|US, China struggle with mid-life
By Jing-dong Yuan
California - Beijing's highly charged, unequivocally strong
responses to United States foreign policy actions in recent months
have gone beyond past practices of mere rhetoric, setting the scene
for more trouble when disputes over trade, currency and the pending
Iran sanctions issue are added to the mix.
The first sign of
a fracture after a smooth and upbeat first year in Sino-United
States relations under the Barack Obama administration came at the
climate summit in Copenhagen last December, followed by the Google
controversy, the spat over cyber-space, the administration's
decision on arms sales to Taiwan, which was met with the threat of
sanctions on US weapons suppliers, and Obama's meeting with the
last month. Expected high-level exchanges, especially
between the two militaries, have been put on hold.
administration started its tenure
viewing the relationship with
China as one of its most important bilateral ties and cast the
relationship as cooperative, positive and comprehensive. There was
the visit by Secretary of State
Hillary Clinton in February last year; the Hu Jintao-Obama
acquaintance at the Group of 20 summit in London in April; the
elevation of previous sub-cabinet bilateral high-level and economic
dialogues into one strategic and economic dialogue at the cabinet
level; and the Obama visit to China in November.
frequency and level of bilateral high-level contacts was
unprecedented, as were the high (and perhaps unrealistic)
expectations of closer cooperation between the world's sole
superpower and its fast-growing runner-up. Just think about the
accolades of a Group of Two, Chinamerica, among others.
what went wrong? The global economic and financial crises have imposed significant
constraints on both Beijing and Washington, with major problems of
insolvency, economic downturn (for the US), and growing
socio-economic turmoil. The imperatives of stimulating economic
activities and keeping and generating jobs have become top
priorities for both countries. China in particular has become a
major factor in how the Obama administration handles its economic
challenges, including continued Chinese purchases of US debt.
The imperatives of domestic politics also find Beijing and
Washington reluctant to cede too much ground on issues related to
trade balances, currency evaluation and climate change - especially when dealing with them
requires sacrifices that neither side can afford and makes them
unwilling to adopt policies that involve short-term costs. Both
governments reacted negatively toward each other's perceived
buy-America/buy-China provisions in their respective stimulus
packages; neither was willing to make binding commitments to the
reduction of gas emissions at the Copenhagen summit.
has basically halted the gradual appreciation of the yuan, which has
risen 25% against the US dollar since 2005, then it initiated a
policy that in effect pegged the yuan to the greenback. While
Chinese exports have plunged in the past two years, Beijing's policy
of keeping its currency stable has enabled it to regain an upward
trajectory in exports, which have increased massively in recent
months. Understandably, this has been met with charges of currency
manipulation from certain quarters of the US government and
Economic conflict appears unavoidable
in the best of times in Sino-US relations, let alone when America
has been suffering an unusually high level of unemployment over a
protracted period, and when the control of congress by the
Democrats, whose electoral base is in organized labor and
manufacturing, is pressuring the administration to confront what is
seen as unfair trade with China.
But the longer-term and
broader implications of the current US-China spat and controversies
are the structural changes now taking place in the international
system. China is on the rise while the US is in decline. The government in Beijing presides over
a gross domestic product close to
$5 trillion and the country is poised to surpass Japan as the
world's second-largest economy.
And with more than $2.4 trillion in foreign reserves and $900
billion in US debt holdings, Beijing finds it necessary, and is
confident about, standing up to Washington.
Not that Beijing
is eager to pick fights with Washington or that it is becoming
impatient to take the number one spot. Far from it. China has
remained low profile and moderate in displaying its newfound prowess
and is reluctant when under international pressure to take on more
responsibilities, such as intervention in Myanmar or Darfur, for
But China's rising power makes it less willing to
accommodate US interests, especially when this would incur costs -
costs in reputation, such as, in the eyes of the Chinese, that their
government is too weak; costs such as imposing more sanctions on
Iran and tightening existing sanctions on North Korea. China could
still do it, but not without proper compensation and the ability to
explain to its constituency, especially its hyperactive netizens.
In such circumstances, US arms sales to Taiwan and Obama's
meeting with the Dalai Lama, the exiled Tibetan spiritual leader,
appear to Beijing as especially insensitive and insulting and
require strong responses. But Washington is perhaps equally in a
bind in that Obama was largely perceived as too deferential and weak
to his hosts on his visit to China last November; his postponement
of a meeting with the Dalai Lama last year triggered strong
criticism as well as disappointment. He could ill-afford delaying
decisions on arms sales already announced by the outgoing George W
Bush administration. And when he did meet the Dalai Lama last month,
it left Beijing predictably expressing rage.
one can expect more instances of conflict than of cooperation. The
Sino-US relationship remains the most important bilateral
relationship in the world and both countries can gain a lot from
cooperation. This requires both Beijing and Washington to adjust and
adapt during a period where they have never needed each other more
in dealing with a multitude of problems.
However, this is
also a period in which power transitions and domestic politics could
push the two countries on a collision path that neither seeks nor can gain from
and cause a major rupture of ties.
Yuan is director of East Asia Non-proliferation Program at the
James Martin Center for Non-proliferation Studies, Monterey
Institute of International Studies, where he is also an associate
professor of international policy studies.