Behind the Smiles, an Ice Cold Power Game
Published in Handelsblatt
(Germany) on 11 November 2009
by Christoph Rabe, Handelsblatt (link to original)
President Obama is looking to curry favor with the Chinese during his trip to Asia. But the battle for economic and political domination in Asia began long ago.
Because of different circumstances, China is not as infatuated with Obama as other countries. Unlike many European nations, China does not see itself as part of some community that shares the same values with the United States. Beijing objectively looks upon its relations with Washington as a commercial partnership. China is pursuing one goal above all. It wants to become the leading nation in Asia, and it’s just fine with China that the United States is now in a period of weakness.
The American president may indeed be using his position to curry favor in Shanghai and Beijing as he does in other places. In Beijing, however, the Chinese know exactly where their country stands. At any rate, Sino-American relations have evolved well beyond the stage in which issues like human rights or Taiwan once defined the agenda. Today, China is taking part in all global issues, be it climate change, trade, or the financial crisis. Due to the fact that China has managed its way through the financial crisis far better than the United States, there is growing confidence in Beijing that the United States can now be faced eye to eye. It is no longer a utopia that the two countries might some day be at the center of the global economy because they are truly the world’s two leading economic powers.
It should also be on Obama’s mind that the Chinese challenge conjures up new fears throughout Asia because as long as America remains mired in crisis, China will aggressively try to make gains in southeast Asia with trade agreements, checkbook diplomacy and investments in infrastructure. China’s military is also getting stronger. For many Asians, the vacuum left behind by the United States’ lack of engagement is fueling insecurity. Lee Kuan Yew, Singapore’s elder statesman, visited Washington before Obama left on his trip, specifically to make his concerns known. Singapore is certainly not the only country suspected of harboring fears of China.
What may unsettle China and all other Asian countries the most is the fact that Obama steadfastly says nothing of the central concerns of Asia. Since his inauguration, he has barely addressed questions on global trade. All initiatives for the further development of bilateral or global trade agreements are sitting in Washington’s pile of unfinished political business. Yet, trade is the strongest link between the United States, China and the rest of Asia. But, as with other controversial issues such as health care reform, Obama is afraid to tackle another hot topic. This is not making him any friends in Asia.
Nevertheless, China and the United States are, for better or worse, dependent on each other. It’s primarily up to them to straighten out the global imbalances. The drop in U.S. consumer spending is an alarming sign for China. Washington has to wonder whether China is actively pursuing a policy of abandoning the dollar as a reserve currency. Both countries are aware of this and, for that reason, they both know better than to point out their differences. It is painfully obvious to the United States that it essentially has no leverage to force China to turn its artificially undervalued currency over to the free play of market forces, and China is no less certain that it can make any further progress only by maintaining commercial relationships with the United States.
Sooner or later, China and the United States will no longer be able to mask their hitherto hidden power game for leadership in Asia behind cordial clichés. Today, this struggle is still under wraps due to concern for the global economy. However, the time is coming when the United States will have to say where it stands in Asia. It could be that the Chinese are already one step ahead of the Americans.
Because of different circumstances, China is not as infatuated with Obama as other countries. Unlike many European nations, China does not see itself as part of some community that shares the same values with the United States. Beijing objectively looks upon its relations with Washington as a commercial partnership. China is pursuing one goal above all. It wants to become the leading nation in Asia, and it’s just fine with China that the United States is now in a period of weakness.
The American president may indeed be using his position to curry favor in Shanghai and Beijing as he does in other places. In Beijing, however, the Chinese know exactly where their country stands. At any rate, Sino-American relations have evolved well beyond the stage in which issues like human rights or Taiwan once defined the agenda. Today, China is taking part in all global issues, be it climate change, trade, or the financial crisis. Due to the fact that China has managed its way through the financial crisis far better than the United States, there is growing confidence in Beijing that the United States can now be faced eye to eye. It is no longer a utopia that the two countries might some day be at the center of the global economy because they are truly the world’s two leading economic powers.
It should also be on Obama’s mind that the Chinese challenge conjures up new fears throughout Asia because as long as America remains mired in crisis, China will aggressively try to make gains in southeast Asia with trade agreements, checkbook diplomacy and investments in infrastructure. China’s military is also getting stronger. For many Asians, the vacuum left behind by the United States’ lack of engagement is fueling insecurity. Lee Kuan Yew, Singapore’s elder statesman, visited Washington before Obama left on his trip, specifically to make his concerns known. Singapore is certainly not the only country suspected of harboring fears of China.
What may unsettle China and all other Asian countries the most is the fact that Obama steadfastly says nothing of the central concerns of Asia. Since his inauguration, he has barely addressed questions on global trade. All initiatives for the further development of bilateral or global trade agreements are sitting in Washington’s pile of unfinished political business. Yet, trade is the strongest link between the United States, China and the rest of Asia. But, as with other controversial issues such as health care reform, Obama is afraid to tackle another hot topic. This is not making him any friends in Asia.
Nevertheless, China and the United States are, for better or worse, dependent on each other. It’s primarily up to them to straighten out the global imbalances. The drop in U.S. consumer spending is an alarming sign for China. Washington has to wonder whether China is actively pursuing a policy of abandoning the dollar as a reserve currency. Both countries are aware of this and, for that reason, they both know better than to point out their differences. It is painfully obvious to the United States that it essentially has no leverage to force China to turn its artificially undervalued currency over to the free play of market forces, and China is no less certain that it can make any further progress only by maintaining commercial relationships with the United States.
Sooner or later, China and the United States will no longer be able to mask their hitherto hidden power game for leadership in Asia behind cordial clichés. Today, this struggle is still under wraps due to concern for the global economy. However, the time is coming when the United States will have to say where it stands in Asia. It could be that the Chinese are already one step ahead of the Americans.