“Post-Crisis” Era Sino–U.S. Relationship

After five years, Chinese President Hu Jintao will once again visit the U.S. This trip could set the basis of “post-crisis” era Sino–U.S. relations and encourage the development of “active and comprehensive” cooperation, with the outcome of maximizing mutual benefits and practical gains in a win-win situation.

Visits to the U.S. by Chinese leaders have always been viewed as important events in Chinese diplomacy. Hu’s upcoming trip is viewed as a milestone visit, important to the rebuilding of Sino–U.S. relations following the 40th anniversary of the Tiananmen Square incident and as we step into the second decade of the 21st century. This shall be the first meeting between two country leaders who represent the world’s two largest economies, contributors to global warming emissions and producers.

We should also note that this visit is occurring when the world is slowly stepping out of the shadows of the financial crisis. The crisis has already caused significant changes to the strengths of large nations. The U.S. is still the “engine” of the world economy; while it is recovering faster than most economists had expected, it is still ridden with an extraordinarily high unemployment rate and heavy debts. On the other hand, China has risen to become the world’s second-largest economy with strong growth bolstered by policy stimulus. China does face a series of challenges in developing its economy, yet at the same time, by the measure of purchasing power parity, the scale of its economy could exceed that of the U.S. in 10 years. This is the consensus of many analysts and observers. This prospect not only creates space for future Sino–U.S. relations, but also caused the relationship to become more sensitive and even more fragile. It is extremely easy for one side to become overly confident and the other to become overly concerned and worried. The focus of the world on the upcoming visit will be on how both sides will adapt to the new situation in seeking “cooperation based on common interests.”

The importance of Sino–U.S. relations is evident, but that does not hide the tension and divergences in opinions. While Sino–U.S. relations have improved with greater cooperation after Obama took office, the future relationship is more likely to return to the norm of “conflicting yet cooperative.” With China’s rise as backdrop, this is the “zero-sum game” that is inherent in international relations. Another reason for the paradoxical relationship is the differences in priorities of internal affairs and the lack of coordination in external diplomacies between the two countries. The currency debate is a typical example of such incompatibility.

At its roots, the Sino–U.S. relationship is one of “competition and cooperation” between a super power and the largest developing nation. Such a relationship depends hugely on the shifts of powers within the countries and changes in the global environment. For example, take a look at military ties that form an important component of Sino–U.S. relations. The three obstacles to smoother military ties are arms sales to Taiwan, the restrictions of the U.S. Congress to military exchanges between the two countries and U.S. machines carrying out observations in China’s exclusive economic zones. China is also unlikely to be enthusiastic about the suggestion for a dialogue between the two armies focusing on issues such as nuclear policies, missile defense, network security and space programs.

The meeting between the two heads of state will limit these conflicts and divergences in viewpoints within controllable limits, and made both parties take prior actions that helped appease domestic sentiments. Political observers have noted that in recent days, the RMB has appreciated significantly against the USD, foreign participation in the China’s securities firms has increased and JP Morgan Chase & First Capital Securities and Morgan Stanley & Huaxin Securities have gained government approvals. That the Chinese government has chosen this time to make such moves is quite meaningful. At the same time, development seems probable in issues that China is concerned about, such as the loosening of U.S. restrictions placed on Chinese high-tech exports and having greater opportunities to invest in the U.S. This shows that flexibility should not be unilateral.

The roles of bilateral visits between heads of state in pushing forward bilateral relations cannot be underrated. Even those who are realists in international politics will keep communication channels smooth for high-level dialogues to take place, and bilateral visits between heads of state are viewed as the baseline. In this area, China has a larger space for improvement. After Obama took office, dialogues focusing on the economy and military from the Bush era were merged into one. However, compared to China’s relationships with the leaders of Russia and India (regular bilateral visits), the Sino–U.S. relationship — “the world’s most important bilateral relationship” — has yet to establish a similar system.

At the moment, both sides are still experiencing issues due to their own internal structures and interests. I am afraid these would not be easily eliminated, and both sides are not going to let go easily. However, regular high-level dialogues will alleviate the problem and help reduce “misunderstanding, misinformation and misjudgment.” Over the last 30 years, whenever Sino–U.S. relations bottomed out, not once was it not the result of the leaders’ sizing up of the situation and then decisive decision-making. In the end, personal friendships between the leaders often become the last line of defense in crisis management.

The “post-crisis” era of the Sino–U.S. relationship does not only require mutual trust and interaction between leaders, but also societies and public opinions that encourage bilateral interactions.