elevated so that the U.S. side, in addition to the Commerce Department Secretary, the USTR was added as co-chair, and then the Secretary of Agriculture was added in this kind of nebulous non-co-chair role, but he was a participant. I think it was always a he, was a participant as well. And on the Chinese side, instead of the Minister of Commerce, it became a vice premier who was in charge of sort of foreign investment and foreign trade.
So the level of the JCCT was elevated. And by the time I was the DAS, it had also evolved to the point where we had a whole series of working groups. We probably had, I don't know, 12 or 14 working groups that met during the course of the year with different Chinese ministries. So, most, the Ministry of Science and Technology. The Ag ministry. The SFDA. The Food and Drug Administration. MOFCOM, of course. NDRC, National Defe- what's it called? National ... I can't remember what NDRC stands for. Anyway, the planning-
James Green: Development and Reform Commission. Mm-hmm (affirmative).
Ira Kasoff: ... The planning commission.
James Green: The old jiwei, huh?
Ira Kasoff: ... Yeah. (laughs) The old, the old jiwei. So we would, so those meetings, I was the U.S. chair for a number of them. Other people were, were chair for some of them. And those would meet during the course of the year and try to tee up and hopefully address specific issues for with each of those ministries.
And this would build to an undersecretary vice minister level meeting in the fall. and then that would basically pave the way for the final ministerial, which typically would take place later in the year. And before the ministerial, we would have a couple of meetings at my level, which meant me and my USTR counterpart, which originally was Tim Stratford and then later Claire Reade, meeting with the head of the Americas Division of MOFCOM and his team to try to hammer out what we called deliverables. What, what were we going to achieve at the at the ministerial?
And then we would have the actual ministerial itself, which would be, fairly scripted. So first, it would be a small meeting with the ministers and the vice premier, and, usually, like a plus three on each side. A limited number of people. And then, then it would go from there to the plenary, where all the, all the people and all the hangers on were, were included in that meeting.
And as I say, it was kind of scripted. I mean, they all had their, each, you know, the secretary, the USTR, the ag minister, the ag secretary, they had their talking points, as did their Chinese counterparts, but it would always get well beyond that as, you know, we tried to push for things that the Chinese wouldn't do, and the Chinese raised things that they wanted and so forth. So and sometimes it would get kind of heated.
But that was kind of the process. And, you know, we would typically get something. So one year, for example, the Chinese agreed to stop using pirated software on government computers, and then they followed that by agreeing to stop buying pirated software period. They also, one year, they liberalized all these very restrictive regulations on importing medical devices, which was a big issue for us.
One year they made some major changes in tourism, outbound tourism, which actually required us then to work with State on how to deal with this huge rush of applications for visas. But ended up leading to, you know, enormous numbers of Chinese tourists coming to the U.S. and spending, you know, billions of dollars in the United States.
So there were some accomplishments coming out of it. But, you know, over the years, especially towards the end and subsequently, you know, you start to think, "Well, given what we accomplished versus how much time and effort and, and money we spent on this, you know, was it really, was it really worth it?" And, you know, that's a complicated question.
Oh, one, a couple of other things on the JCCT, and then you may have some followup questions. But we, we had the 25th anniversary of the JCCT during my tenure, and so we decided to host it at the Nixon Library in California. And the Chinese loved it. There, there are among other things, there are all kinds of, exhibits there about the, about Nixon's trip to China. And there's a statue, I think of Nixon and Mao and Zhou En-lai, and all the Chinese senior officials went running over there to get pictures taken in front of that statue.
James Green: Sorry. Who was the vice premier? Who was the person at the time? Was it Wu Yi?
Ira Kasoff: I think it was Wu Yi. And then the, the infamous Madame Mao was the senior vice minister. They went running there to, uh (laughs) to have their pictures taken.
James Green: Wow.
Ira Kasoff: But then that, one other thing is that the, the JCCT, I mean, it was, I don't know if I've quite captured how complicated and time consuming it was. But it got even more so because of the SED which later became the S&ED, which I'll explain, but the Strategic Economic Dialogue, which started, I think, in 2007, I believe. Under the leadership of Hank Paulson, who made it a condition of his accepting the position of Treasury Secretary to be the top dog on China.
And so a lot of our issues got folded into the SED, and we had to work on both dialogues. And in, and the SED actually met twice a year, so it was, it was a basically nonstop all year round. And then at the beginning of the Obama Administration, and Jeff Bader may have talked about this, there was a lot of discussion about whether we should elevate the dialogue, and maybe the vice president should head up some kind of high level U.S.-China dialogue.
And in the end, the decision was made, instead of doing that, to change the SED to the S&ED and add the Secretary of State as a co-chair. So it became Hillary Clinton and Tim Geithner. And only once a year, thankfully. But, you know, that, that meant we in Commerce, basically, had to work on both of these dialogues. And a lot of overlap, although there was some distinction.
I mean, the SED and then later the S&ED focused more on financial issues, capital markets, insurance and so forth. And then on the strategic side, the State side, geopolitics and climate change and things like that. And ours was more focused on commercial issues, so there was some distinction. But certainly it became more complicated when the when they started that.
James Green: So you hinted at some of the ways that you interacted with Chinese officials. there were these working groups, and you would meet at your level with the director general level person at the Ministry of Commerce.
Ira Kasoff: Right.
James Green: What were those conversations like? I mean, how would you see most effective movement in whatever issue X is that, that an industry would bring to you? What did you find kind of worked in those interactions?
Ira Kasoff: I mean, what I always tried to do was, you know, sort of going back to your earlier question about, you know, how does the fact that I spent so many years working on China and studied about China, how did that, how did that affect what I did, or how did that help me? I would try to put, frame some of these things, because we would, we had a lot of demands.
The Chinese had their issues as well, you know. They wanted relaxation of export controls. They wanted certain agricultural products that we were blocking for health reasons to be allowed. They needed certain licenses for banks and so forth. But we had way more issues than they did, obviously.
So I would try to frame these issues to the extent possible in a way that would be, at least what I thought, in China's interest to do what we wanted to do. I would, I would try to kind of put myself in their shoes and say, you know, instead of saying, "You, you have to do this," and try to pressure them, which didn't work, if I were in their shoes, how would I see this? And what would make this more appealing to me to consider? And, you know, sometimes that worked. Usually not, but that's what I usually tried to do.
James Green: Yeah. I mean, you were there at an interesting time, end of the Bush Administration, beginning of the Obama Administration. A time when China had joined the WTO seven, eight years earlier.
Ira Kasoff: Right. Right.
James Green: And in some ways, MOFCOM hit its height during the WTO negotiations. And their ability to force things in the Chinese system kind of decreased after that.
Ira Kasoff: Right. Right.
James Green: I wonder. You were there during the financial crisis, 2008, 2009.
Ira Kasoff: Oh, man.
James Green: What was that like? Did you get a sense from the Chinese, that they had much less patience for what the U.S. had to say because of the financial crisis?
Ira Kasoff: To, to put it, to put it mildly. Yes. It's interesting, because we, we were actually having a JCCT ministerial when the Lehman Brothers collapse happened. I think it was Lehman Brothers. I remember, I think it was, Carlos Gutierrez was my boss, and Sue Schwab was the USTR. And there was a break, and we saw the news, and we saw this. It's like, "Oh, my God." Now, it didn't, at, in, at that meeting, it hadn't yet become a big deal, and it was really just the start.
But, at the end of 2008, which was the full blown crisis, after the last SED under Bush and under Hank Paulson's leadership would, was scheduled for Beijing, because remember, in those days, it was twice a year. It was once in Washington, once in Beijing. Was scheduled for Beijing in December of 2008, which was after the election. So the Republicans lost the election, so they were lame ducks. And a new team, the Obama team, was going to be coming in a month later.
So first, you have a lame duck administration that basically is one foot out the door, and you have a financial crisis where it's not clear whether the economy is going to survive or not. And it really was like that. I was in a meeting with, in Paulson's office when George Bush actually came in to discuss this, but that's, that's another story.
James Green: And the person who was the Treasury Secretary was deeply involved in U.S. capital markets for his whole career, and so the-
Ira Kasoff: ... Yes. Exactly. Exactly.
James Green: ... Chinese would have a view on kind of that aspect of American leadership.
Ira Kasoff: Yeah. So the bottom line was there was this whole discussion about whether we should go forward with that last SED, given all of this. The fact that they were lame ducks and the fact that the economy was in full meltdown. And, and Bush basically made the decision and told Paulson, "You guys should go ahead."
Now, my former boss, Carlos Gutierrez, in the end did not go, because he had been charged with bailing out the auto industry or not bailing out, saving the auto industry. So that was an excuse. I mean, everybody was looking for an excuse not to do it. So he didn't go. But I went. Our deputy secretary went in Gutierrez's place. And I went, and Paulson went, and the rest of, most of the other cabinet secretaries went, I believe.
But basically, we had to sit there and listen to Wang Qishan, who was the vice premier now, lecture us for the entire meeting about how, you know, you Americans have been telling us for all this time about how we have to open up our capital markets and do all these things, and look what you've done. You've basically destroyed the world economy, and, you know, you were our, once our teachers, and, you know, and on and on and on. And, and Paulson and the rest of us had to just sort of sit there and take it, because there ... You know, what could you say?
James Green: Mm. you mentioned Carlos Gutierrez. You then worked for Gary Locke, who was the Commerce Secretary at the beginning of the Obama Administration. First, Chinese American governor in the United States. First Chinese American Commerce Secretary.
Ira Kasoff: Right. Right.
James Green: One who had kind of incredible access in some ways as a governor. When he was governor. What was it like, that shift? I mean, it's in the middle of this financial crisis-
Ira Kasoff: Right.
James Green: ... And so it's complicated is an understatement, but, what was it like to work with him on China related things when he came into office?
Ira Kasoff: By the time he came in, he wasn't actually the first choice, if you remember. I think, what's, uh ... I'm drawing a blank. The governor of New Mexico, former governor of New Mexico. Bill, um-
James Green: Bill Richardson?
Ira Kasoff: ... Bill Richardson was, was supposed to be secretary, and then I think there was another one. And then it was Gary Locke, because the other two didn't work out. so it took a while for him to, to be confirmed and to come in. And by the time he came in, the financial situation had stabilized, although in a, you know, we were in a much worse state than we had been. But it wasn't, there was no longer a question of whether the economy would meltdown or not.
James Green: Anything else on the JCCT? I have a kind of broader question, but I also don't want to leave out if there's some other-
Ira Kasoff: Well, just in terms of, you know, sort of, kind of looking back, you know. Was it worth it? I mean, one, one thing that, that I do have to say is that, that, for the U.S. business community, it was, it was important, because it was the primary channel for them to get their issues aired, and then raised at a high level. I mean, when I was in Washington, they would, business people would come in to me all the time with their issues, and then I would raise them when I went out to China, which I did about every four or five weeks in those days.
But the JCCT was a much more formal mechanism for them to have their issues heard, and we had, so during the course of the year, I talked about all these working group meetings and all this stuff that we would do. We would also have regular meetings with the business community in the States, and ask them to bring their issues and prioritize their issues and so on, and try to figure out which ones we were going to try to put on the agenda with the Chinese.
So, you know, in sort of looking at whether it, this -- doing this for all these years with all these, all this money we spent and all the man hours and so forth, was it worth it? I think if you asked the business community, they would say, "Yeah. Even though the results were, you know, minimal, it was still worth it." Because it was at least a, a mechanism that they could then have to get their issues, brought up.
James Green: And I think one of the benefits that you had mentioned earlier, was it got you not just to the Ministry of Commerce, which were the kind of gatekeepers (laughs) in a lot of ways.
Ira Kasoff: Right. Right.
James Green: But also to these other regulatory agencies.
Ira Kasoff: Yeah. Well, I would meet with them on my trips to China, because a lot of the issues that companies would raise with me were not only MOFCOM issues, but, you know, SFDA or Ministry of Environment or whatever. So I would meet with those people, but yes.
One of the other benefits of the JCCT and the SED or S&ED was the relationships that people made with their counterparts. I mean, I was traveling there all the time, so maybe not so much for me, but for a lot of these secretaries and others, you know, they were meeting counterparts and developing relationships which they wouldn't have had otherwise. So that was another benefit of these dialogues.
James Green: Yes. I think that's when Hank Paulson came in, as you said, with this requirement that he would be the senior person on dealing with China. He, he saw the kind of counterpart to counterpart, matching up as an important part of that.
Ira Kasoff: Right.
James Green: So that we could-
Ira Kasoff: Right.
James Green: ... Kind of figure out what was going on in the other country.
Ira Kasoff: But having said all of that, if you want my kind of bottom line, you know, I'm not sure, I ... These dialogues don't exist anymore. Which may or may not be a good thing. I mean, I think it probably would have been good in, at the beginning of the Obama Administration, if they had tried to have a high level kind of Joe Biden led discussion and then more specific sort of ministry to ministry talks. And, you know, I mean, I can't imagine who in this administration would lead it on the U.S. side, but that sort of thing might be a way to go in the, in the future.
James Green: I think one of the challenges that the world is grappling with in where China is today, all these years, 17, 18 years after WTO accession is, it's kind of somewhere in between a planned and a market economy, and the WTO wasn't really set up to deal with that kind of economy.
Ira Kasoff: Right. Right.
James Green: It's a kind of regulatory state and a kind of state-led investment economy. You had experience working in Japan and other, other kind of Asian economies. How would you compare, if you can, the way that the regulatory state, which sometimes, in Japan as well, and Korea, with kind of direct investment and-
Ira Kasoff: Right. Right.
James Green: ... would pick winners and losers. How do those economies compare to China and what's, what was your experience like or your assessment of those places?
Ira Kasoff: Yeah. I worked a lot with Japan, and I had two assignments in Japan. I lived there for eight years. And then I also worked on it when I was the DAS. I didn't work so much with Korea, but, but I can talk pretty, fluently about Japan.
And we, we've had a lot of dialogues with Japan as well, especially in, in the early days. We had something called the MOSS talks, Market Oriented Sector Specific, I think it stood for. And those carried on. I mean, they were there in the early '90s. When I was back in Japan the second go around, 10 years later, they were still going on. When I was the DAS, which means from 2007 on, I chaired one of the MOSS talks, the med forum talk, so that's, like, 20 years after it, it started. So that had its own sort of, life cycle.
And in the early days, we had, a higher level dialogue called the SII. You may be familiar with that. Structural Impediments Initiative. Which was very interesting. It was, it was not ministerial. I think it was, the deputy USTR or, I believe the deputy USTR was the chair.
James Green: Or the assistant USTR, or it was a deputy?
Ira Kasoff: No. It was at deputy level. It was, like, vice ministerial on the Japanese side. And it was several ministries, so the com- the undersecretary of commerce and undersecretary, I think undersecretary of state and a few others who were involved. But it wasn't minister to minister.
But the idea there was to try to get at what we considered to be structural issues, preventing more U.S. exports to Japan. So for example, we tried to pressure the Japanese to keep their ATMs open beyond banking hours so that people could get access to cash and buy more U.S. products. We did these bizarre pricing surveys to try to demonstrate that prices of U.S. products in Japan were artificially high and that therefore they weren't being purchased as much by Japanese consumers as they should.
But this was, you know, sort of, also went on for a number of, a number of years. And I have to say, in those days, which means probably through the, certainly through the mid-90s, Japan was more closed, actually, than China. And most of our focus, the U.S. government focus, was on Japan. But little by little, the Japanese economy, really from that time, from the early '90s, was, started to stagnate, and China was just growing 10% a year. And so before too long, China completely overshadowed Japan in every way. The size of the economy, the size of the trade deficit, the, the volume of trade complaints and, problems and so forth.
So Japan opened up a lot, but people didn't care as much anymore. You know? As, as in the early days. But Japan in the early days, there was an expression. You were inside the castle or outside the castle. And they, they had very sophisticated ways of keeping new entrants out. And that doesn't only mean foreigners. That meant new Japanese companies as well. It really was kind of a, an insiders' game.
And so there, I was talking about the difference between sort of U.S. based business people and local based business people, but the contrast was the sharpest in Japan. People who were in the, in Japan. The Amcham was called the ACCJ, American Chamber of Commerce in Japan. They were pretty cool about Japan and about all these regulatory restrictions, because they were inside the castle. And they didn't care that others couldn't get in.
Whereas the people in the States were saying, that you know, "It's impossible to do business in Japan. You got to do something." So, but it really was more closed in more subtle and non, mostly non-regulatory ways, than China, actually.
James Green: Mm. Mm. In terms of barriers to entry and market access. Putting on your kind of historian's hat, you talked a little bit about Song Dynasty kind of openness, closed-ness. I mean, in some ways, where we are in China today is going kind of less open and kind of more closed. And so I guess I would just say, putting on a historian's hat, kind of where do you see where China is in this kind of arc of openness to closed-ness?
Ira Kasoff: Mm-hmm (affirmative).
James Green: I mean, you had mentioned the '80s was a time of a fair amount of political openness, relatively speaking. As well as interested in kind of learning and having foreigners participate.
Ira Kasoff: Right. Right.
James Green: Where do you kind of see that arc? And where do you see things going forward?
Ira Kasoff: Yeah. I mean, it, it's a hard question to answer. I mean, I think right now the trend is not good. It's hard to be optimistic in the, in the short term, and that's even leaving aside the tension between the U.S. and China and what's going on at the moment.
But just, on China itself. I mean, I think the Chinese Communist Party started getting very worried about its future prospects, let us say, five or six years ago. They had two general secretaries who were relatively weak and people started basically questioning, "Why do we need the Communist Party? I mean, we're now a modern country and we ..." you know.
So I think Xi Jinping has come in, and basically one of his big motivations has been to try to reassert the power and the primacy of the Chinese Communist Party. And so we see all the different kinds of repression and, things that he's been doing, since he's been in office. And so, you know, that sort of begs the question, is this, does this mean that he and the Chinese Communist Party are stronger, or weaker? I mean, is this a sign of strength, and, or weakness?
And to me, it's, it's a sign of strength in the short term. The fact that he can do all of this means that he's very strong. But it also, I think, longer term, it's a sign of weakness. I think they're doing this because they're scared of what might happen if they, if they don't do this.
And in terms of, you know, their relationship with the world, it's very complicated. I mean, there was, as you know well, you know, Bob Zoellick said many years ago, "We have to make China a responsible stakeholder" and pull China into all these international institutions and make sure that they have these strong vested interests in maintaining stability and being a good citizen and so forth.
You know, they are now in all of these institutions, and even in some that they've developed themselves, right? The new Asia Infrastructure Bank and, and then of course, they've got the Belt and Road Initiative and that. So they've gone beyond even these international institutions like WTO and, so on, and, and doing some of their own.
And they also are, you know, the world's biggest trading nation. They need international markets. At the same time, they are taking stronger measures, I would say, to foster domestic champions and, you know, particularly in the, they have this Made in China 2025. They're trying to really become world leaders in all these key, high technology industries.
And that, I think is one of the subjects that's being fought out between the U.S. China right now, but, you know, they for quite some time have been basically have had that in mind. I mean, they've opened up to foreign investment and foreign technology, but with the goal of developing, ultimately, Chinese technology and Chinese companies, and then they won't need the foreign companies anymore.
So it's kind of a, from their side, too, I think it's a delicate balance. They need foreign markets and access to foreign markets, but at the same time, they want to have, you know, world class Chinese competitors in all these, in all these key industries. So, you know, how all of this plays out is, it's really hard to predict right now.
James Green: So I've just got to ask one final question, as someone who was at Beida and as you said, when Beijing kind of first opened up to foreigners. Did you ever think, you know, 20, 30, 35 years later, the Beijing of today would, would, would be where it is? That is, the number of Starbucks on each corner or the connectivity of the place, compared to the grayness or blueness of the, of the late '70s, early '80s?
Ira Kasoff: Inconceivable. I mean, I think anyone who, who was there at that time who, who said they could've seen that coming would not be telling you the entire truth.
I just, I mean, the China of those days compared to the China of today is like two entirely different worlds. I mean, it's, it's just, it's astonishing, actually, what's, what's happened.
There was, by the way ... You may have seen this in Shanghai at the Planning, Museum. They had an exhibit of photographs taken in 1985 and then 20 years later by the son of the same photographer-
James Green: Yeah. I have that book, actually. Yeah. Yeah. Yeah.
Ira Kasoff: ... Oh. Yeah. The same spots. And I was living in Shanghai during both of those periods, and it's so interesting to see how those, all those places have changed. And you could probably do the same thing now and go back to those places.
James Green: Right. Another, right, another 10 years later. Yeah.
Ira Kasoff: Another, another, but I mean, the changes are just, are just mind boggling. And, and, yeah. I mean, when I was working in Fuqua, the trading company, in 1983, in those days, in order to hire Chinese employees, you had to hire through FESCO, it was called. The Friendship Employment Corporation or whatever it was.
James Green: I thought it was foreign. Maybe it's friendship. Yeah.
Ira Kasoff: Foreign. Yeah. Foreign. Anyway, you had to basically-
James Green: Foreign Employee Services Corporation. Yeah. Yeah.
Ira Kasoff: ... Yeah. You had to hire through them. And I think we paid them, and then they paid the employee a pittance.
James Green: Yeah.
Ira Kasoff: And we had this guy who, who came to work for us, a very sweet young guy. And he was probably making, I don't know, 100 Yuan a month or something. I mean, nothing. Many years later, I reconnected with him, when I was in Beijing. I can't remember. Maybe when I was the DAS. I can't remember it. But many years later. And, he was all excited that I was coming, so he came, and he picked me up in the airport in his car, which was a really nice car. Took me out to his apartment that he owned. And he and his wife and his daughter took me to dinner at a nice restaurant near their home. And this was a guy who was making, you know, maybe, maybe 20 bucks a month in the (laughs) in, in 1983. So ...
James Green: And then he was able to show off-
Ira Kasoff: Yeah.
James Green: ... How, how far he'd come.
Ira Kasoff: Yeah. Yeah.
James Green: Well, Ira Kasoff, so great to talk to you. Thanks very much for sharing your experience. I really appreciate it.
Ira Kasoff: My pleasure.
James Green: Ira Kasoff, speaking with me from Los Angeles. You’ve been listening to the U.S.-China Dialogue Podcast from Georgetown University. I’m your host, James Green.