News Analysis
Beneath the fanfare and upbeat tone expected at any summit, however, were obvious lowered expectations about the U.S. effecting change in the Chinese communist regime—among them, currency manipulation, subsidizing its industry, spying, and human rights violations.
“[Hu] comes to the States at a time of friction in the U.S.-China relations,” said John Pomfret at a Council on Foreign Relations (CFR) teleconference, Jan. 17, which summed up the circumstances of the meetings on the day before the Chinese leader’s arrival.
Frustration was evident with the lack of improvement in China’s rule of law and human rights. The Obama administration has a new level of realism in dealing with the Chinese regime, as was evident leading up to the visit in speeches and comments by Defense Secretary Gates, Secretary of State Clinton, Treasury Secretary Geithner, and National Security Adviser Tom Donilon.
Change in China: Wishful Thinking
President Barack Obama tried to strike a positive, optimistic tone in his welcoming speech at the White House, when the communist chief arrived on Jan. 19. The president noted the importance of U.S. trade with China, and how the U.S. sells $100 billion of goods to China, which supports half a million American jobs.
With the recovery still lagging and unemployment high, Obama was obviously pleased to announce a $45 billion increase in exports to China that will add 235,000 jobs, many of which are in manufacturing.
Obama stressed to Hu “that there has to be a level playing field for American companies competing in China, that trade has to be fair,” adding that he “welcomed” Hu’s claim “that American companies will not be discriminated against when they compete for Chinese government procurement contracts.”
He went on to mention China’s undervalued currency, stating “there needs to be further adjustment in the exchange rate, and that this can be a powerful tool for China boosting domestic demand and lessening the inflationary pressures in their economy.”
The words of welcome to the White House seemed filled with hope that the Chinese regime would be reasonable. Using China’s past behavior as reference, however, the president’s words are wishful thinking.
Steven Dunaway, adjunct senior fellow for International Economics, CFR, stated that intellectual property rights, China’s innovation policy, and exchange rates are the “three key issues.”
“I think there's increasing frustration, particularly on the exchange rate issue, with the pace at which the Chinese had advanced. And that has been reflected, I think, in a toughening of the stance of the administration over the past two years,” Dunaway said.
China’s behavior over the last years has made our allies and the administration apprehensive, according to a CFR teleconference with Elizabeth Economy, C.V. Starr senior fellow and director for Asia Studies, CFR.
Unease began after Obama’s meeting with Chinese leader Hu Jintao last year in Beijing. Events over 2010 awakened doubts in the Chinese regime, among them Chinese hacking of Google e-mail accounts, disputes in the South China Sea, and its defense of North Korean aggression, according to Economy.
“All of these events have caused a kind of reappraisal of what China is ready to be in terms of a global power and the kind of stance the United States needs to take in order to work with China,” Economy said. She added that speeches by public leaders showed “a much more realistic sense of what's going to be needed to bring China around to work cooperatively with the U.S.”
Next: Negotiating with a Repressive Regime
