The Foreign Service Journal, July-August 2019

THE FOREIGN SERVICE JOURNAL | JULY-AUGUST 2019 41 A merica’s Foreign Service officers are important voices for, and representa- tives of, our country abroad. Your hard work and diplomacy are vital to ensuring that America’s policies and priorities are understood by foreign leaders. I believe your work in China will be particularly important as the U.S.-China relationship will shape the geopolitical landscape for this century. I hope you find this article useful in considering this important bilateral relationship. m There’s a lot of finger pointing between Beijing and Wash- ington these days. It is important to understand how the United States and China arrived at this moment of heightened tension. The drivers of the current downward spiral aren’t complicated. Henry M. Paulson Jr. served as Secretary of the Treasury from July 2006 to January 2009. Prior to that, he had a 32-year career at Goldman Sachs, much of it dealing with China. From 1999, he served as chairman and chief executive officer of the investment firm. Today he is chairman of the Paulson Institute, which aims to advance sustainable economic growth, a cleaner environment and cross-border investments in the United States and China. An extended version of this article was presented by the author on Nov. 7, 2018, in Singapore at the Bloomberg New Economy Forum. To read the entire speech, visit http://bit.ly/Paulson-US-China. THE UNITED STATES AND CHINA AT A CROSS R OADS Statesmanship and creativity are needed as Washington and Beijing renegotiate a relationship that is too big to fail. BY HENRY M . PAULSON J R . FOCUS MANAGING COMPETITION WITH CHINA ISTOCKPHOTO.COM/MANATWORK First, we have diverging interests. On many issues where the United States and China should agree, such as North Korea, we often pursue divergent approaches. Second, the United States and China disagree about impor- tant rules governing the international system. One example is maritime rights and customs—which brought our navies into a near-collision on the high seas last September. Third, American and Chinese views are opposed in critical