Big Fish, Same Pond

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  Sino-US Relations Need Someone to Move over Sometime
  
  DURING China’s national parliamentary sessions held in March of each year, there is always a sharp focus by both domestic and foreign media on the press conference dealing with foreign policy and foreign relations. Anticipation of this year’s address was particularly acute as relations between China and its key economic partner, the United States, have been under strain. In an effort to smooth things over, Washington dispatched two of its most senior officials to Beijing in early March.
  Sino-US relations enjoyed one of the smoothest and most positive transitions of any administration change when Barack Obama took office in January 2009. The former “Strategic Economic Dialogue” and “Strategic Dialogue” were merged into the “Strategic and Economic Dialogues (SAED)” to increase the level of bilateral cooperation. High-level officials began making more frequent visits, including the newly inducted Secretary of State Hilary Clinton, who made Beijing the choice for her first official foreign visit. The two nations’ heads of state also managed to meet on several important occasions, including the G20 Summits in London and Pittsburgh. Mr. Obama then made his maiden voyage to China last November, an unprecedented action for a U.S. president in his first year of presidency.
  Despite all these positive leanings, certain bumps in the road began appearing just two months after the new president’s state visit. As China celebrated its traditional Spring Festival, bilateral relations grew cold.
  
  Opinion Polls vs. Core Interests
  
  At the beginning of 2010, word came from the Pentagon that it was going ahead with a planned US $ 6.4 billion arms sale to Taiwan. The package would include 114 Patriot Advanced Capability (PAC-3) missiles, the most advanced air defense system in the world, 60 UH-60M Black Hawk helicopters, and 12 Harpoon Block II Telemetry missiles. This move was seen as a venomous effort to sabotage the steadily improving cross-Straits relations. Former Foreign Minister Li Zhaoxing likened it to “handing a dagger to someone as he is hugging his brother” at a press conference held on the lead up to the Third Session of the 11th National People’s Congress, the annual parliamentary session.
  The Chinese government expressed strong indignation and firm opposition toward the arms sale. However, the move was just a part of the growing darkess that began to shadow Sino-U.S. relations since early this year. In February President Obama met with the Dalai Lama, whom Li Zhaoxing calls “the political monk,” in the White House. Obama’s precarious action was perceived to be an attempt to shore up his waning public approval ratings at home. Obama, after a challenging first year as president, saw his ratings decline to 47 percent, down from a high of 70 percent as he first entered office. “Obama’s foreign policy has not been stable,” commented Zhang Guoqing, a research fellow at the Institute of American Studies of the Chinese Academy of Social Sciences. “As a political superstar, he is too easily influenced by powerful domestic lobbies.”
  The issue of China’s sovereignty over Taiwan and Tibet has long been considered a highly sensitive internal matter that is not to be interfered with by other countries. There was no doubt then that those two U.S. actions would strike a cord of concern in Beijing. “The recent moves taken by the United States had seriously violated the principles set out in the three China-U.S. Joint Communiqués and the China-U.S. Joint Statement,” said Foreign Minister Yang Jiechi at the March 7 press conference. “They have undermined China’s core interests and the overall course of China-US relations.”
  Signed in the late 1970s and early 1980s, the three China-US Joint Communiqués are regarded as the primary guidelines for the development of bilateral relations. In the communiqués, the U.S. acknowledged that Taiwan and Tibet are part of Chinese territory.
  As events were unfolding, the Foreign Ministry of China summoned the US Ambassador to China Jon M. Huntsman to put forth Beijing’s stance on the situation. Meanwhile, the Chinese government considered sanctions against U.S. companies involved in the arms sales to Taiwan, (including Boeing), as well as immediate suspension of all scheduled exchanges between the Chinese and U.S. armed forces.
  Some Western media saw China’s reaction as “retaliatory.” The London-based Financial Times linked China’s response to its rapid rise in economic prowess and growing nationalist sentiment, saying “Beijing was feeling a new found sense of strength, and was testing that in its dealings with the United States and other countries.”
  The Chinese Foreign Minister retorted that his nation’s response reflected a “firm” attitude toward a principled issue rather than an opportunistic “tough stance.” “As for maintaining state-to-state relations, the key is sticking to ‘principles’.” He made these remarks on questions presented by a journalist from CNN, adding that the principle of Chinese diplomacy is to defend China’s sovereignty, security and development interests, and to promote world peace through this development, which is also the fundamental principle for all international relations. “It is unfair to label actions safeguarding one’s own core national interests and dignity as ‘tough’ and to take it for granted to infringe on the interests of other countries,” the minister continued.
  
  World’s Two Biggest Fish Swim in the Same Pond
  
  On March 2, U.S. Deputy Secretary of State James Steinberg and the National Security Council’s Senior Director for Asian Affairs Jeffrey Bader arrived in Beijing to discuss a series of issues that concerned the two countries. These two senior officials in the Obama administration are key members of the president’s cabinet charged with formulating America’s policies regarding China. James Steinberg is a leading expert on Asia-Pacific and China affairs, and is second only to Secretary of State Hillary Rodham Clinton in the State Department. His previous role as ambassador to China placed him as Obama’s top China adviser. “Their visit reveals high-level communication between the two countries remains unimpeded,” said researcher Zhang Guoqing. “At times when differences and discord emerge between the two nations, both sides can take a pragmatic attitude, and keep diplomatic channels open.”
  James Steinberg released his concept for future China-US relations last July – “strategic reassurance,” which has been referenced on many occasions by American officials. Steinberg has stated that concerning the growing strength and influence of China, the United States is “eager to continue working with China to address a variety of global and regional issues, including those where the two countries disagree.” During Gorge W. Bush’s governance, a framework was created where China would become a “responsible stakeholder in world affairs.” This mode was proposed by Steinberg’s predecessor Robert Zoellick. He urged that China, as a member and “stakeholder”of the international community, holds a responsibility to help maintain the system.
  After President Obama was sworn into office, he was immediately overwhelmed with domestic issues like economic recovery, building a health reform plan and lowering unemployment. This has left his foreign policy to be put on the back burner. He must still cope with a range of global issues that include the global financial crisis, climate change, nuclear non-proliferation and remaining entrenched in two wars. It is clear that on all these fronts the US needs the full support and cooperation of China, the world’s largest developing country and its key economic partner.
  “‘Strategic reassurance’ is a method of highlighting and emphasizing common interests,” Steinberg said in describing the concept, “and addressing the roots of any distrust present across all political, military or economic fronts.” Steinberg and Bader’s trip to Beijing was not only geared toward patching US-China relations, but also to seek China’s cooperation on Iranian and North Korean nuclear issues. The Chinese Foreign Minister called talks with them “in-depth and candid,” and hoped to see the resumption of Six-Party Talks and joint achievement of the preset goals.
  Mr. Yang admitted frankly that there are some difficulties in settling the Iranian nuclear issue, but insisted “pressure and sanctions cannot resolve the issues in any ultimate sense.” He hopes that all parties concerned adhere to the diplomatic negotiations.
  
  Trade, Trade, Trade
  
  Among the current China-U.S. frictions, recent trade disputes have had the biggest direct affect on the lives of people of both countries. Last September, the US government announced that over the next three years it would impose punitive tariffs on tires imported from China. The rate would be set at 35 percent in the first year, 30 percent in the second and 25 percent in the third.
  According to data released by the China Rubber Industry Association, 40 percent of all tires made in China are exported, among which a third goes to the U.S. Tariffs as high as 35 percent would definitely stifle China’s tire exports to the U.S. Preliminary estimates have shown that about 100,000 Chinese workers would face disemployment, and the export losses would reach nearly US $1 billion.
  The Triangle Group Co., Ltd, one of China’s leading tire producers, found its monthly sales to the U.S. drop sharply to 100,000, from around 300,000 prior to the sanctions. The import and export data from the General Administration of Customs showed that China’s tire export to the U.S. in September 2009 decreased by 37.5 percent over the same period of the previous year.
  Dubbed the “first Obama era sanction,” the case’s negative impacts were not limited to the tire industry, but had a ripple effect across other industries and national borders. On the last day of 2009, the U.S. government decided to slam countervailing duties on Chinese steel pipes, its largest sanction so far; on February 8, it decided to impose up to a 231 percent anti-dumping tax on boxes and ribbons used for gift wrapping made in China’s mainland; on February 24, the U.S. Department of Commerce reached the preliminary decision of imposing countervailing duties on seamless steel pipes imported from China. In January, India announced its own plan to formulate anti-dumping measures on made-in-China tires. Thus far, over 10 countries had followed the U.S. in carrying out investigations on China’s tires.
  As a countermeasure, the Chinese Ministry of Commerce revealed anti-dumping and countervailing measures on American exports of white-feather chicken products. “Against the backdrop of a slow economic recovery for the U.S., the American government is inclined to entertain trade litigation appeals by domestic enterprises against China. The Chinese steel, textile and agricultural industries are the most affected,” said Zhang Guoqing. “As the two markets have become increasingly intertwined, they now share many common interests. Trade sanctions simply aren’t helpful to either of them.”
  The tire sanctions fazed not only Chinese companies but also four American enterprises that have production bases in China. Those four companies produced two thirds of the Chinese tires exported to the U.S.
  At this low ebb in Sino-US relations, Yang Jiechi made an appeal to China and the U.S. to work together to get relations back on track and headed toward positively inspired cooperation. China signaled the first willingness to do so. In mid February, the nuclear-powered USS Nimitz applied to dock in Hong Kong to conduct a 4-day supply and recharge operation. The Chinese government approved the request – to the shock of many international relations experts. Previously, at the end of 2007 when the two countries experienced similar tensions, China refused a similar request from the USS Kitty Hawk. In the Sino-US relations, more friendly steps like this would be welcome.
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