Wed, Oct 28, 2009 page8

• US-China relations remain crucial

  • By Sushil Seth
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  If one were to go by the apparent bonhomie in US-China relations since the administration of US President Barack Obama came to power, it would be fair to surmise that there has been a significant shift in US policy toward China in favor of cooperation and collaboration.

  However, this is only part of the story.

  An important shift in the US stance toward China was made clear during US Secretary of State Hillary Clinton’s China visit, when she asserted that the US’ concerns about Beijing’s human rights record would not derail progress in other areas. Beijing greatly appreciated this.

  China was also encouraged by Obama’s inclusion of two Chinese-Americans in his Cabinet: Secretary of Energy Steven Chu (朱棣文) and Secretary of Commerce Gary Locke (駱家輝). This, however, is a double-edged sword because Beijing believes that Chinese ethnicity should transcend all other loyalties for overseas Chinese, and that they should serve the cause of the motherland and its communist political order.

  This was bluntly articulated by Wang Zhaoguo (王肇國), a Politburo member and a former head of China’s United Front Department, at the Eighth National Congress of Returned Overseas Chinese and their Relatives. He reportedly congratulated them for using “blood lineage,” “hometown feeling” and “professional linkages” to achieve “outstanding results in uniting the broad masses of overseas Chinese.” Such calls on overseas Chinese to put their ethnicity before their citizenship can be counterproductive because it raises the specter of a “fifth column.”

  However, the Sino-US bilateral relationship appears to be going through a honeymoon phase. This was demonstrated when more than 250 senior Chinese officials descended on Washington in late July for their annual Strategic and Economic Dialogue. In his opening speech to the meeting, Obama highlighted the importance of the US-China relationship when he said: “The relationship between the United States and China will shape the 21st century.”

  The US and China are seen in some quarters as a “bi-umvirate” in managing the world economy. Emphasizing convergence in their respective responses to the global economic crisis, US Deputy Secretary of State Jim Steinberg said: “I think it’s demonstrated that there is no de-coupling, that we need each other.”

  During her visit to Beijing, Clinton expressed her appreciation of China’s investments in US treasury bills and bonds. China is now said to be the country’s biggest foreign creditor.

  What has happened so far, however, is simply a change in atmospherics, without any substantive improvement. Take the question of trade imbalance, with China stockpiling billions of US dollars. During last year’s US presidential election, Obama accused China of manipulating its currency to gain an export advantage, costing jobs in the US. In the new atmosphere, Washington no longer uses the word “manipulation” of currency. But the Obama administration maintains that the yuan is undervalued. In other words, the huge trade imbalance and the billions of dollars in currency reserves that China continues to accumulate remains a serious issue.

  Then there is climate change. While China makes a lot of noise about controlling carbon emissions in the future, it is not willing to accept binding cuts. This could develop into a very serious issue if carbon emissions control legislation, which is being developed in the Senate, were to impose tariffs on products from countries such as China that do not accept binding cuts to their emissions.

  However, the US wants China’s support on some contentious international issues. For instance, Washington hopes Beijing will agree to new sanctions on Iran if they are deemed necessary. While Beijing supports nuclear nonproliferation and Iran’s inclusion in it, it is not keen on UN Security Council-mandated sanctions.

  Indeed, China hosted an official visit from Iranian Vice President Mohammad Reza Rahimi only a few days ago. The Xinhua news agency reported that Chinese Premier Wen Jiabao (溫家寶) commended the progress in Sino-Iranian relations at a meeting with Rahimi. Even with existing sanctions in place, two-way trade between China and Iran rose 35 percent last year, to US$27 billion. And in the last five years, China has reportedly signed about US$120 billion in oil deals with the Islamic republic.

  North Korea, though, has become an area of shared concern. Washington relies heavily on China in persuading Pyongyang into giving up its nuclear ambitions. Despite Wen’s recent visit to North Korea, the latter remains obdurate, and Beijing is not willing to bring down the regime in Pyongyang for fear of a flood of refugees into China. Beijing’s political leverage is limited. Therefore, US reliance on China to reign in North Korea seems as unproductive as any other course.

  Even though political rhetoric on China sounds quite positive, there is considerable concern about its rising military power. Lately, there has been a panic of sorts in US military circles over China’s development of a “killer missile,” believed to have “the range of a ballistic missile and the accuracy of a cruise missile,” to target US aircraft carriers.

  Vice Admiral John Bird, commander of the Seventh Fleet, is worried.

  “Challenged with that threat, you might adjust your approach, but that is a far cry from making carriers obsolete,” Bird said in Sydney.

  He does think that China’s naval capability “has grown much faster than any of our predictions.” And many of these new capabilities “are intended to counter” the US Navy with weapons systems “targeted to our carriers and larger ships.”

  Referring to some provocative naval incidents that recently occurred in the South China Sea, Bird said: “They [China] have made it clear they consider the South China Sea to be more or less theirs.”

  And he is quite right because China passed legislation in the 1990s to assert that claim. The South China Sea is therefore likely to become the testing ground of China’s maritime power.

  Basically, “the Chinese would like to see less of the Seventh Fleet in this part of the world,” Bird said.

  He said that China ultimately aimed to displace the US in the Pacific. In other words, despite all the recent political bonhomie between the US and China, the inherent logic of an eventual naval showdown at some point in the future is hard to ignore.

  Sushil Seth is a writer based in Australia.
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