U.S.-Sino relation has always been like a marriage of convenience, and Obama’s visit to China this week can only reaffirm such assertion. On Sunday, he was in Shanghai, the country’s most sophisticated city, where he delivered a speech on tolerance and democracy before a group of university students. His speech was reportedly censored by the Chinese government, confining it only to Shanghai and the surrounding areas, not the entire country as it was originally planned. Despite this political setback, the U.S. president appeared undeterred in his country’s mission to strengthen the two countries’ economic ties.
Delinking bourgeois democracy and economic ties with China is a logic the U.S. upper class has long understood, since the Bill Clinton era. China’s vast wealth and its huge stake on the U.S. financial market is not a country that can be bullied into submission while using democracy as a front to achieve economic and political aim. China is certainly not Japan or South Korea. Living with China for the next 100 years as a potential competitor in super power rivalries has long been factored-in.
So, President Barack Obama pressed on, continuing his efforts to seduce the Chinese leadership on Wednesday, the final day of his visit with private talks with Chinese Premier Wen Jiabao. According to many observers, Obama’s first visit to the emerging Asian power “has been a mix of goodwill displays toward its sometimes wary people and leaders and closed-door discussions focused on the two big powers’ vast and increasingly complex relationship,” wroteChris Buckley from Reuters News Agency. Tomorrow, Obama sets to visit the Great Wall – a proud symbol of imperial heritage to many Chinese. Reports out of China speculate that Barack Obama plans to pressure Wen, the head of the Chinese government, on many sensitive, economic and diplomatic issues, although these issues were not being made public.
In his summit with President Hu Jintao on Tuesday, Obama was reportedly blunt, conveying that his main concerns and that of the U.S. elite were about China’s currency policy. Many China watchers in the U.S. capital and in other industrial powers believe China keeps the yuan—the country’s currency—too low in value, putting competitors at a disadvantage and distorting global economic flows. But Chinese economist, Lee Tchen Wa, stated that these measures are strategically necessary in order to counter the United States protectionist policies in the trading market. However, it was noted that Hu Jintao, who is also the head of China’s Communist Party, made no mention of the yuan or the dollar in his comments before reporters during the summit.
The only person who will be more at ease to trade concrete words with Obama on currency and China’s own gripes with U.S. trade rules is Wen Jiabao, who runs the day-to-day economic affairs. Officials and experts from both sides have stressed, however, that Obama’s visit will not bring about immediate policy shifts. “There will still be setbacks and even conflicts between China and the United States,” said a commentary in the overseas edition of China’s official People’s Daily. “It will take the constant efforts of one or two generations, perhaps several, to bring stable progress to relations,” he continued.
Jin Canrong, an expert on China-U.S. ties at Renmin University in Beijing conceded that “any policy changes by China, including on the exchange rate, will be based on its assessment of its own interests, not on external pressure,” he said. The currency issue has been the subject of heated debates in the corridors of many financial great halls in Europe and in North America. As pressure mounts on China to raise the value of its currency, China’s Commerce Ministry dashed any hope on Monday as it rebuffed calls for the yuan to appreciate, signaling resistance to change foreign exchange policy. Many in Washington and in Wall Street are worried over the strength of China’s vast U.S. assets. China has accumulated over the years $2.27 trillion of foreign exchange reserves, the world’s largest stockpile, and analysts think about two-thirds of this is invested in dollar-denominated assets.
As reality sets in, Obama understands that dispute over trade and the United States criticism of China’s human rights record should not “overshadow” their strategic cooperation. China’s cooperation in Central Asia is of extreme importance to counter the growing sophistication of the Taliban and also to help rein in Iran in its quest to acquire the Atom bomb. On top of all this, there is the vexing question of what to do with North Korea, which remains as “belligerent” as ever, not willing to relinquish its nuclear arsenal. Only China and perhaps Russia can help in that endeavor.