Before Obama was elected, the Chinese made enthusiastic contact with his policy team. Since his election there have been numerous and close exchanges at the top level. This has made an important contribution to a good beginning in the Sino-American relationship under the new US administration.
As President, Obama has been a vigorous promoter of ‘smart power’ diplomacy. An important manifestation of this approach has been Washington’s engagement in multilateral relationship building. This will allow the Sino-American relationship to develop under a more substantive cooperative framework.
The gap between Chinese and American power has been reduced, providing the material preconditions for a more equal bilateral exchange. Especially after the Olympic Games, the success of China’s model of development is increasingly apparent. Comprehensive national power is on the rise and China’s growing military and defence capabilities were showcased by the national day military parade in October 2009.
Simultaneously, the global financial crisis damaged the United States’ financial position. US economic recovery depends on rapid economic growth in China and cooperation from Beijing. US interests in China have increased as a result and Beijing’s crisis management skills which have earned Beijing credibility in the eyes of Washington.
Yet despite promising beginnings under the Obama administration, there are still many problems in the relationship.
The first is trade. With the global financial crisis as the pretext, American protectionism is showing signs of revival. There are increasing instances of trade disputes, and the overall trade environment is deteriorating. Human rights issues are a long-standing political problem plaguing the relationship. Different perspectives on Tibet and democracy are unlikely to be resolved soon.
US concern over Chinese military power is also increasing, and pressure for military transparency is growing. Issues of climate change, alternative energy sources, and disputes over emissions reduction and responsibility sharing are pervasive.
The United States used the ASEAN regional forum in July 2009 to publicly announce that its return to Southeast Asia was politically motivated. The US also worries that the active promotion of East Asian regional cooperation could lead to it being excluded from this process of regional integration.
Finally, there is Taiwan. Although China and the US engaged in limited cooperation on containing the radical Taiwanese independence movement, this issue continues to be a crucial challenge in the bilateral relationship.
The US has come to realise that its strategic clout has declined as a result of diplomatic blunders and the financial crisis. Domestically, Washington is trying to use the development of alternative energy sources as a new economic growth point. It is also attempting to build a more equitable society through a national medical insurance scheme and to regain America’s position as the leading financial power by reforming the financial services sector. Internationally, it is using ‘smart power’ to outsource its responsibilities and to use mechanisms such as engagement, listening and negotiation to enlist support for American policies.
China is one of the principal targets of ‘smart power’. Sharing international responsibility will be a point of difference between the two countries. Nevertheless, China is not yet prepared to share responsibility with the US. The collective conscience of the Chinese public and elite is that China is still a developing country and sources of most major concerns are still of domestic origin. In the foreseeable future, Chinese foreign policy will still be largely defensive in nature. Its goal is to create a stable international environment in order to resolve domestic issues and it has no intention to engage in ‘territorial expansion’. In the creation of a new international order, the dispute over the sharing of responsibility will be the biggest source of conflict between China and the US.
Though there are still numerous problems, the Sino-American relationship is maturing quickly. There are many ‘stabilisers’ in the relationship which provide a secure basis for its medium-term development.
Objectively speaking, China and the US share many common interests, bilaterally, regionally and globally. Bilaterally China and the US are each other’s second largest trading partner. Though there are frictions in bilateral trade, the sheer volume of trade between the two countries demonstrates the level of economic co-dependency and common interest they share.
Regionally, China and the US share common interests in the resolution of the North Korean nuclear crisis, the stabilisation of Asian financial and economic orders and security in the East Asian region.
In terms of American global strategy, China is at the lower end of the priority list of problems that need attention and ranks highly as a cooperative partner. The US needs China’s support in countering foreign policy challenges. This new framework of the relationship undoubtedly contributes to the stability of Sino- American ties. This is the context in which the US upgraded the importance of the Sino-American relationship in its overall diplomatic strategy and confirmed it as the most important bilateral relationship in the world.
The countries have initiated over 60 dialogue and negotiation platforms covering virtually all problem areas. The one that captures the most attention is the Strategic and Economic Dialogue mechanism. The success of the inaugural dialogue laid the foundation for future strategic communication between the two countries and contributed to mutual confidence building. Institutionalising the bilateral relationship should help to quickly resolve contentions and prevent overall damage that problems in a particular area may otherwise cause.
Jin Canrong is Professor and Dean at the School of International Studies at Renmin University, China. He is a visiting professor at the Gerald Ford School of Public Policy, University of Michigan, and the ‘Weilun’ Chair Professor at Tsinghua University.
This does not read like optimism to me. It is more like condescension, stuffed with references to rapidly diminishing US economic, political and military power.
Its purpose seems to be to demonstrate that that Beijing holds, or soon will hold, the whip hand in the relationship. Bizarrely, there is no mention of Chinese threats of retaliation over US arms sales to Taiwan, the Google affair, internet censorship, Iran’s nuclear programme or any other of the many bilateral friction points that have arisen in the past few weeks – apart, of course, from US “protectionism”.
While issues related to human rights and Tibet will be a rhetorical topic between the two countries, they are unlikely to be real obstacles between optimistic and practical relationships between China and the US.
The issue of Taiwan, especially the US continual sales of arms to Taiwan, can become a more and more serious obstacle. This is likely to escalate further in the future as China becomes more confident internationally.
There are two more immediate big issues that are extremely challenging but there should be some practical ways for them to be resolved if common sense and rationality prevail on both sides.
They are climate change and exchange rates.
For the climate change issue, a rational solution is to adopt a fundamentally market based approach, that is, the principle of polluters pay at the world level, not just inside a country.
For the exchange rate issue, the difficulty lies in the huge Chinese official holdings of the US government bonds. The US has been demanding the Chinese to allow the RMB to appreciate. An appreciation not only affects trade flows, but will have a direct adverse impact on the value of the Chinese official holdings of those US government bonds.
This presents a real dilemma for the Chinese government, especially in an environment of increasingly domestic dissatisfaction over some reforms and rising inequality. Many young people, especially university graduates and students, are increasingly questioning some government policies. If some web opinions are a guide, allowing the RMB to appreciate would be regarded as devalue the Chinese assets, nothing short of treason behaviour.
The Chinese government is really caught between the strong pressure from the US and the increasingly dangerous domestic oppositions.
However, there should be some way out of this dilemma which may require the US to guarantee the real value in Chinese currency of the Chinese official holdings of the US government bonds. If an agreement is reached on that, then it will clear the main obstacles for some sort of decoupling of the Chinese and the US currencies.
So both issues are important and challenging. But there are reasons to be optimistic they can be resolved strategically, as long as common sense and rationality prevails.
Taiwan is a province of China just as Hawaii is a state of the US. The actions of the US selling arms to Taiwan is to encourage the independence of Taiwan from the motherland, China. The US would not want China to do the same to promote Hawaiian independence.