“US-China Economic Relations Revisited” | China Research Center Founding Director Dr. Penelope Prime | March 22, 2022

Dr. Prime is a retired professor of economics and international business at Georgia State University.  She told the Club it was important to remember that the U.S. and China have had a long-standing good relationship with mutual interests as we enter a period now where both countries have more concerns about each other.

“We’re in a new economic reality…where there has been diminishing returns from our continuing trade relationship.  I would argue it’s really about competition over innovation, with diminishing returns from trade but increasing returns from innovation.  Innovation is harder to predict and for some of the key technologies we are both right on the frontier.  Some of the competition is really intense and some of those frontiers have military, dual-use as well,” Dr. Prime said, coupled with a “new political reality” of mistrust & competition.

She’s been watching the relationship from its beginning.  She was one of the first American graduate students allowed to enter China to conduct research after President Jimmy Carter normalized relations in 1979.  Over her career, she took more than 400 students to China for study.  Fluent in Mandarin Chinese, her past assignments include teaching economics at both U.S. and Chinese universities and the Ministry of Economics in Taiwan. 

Dr. Prime’s address included a “view from China” on how the country has rapidly changed in terms of freedoms and market reforms, how the U.S. has changed its approach to the Communist-regime over the years, and how she sees the U.S.-China relationship going forward in terms of what both countries want.  “I don’t have any silver bullet…we need to keep the benefits of cooperation greater than the costs of not cooperating.” 

She faced some tough questions from Club members, including how an American democracy can deal with a dictatorship that uses subterfuge and wants to dominate the world.  “I wouldn’t start with the assumption that China wants to dominate the world, I don’t think it’s helpful,” she replied.  “Really where the story is, is domestically within China and we need to see how that plays out.”