Obama is Getting Ready to Play Tricks on China

Over the years, no matter gets elected president of the U.S., be it the Democrats or the Republicans, there are two major problems between China and the U.S.; Taiwan and Sino-U.S. trade. Obama seems worried about the Sino-U.S. trade at the beginning of his presidency and is quite interested in playing tricks with Beijing concerning trade protectionism. Beijing’s position is to resist and stay firm.

After two important members of President Obama’s team- Treasury secretary Timothy Geithner and Defense secretary Robert Gates- expressed unfriendly messages towards China that brought up questions about the future of Sino-U.S. political relations. Everyone is worried about those new variables concerning Sino-U.S. relations now that the White House occupant has changed. Public opinion and the unfriendliness that Beijing felt led to an appropriate application of pressure on the White House so that they had to patch up their speech claiming that neither Geithner’s or Gates’ opinions represent U.S. policy. Afterwards, Chinese President Hu Jintao and President Obama talked on the phone. President Hu clarified that China is firmly opposed to trade and investment protectionism, and it will jointly promote with Washington the positive results achieved by the G-20 Finance Summit so as to ensure a stable and healthy world economic and financial development.

Sino-U.S. Trade Friction Expected to Rise

Obama’s position was rather ambiguous, not saying he would promote trade protectionism or oppose it, but he said to Hu Jintao that China and the U.S. must fix the global trade imbalance together and reconcile the credit market to cope with the world economic crisis.

Obama’s vague position actually implies that the U.S. may implement protectionist trade and investment policies. A trade war between China and the U.S. would be then under way. It can be anticipated that Sino-U.S. trade conflicts will arise constantly in the future, as the U.S. will find all sorts of excuses and reasons for any mischief on this issue, the core being some intervention in the RMB exchange rate to reduce the trade surplus between China and the U.S. For Obama, this is the only way to protect American industries and to create job opportunities. During the campaign and since taking office, Obama guaranteed firmly to his American voters that he will create five million jobs. To this end, he will focus on Sino-U.S. trade and the RMB exchange rate.

Concerning Taiwan, Beijing insists on three principles: first, Taiwan is a domestic issue and China does not allow foreign intervention, including the U.S.; second, China opposes the U.S. selling weapons to Taiwan; third, China disagrees that the U.S. is delivering the wrong message uncontrollably in trying to encourage “Taiwanese independence” until it risks danger in desperation. Regarding Sino-U.S. trade issues, China is opposed to protectionism and insists on their own exchange rate policy, making its own decisions on RMB exchange rate reform according to changes in its’ condition or maturity.

Beijing’s Cool Response to Obama’s China Policy

Concerning these two major issues between China and the U.S., Beijing has already made a close observation during Obama’s presidential campaign. The International Liaison Department of the CPC Central Committee sent two officials to participate in the American Democratic Party’s General Assembly to observer what kind of policies Obama would formulate towards China if elected. At the Democratic Party’s General Meeting, the Beijing observers did not have any opportunities to talk with Obama, but talked with people on his foreign affairs team, as well as participate in a Democratic-sponsored forum on America’s foreign policy. Through these conversations and the forum, Beijing observers were impressed on two counts: first, Obama was concerned about the Sino-U.S. trade imbalance and leans towards implementing trade protectionism; second, Obama is satisfied with the current moderation at the Cross-Strait, encouraging the peaceful development of Cross-Strait relations and with U.S. being prudent in selling weapons continuously to Taiwan.

It seems that Obama is really concerned about Sino-U.S. trade issues and is quite interested in playing tricks on Beijing regarding trade protectionism. Beijing’s position is to resist and remain firm.