SHANGHAI - While the world is focused on the Group of 20 (G20) summit in London
early next month, it will also watch closely the meeting on the sidelines
between Chinese President Hu Jintao and his US counterpart Barack Obama. The
first Sino-US summit since Obama was sworn in more than two month ago will not
only address bilateral relations and mutual concerns, but also provide an
opportunity for the leaders to build personal trust and upgrade the countries'
strategic dialogue.
A number of issues of mutual interest are likely to be addressed at the
Hu-Obama meeting.
To foster closer cooperation on bilateral and international affairs, the
leaders are likely to endorse the establishment of a mechanism of Strategic and
Economic Dialogue, an upgrade from
the current level of dialogue between the countries. This has been indicated by
meetings held between US Secretary of State Hillary Clinton and Chinese
Minister of Foreign Affairs Yang Jiechi in each nation's capital before the
summit.
Days after the Sino-US naval standoff on South China Sea this month, Obama told
Yang during an Oval Office meeting that it was crucial to raise the level of
military-to-military talks "in order to avoid future incidents". The meeting
between Hu and Obama, both commanders-in-chief of their armed forces, will
decide whether the two militaries are truly ready to enhance links.
The leaders may also address anti-terror and non-proliferation issues. The US
is now shifting its anti-terror strategy, with plans to send more troops to
Afghanistan, which has a border with China. While China and the US share
fundamental interests in fighting international terrorism, this shift could
mean China will need to adjust its own strategy regarding terrorism and
peripheral stability.
With North Korea's plans to launch a "satellite" in early April, the resumption
of the six-party talks is naturally an issue for Hu and Obama to discuss. With
"regime change" in Washington, Pyongyang has had time to devise a new strategy
to engage the new administration. Its recent rhetoric has raised the importance
of re-opening these talks and the need for Chinese-American synergy in their
approach to them.
This list of common interests in non-proliferation and regional security issues
extends to Iran's nuclear program and stability in South Asia. However, Obama
will be most interested in bringing forth his own agenda for the summit.
Predictably, he will be preoccupied with economic security, as the devastating
financial crisis poses a serious threat to the world and US economies. If he
cannot offer hopeful remedies to this, over time his standing could be in
jeopardy.
It is this crucial issue that could split participants at the G20. Though they
all claim to share the common objective of recovery from the crisis, their
approaches could be quite different. The US is likely to stress the importance
of spending and stimulus measures, while the EU is keener on reforming the
global financial system, such as plans to build stronger supervision and a
better early-warning mechanism. China cares primarily about the security of its
own financial assets in America.
Clinton said during her visit to Beijing in February, "The US appreciates
China's continuing confidence in American dollars." China now is the largest
holder of US Treasury bonds. According to the US Treasury Department, China
holds bonds worth US$740 billion, which is equal to 6% of all bonds the US has
issued. Obama may hope more Chinese investment will come from his meeting with
Hu, while the Chinese president is likely to reiterate Beijing's concerns about
the safety of its dollar assets.
China is not concerned over the US economy's long-term recovery, but more if
the crisis has passed its worst phase and begun to bottom out. How this
legitimate concern is answered will dictate the scale of China's US-bound
investment, as Beijing must protect its investments. From this perspective,
while China appreciates Obama's promise that the US is a reliable manager of
foreign funds, the reality is that America has failed to manage its own wealth
lately. On this issue, Hu and Obama may have a lot to discuss.
Although China is willing to "ride on the same boat" with the US, it is likely
to paddle more cautiously. Beijing is apprehensive of American protectionism,
either in the form of "Buy American", or in unreasonable conditions being
placed on the quality of imported goods. China has been concerned over
officials within the Obama administration accusing it of "currency
manipulation".
Realistically, the US jobs lost due to manufacturing outsourcing will never
return to America, whether China manipulates its currency or not. It is one
thing for US politicians to talk about this for domestic political reasons, but
quite another if the Obama administration allows such talk to develop a level
that could harm its interests.
Although there is much common ground, China and the US are still at odds on
other issues, for instance on Taiwan and Tibet.
Since China and the US established formal ties in 1979, Taiwan has been a
frequent source of tensions. On Tuesday, the US Congress passed a resolution
reiterating the US's "unwavering commitment" to Taiwan's security. It also
called the 1979 Taiwan Relations Act a "cornerstone" of US policy. The act
requires that the US upholds Taiwan's capability to defend itself, including by
providing the island with "arms of a defensive character". This prompted China
to lodge a formal protest on Thursday.
Therefore, while it may sound trite, Hu is certain to stress that Taiwan
remains a core issue in Sino-US relations.
Though the US government professes a "one-China" policy and recognizes Taiwan
as a part of China, arms sales to Taiwan by the George W Bush administration
have kept Beijing suspicious of Washington's genuine intentions. Unconfirmed
reports that the Obama administration might sell Taiwan advanced jetfighters or
upgrade what the US sold earlier could cast a serious shadow on bilateral
relations.
Tibet is another thorny issue that may hurt Sino-US relations. Despite the US's
recognition that Tibet is a part of China, Beijing is not happy with what it
considers Washington's interference in China's internal affairs, especially
given America's commitment to the separation of religion and state.
The Congress has just passed overwhelmingly the resolution Democrat party
representative Rush Holt initiated in support of the Dalai Lama, the Tibetan
spiritual leader in exile. The Chinese side finds it difficult to understand
why the American leadership has failed to note that the Dalai Lama was the
"god-king" ruler of a serf system, and still aspires to restore that system -
in which religion is not separated from politics.
The recent naval standoff in the South China Sea involving the USNS Impeccable,
as well as the air collision incident in the same area in 2001, have prompted
questions as to what a rising China means, and where the center of gravity of
power is shifting in the Asia-Pacific.
The best approach to avoiding such incidents would be for the US to limit or
even stop military missions in this area. It has also been noted that the
military-to-military hotline that was set up after arduous efforts was not used
during the incident. This negates the whole purpose of creating the mechanism.
The two governments also need to work out an engagement protocol of their
respective navies and air forces in the South China Sea, particularly in the
Exclusive Economic Zone areas in which China has special economic rights.
During the past eight years of the Bush administration, China, with its fast
economic growth, has narrowed its economic gap with the US. China's gross
domestic product is now one-third of the US's, compared to one-ninth eight
years ago. Obama may need to ponder how much closer this gap is to be further
narrowed under his presidency, and adjust Washington's China policy
accordingly.
With the apparent decline of the American empire and the rise of China, the
Hu-Obama meeting is expected to usher in a new era of Sino-US relations in
which Beijing and Washington will cooperate to face international security
challenges, but at the same time compete with each other with their different
values and systems.
Professor Shen Dingli is director of Center for American Studies and
executive dean of the Institute of International Studies, Fudan University,
Shanghai.
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