Barack Obama Reads China the Riot Act

As host of the conference of Pacific Rim countries, the U.S. president heralded a “Pacific age” and put China in its place. Beijing must abide by the “rules of the game.”

The photographers put on a long face because the traditional group photo in national costume, along with singing by all participants at the concluding banquet, were omitted this year in Honolulu. Instead of smiling into the cameras in a colorful Hawaiian shirt, Obama — host of the APEC summit, the association of Pacific Rim countries and Hawaii’s most prominent son — struck harsh tones against China.

He repeatedly cautioned Beijing to abide by the “rules of the game.” “Enough’s enough,” said Obama at the concluding news conference. China needs to finally act like a “grown up” economy. Armed with a Senate resolution for punitive tariffs, a complaint from the U.S. solar energy sector against unfair competition from China and the Republicans’ election polemic, the president took an aggressive position.

Whether directly in conversation with Chinese president Hu Jintao, or in a larger circle, Obama decried the Chinese currency policy and breach of copyright regulations. Keeping the yuan artificially low has been a thorn in Washington’s side for a long time; frustration with the U.S. economy is a driving force in the simmering trade conflict.

Warning against “Trade War”

Some of the Republican presidential candidates even threatened to provoke a trade war with China — the largest U.S. creditor. Only Jon Huntsman, a former ambassador to Beijing, expressly warned against an escalation.

Hu Jintao countered in a release from the Chinese Ministry of Foreign Affairs: “The U.S. trade deficit and unemployment are not caused by the yuan exchange rate. Even a substantial rise in the yuan will not solve problems faced by the United States.” He further questioned the superpower’s position: “First we have to know whose rules we are talking about.” Meanwhile, Obama also struck self-critical tones: “We’ve been a little bit lazy over the last couple of decades. We’ve kind of taken for granted — ‘Well, people would want to come here’ — and we aren’t out there hungry, selling America and trying to attract new businesses into America.”

In the meantime, the creation of a Pacific free trade zone took on shape in Honolulu. The U.S. sees this as a stronghold against the Chinese sphere of influence — and China views it as a threat to its hegemonic power. Japan, Canada and Mexico expressed their interest in entering into a Pacific trade treaty. Already, before the beginning of the APEC summit, Obama and his Secretary of State, Hillary Clinton, had heralded the beginning of a Pacific age. “No region will do more to shape our long-term economic future than the Asia-Pacific region,” explained Obama. At the southern Asia summit in Bali at the end of the week, he will again rally for a U.S. presence.