Those Who Benefit From Good Sino-American Relations Should Speak Up

It is widely believed that the American 2010 mid-term elections will become a life or death battle for both the Democratic and Republican parties, and that they will also be the first mid-term test of President Obama’s political prospects. Historically, there has always been a regular pattern of “splitting the vote” in American politics, so that whenever a new president takes office, the voters feel they should balance the power of the president's party, and they automatically throw their votes for Congress to the opposite party. As a result, those affiliated with the president’s own party all risk defeat during the first mid-term election, and every contested electoral district could change hands.

There is no doubt that this law of mid-term elections for incoming presidents is tormenting President Obama. According to some analyses, if the American unemployment rate were to break into double digits, it would encumber the Democratic party enough to cause them to lose up to 24 seats in the House of Representatives, and likewise weaken that party’s majority in the Senate. One expert says, “There are only three issues in the mid-term elections: Employment, employment, and employment.” In order to resolve the questions of employment and economic recovery, Obama must put the majority of his energy into resolving domestic problems, in particular into continuing to manage the economic situation, the core of which is addressing the question of employment. As a result, according to this analysis, there cannot be a great deal of diplomatic activity.

In terms of Obama’s concern with the two main topics of the economy and employment, I am afraid it will be very difficult for China, as the nation with which the U.S. has the biggest trade deficit, to escape the political maelstrom. Indeed, bilateral relations have turned out to be turbulent this year, but they have yet to become central to the mid-term elections. The turbulence so far has simply been a matter of Obama warming up and building momentum as a result of popular opposition to excessively close U.S.-China relations in the middle of 2009. Unfortunately, the core questions that the mid-term elections will raise for Sino-American relations will still be inseparably connected with trade, finances and employment.

Firstly, commercial trade will be central to relations with the U.S. in the middle of 2010. As they say, “America’s concern is doing business.” In the face of the economic situation after the crisis, a general requirement for achieving economic recovery and increasing employment has been expanding U.S. exports to drive employment, while controlling imports in order to limit damage to domestic employment. Looking at the situation from here on out, if China continues to keep the trade surplus with America high, then that would naturally become an excuse for the U.S. to draw its sword on China. Given the rigidity of demand for Chinese exports to the U.S., and the provocation of a series of bilateral countermeasures, the possibility arises that there will be a new round of Chinese and American trade wars. The threat of this ought to be greatest in the period between June and November.

Secondly, the dispute about the RMB exchange rate is the swiftest and most powerful weapon of attack. Even if trade friction persists in only a few areas, then the rise of the RMB exchange rate will be an effective weapon for the U.S. to wield against China in all domains. No matter what, in the face of mid-term electoral pressure, it is unavoidable that the Obama administration will move on the question of the RMB exchange rate. Whether they eventually define China as a country that manipulates currencies, or require China to undertake a greater commitment on exchange rates, or allow some limited fluctuation, it all depends on how much pressure the Democratic party receives during the mid-term elections.

Thirdly, there will also be an increased risk that other issues in bilateral relations will be linked to the mid-term elections. Sino-American relations have been constantly disrupted in 2010, but it is fundamentally an old tactic of the U.S. government to tie the mid-term elections to other issues in bilateral relations. This is done to appease domestic political forces, in order to build bargaining power in terms of mid-term election votes. As the election heats up, there might soon be a repeat of the pattern of questions related to Xinjiang, intellectual property rights, religion, democracy and human rights, climate change, and so forth. More and more topics of concern for bilateral relations risk falling victim to mid-term electoral politics.

Without a doubt, China cannot have any delusions regarding the damage that will be done to Sino-American relations by the mid-term elections. The Obama administration would not hesitate in the least to harm China’s interests in order to secure votes, so China should prepare for that eventuality, increase the vigilance with which it monitors every action of the U.S., and take appropriate precautions. For the present, one feasible approach would be to begin taking advantage of the positive aspects of good bilateral relations, to begin mobilizing the power and enthusiasm of those who benefit from developing Sino-American relations, and to energetically drum up compensating support around all of the different kinds of issues that will be hyped up during the mid-term elections. Those in America who have a vested interest in good bilateral relations should not be reduced to a “silent majority” by the crises facing them. We must encourage them to energetically enter into the U.S. mid-term election debates, and take a year that could lead to a crisis in bilateral relations and turn it into a year of opportunity, a year transformation and development, where we guide American opinion and policy towards China into a healthy orbit. In its interactions with America, China must learn to use a soft approach, but we must also learn to use a tough approach, and prepare both approaches well, so that Sino-American relations can develop in a relatively advantageous way.

The author is an associate professor in the Institute of International Studies at Tsing Hua University.