As America Grows More Aggressive, is China Ready?

As the new year begins, a cloud appears to have fallen over the future of Chinese and American relations, due to America’s sale of arms to Taiwan, disputes over trade practices and exchange rates, lawsuits in the area of publications, as well as the furor created by the threatened withdrawal of internet magnate Google.

“This is going to be a really ugly, turbulent year with China,” says Dean Cheng, a China analyst at the Heritage Foundation, an American think tank.

It wasn’t so long ago that the Western media was reporting on the Chinese and American “honeymoon.” This was because the two countries had temporarily set aside their differences on such topics as Taiwan, Tibet, human rights and the exchange rate policy for the renminbi, in order to work together to respond to the global financial crisis.

While American experts and officials may hold a pessimistic view towards bilateral relations in 2010, the view of Chinese experts is relatively optimistic. They hold that this is merely a stage that the Chinese and American relationship must pass through in order to mature, just as a sapling with a single stem grows into a great tree with many limbs and branches.

An Unfavorable Beginning to Bilateral Relations

The new year appears to be a watershed.

In an interview with the Reuters news agency, former U.S. government employee Mike Green said he thought the Obama administration had exaggerated American dependence on China, causing China to become “the central kingdom and us the tributary state asking for their help.” In his opinion, this caused a great deal of shock to American conservatives, who demanded that Obama toughen policy towards China. Not only that, but America’s mid-term elections will be carried out in 2010, for which reason Obama must show some kind of movement.

The Eurasia Group, a world-famous think tank, also recently published a report titled “The Top Risks for 2010,” in which U.S.-China relations are classified as the issue of the year most deserving of attention. According to this think tank’s analysis, the progress made at the November Obama-Hu Jintao summit “won’t last in 2010. In the future, we’ll look back at that summit as the peak of the relationship.” In other words, “We’ll see significant deterioration in US-Chinese relations in the coming year.”

Friction quickly emerged between the two nations during the recent Copenhagen conference. The media reported a situation that was something like this: when Wen Jiabao, the Premier of the State Council of China, conferred with the leaders of Brazil, India and South Africa on a common response to the climate question, American President Obama hurried straight to the location of the meeting, and after encountering some obstacles, called out in a loud voice, “Premier Wen Jiabao, can you meet with me?”

The astute Chinese government does not normally use clumsy tactics. It is clear that Obama incorrectly assessed this situation.

The Americans brooded over this setback at the climate conference, believing that the U.S. had unwittingly fallen into an ambush laid by China. According to American media reports, following this incident, the Obama administration sought an opportunity to pay China back in kind.

Shortly thereafter, selling arms to Taiwan conveniently demonstrated America’s political agenda. The U.S. repeatedly pretended not to hear China’s protests, and simply persisted in the belief that, although there were differences in opinion regarding arms sales to Taiwan in China and America, nonetheless America could continue to act according to the Taiwan Relations Act and assist Taiwan in its self-defense.

The Hong Kong Oriental Daily News points out in one of its commentaries that bilateral relations no longer have the warmth of feeling that they had a year ago, and what remains is merely gradal entrenchment, wherein “America, having recently exhausted its strength in the financial crisis, clearly has discarded the veil of cordiality, and become again more ready to use aggression. Is China prepared for this?”

The Great Issues to Test Bilateral Relations

Bilateral relations have started out in a fairly unfavorable way. In the eyes of some analysts, however, this is only the beginning, and there are three “time bombs” that they believe could blow up Chinese and American relations at any time.

The first time bomb is the issue of trade. Commercial trade issues are the main source of friction between the two countries. For several years, America has been directly and deeply concerned with the question of the liberalization of China’s exchange rate. In a report published in April of last year by the U.S. Department of the Treasury, it is stated that China’s economy is severely unbalanced, excessively dependent on exports, and lacking in sufficient domestic consumption, in addition to which the report holds that China is “controlling” the exchange rate, causing America to suffer financial losses. At the same time, America still repeatedly accuses China of implementing “unfair trade subsidies” that damage the interests of American companies.

In Obama’s first year in office he worked to keep his campaign promises, protecting the rights and benefits of American labor, as well as the market for it. He implemented a three-year, 35 percent punitive tariff on Chinese tires, and also initiated anti-dumping and anti-subsidy investigations into seamless steel pipe and pressure pipe imports from China. Some analysts hold that the Obama administration’s tough stance has received the support of those who want to protect American trade. They believe that escalation of the Chinese-American trade conflict is unavoidable if they hope to win the mid-term elections in 2010.

The second time bomb is the question of the Dalai Lama. Though America accepts that Tibet is a part of China, for many years America has directly supported the Dalai Lama. In 1997, under pressure from the Congress, the U.S. department of State created the office of the Special Coordinator for Tibetan Issues. However, since coming to power, the Obama administration has not appointed anyone to this post, garnering criticism from the American media for appearing weak on the Tibet issue.

Last October, after refusing to receive the Dalai Lama when he came to visit, Obama fell under even more criticism from American conservatives. However, according to the latest reports from the American media, Obama may yet meet with the Dalai Lama in early February. At that time, an editorial in America’s New York Times predicts, Chinese and American relations no doubt will again become chilly.

The final time bomb is the question of military affairs. For many years, military relations have been the weakest link in bilateral ties. Although there have been frequent high level visits and dialog throughout the past year between the Chinese and American military, there have also been tense maritime confrontations and accidents. Though mutual celebration accompanied the opening of a military affairs hot line, there are other barriers that can only be overcome with difficulty.

While America sells arms to Taiwan, China is experimenting with anti-missile technology, and some believe this will complicate military exchanges between the two countries. On January 12th, Buck McKeon, the ranking Republican on the U.S. House Committee on Armed Services, still holding to Cold War notions, publicly stated that “Actions speak louder than words…As of yesterday, we heard from the Pentagon that this test was conducted without advanced notification to the United States…. Once again, we are left in the dark to question China’s commitment to transparency and cooperation.” He believes that, under these kinds of circumstances, it is already very difficult for the U.S. to carry out any kind of substantial exchange with China.

Bilateral Relations Become More Complex

Relations between China and America in 2010 have begun somewhat unfavorably. However, in the opinion of senior China analyst Bonnie Glaser of the Center for Strategic and International Studies, while Obama has been very cautious about timing, it has not influenced his fundamental policy direction, because “there really was a desire to try to get some trust and relationship building before we started to make decisions that might irritate the Chinese.”

On Jan. 12, American Secretary of State Hillary Clinton, while in Hawaii, also expressed the feeling that American sale of arms to Taiwan and Obama’s plans to receive the Dalai Lama will cause American and Chinese relations to enter a rough period. At the same time, however, “What I’m expecting is that we actually are having a mature relationship,” she said. “That means that it doesn’t go off the rails when we have differences of opinion.”

Glaser, in contrast, believes that following the declaration of arms sales to Taiwan in the next several months, the Obama administration expects that “Beijing could react to the arms deal by postponing, instead of canceling, President Hu Jintao’s return visit to the U.S.” From her perspective, the Obama administration has always been committed to Taiwan’s security and fulfilling the requirements of the Taiwan Relations Act. However, in his first year in office he had made a priority of establishing good relations and cooperation with China, so he didn’t immediately arrange for the sale of arms to Taiwan. Nonetheless, she says that Chinese opposition cannot halt America’s sale of arms to Taiwan, it can only influence the timing of the announcement.

According to Professor Zhang Jiadong of the Center for American Studies at Fudan University, if the Obama administration announces the sale of arms to Taiwan within the next two or three months, then China might abstain from Obama’s planned Nuclear Security Summit in March, in Washington DC. From professor Zhang’s perspective, this “Nuclear Security Summit” is one of great importance to the U.S. because of its direct bearing on Obama’s Nobel Peace Prize. Obama hopes to create a world without nuclear weapons, says Zhang, and he hopes that “China’s leaders can come and take part in his event. But under these kinds of circumstances, China’s leaders don’t have much reason to go and participate.”

In 2010, the bilateral relationship faces a great deal of uncertainty, but this doesn’t necessarily mean it will explode. According to the analysis of Wang Yishou, a professor at the School of International Studies at Peking University, “Due to the interconnectedness of Chinese and American relations, as well as the interdependence of both sides on global issues, isolated disputes will not generally influence the larger framework of the relationship. As a result, bilateral relations will retain the ability to experience turbulence without falling apart.”

Wang believes that, “At the present time, bilateral relations are developing from a relatively simple form to a relatively complex form, just as a sapling with a single stem grows into a great tree with many limbs and branches, each day becoming more mature.”