Beijing in a high-level balancing act


By Jing-dong Yuan
Asia Times
Dec 24, 2009


BEIJING - With China and the United States marking 30 years since the establishment of diplomatic relations, unprecedented high-level exchanges in 2009 increased cooperation on global and regional issues, from energy conservation to financial stability and helped in the continued search to maintain a stable relationship as the balance of power shifts.

Barack Obama in November became the first US president to make a state visit to China within one year of taking office, after he and President Hu Jintao agreed to build a comprehensive bilateral relationship for the 21st century when the two leaders met for the first time at the Group of 20 (G-20) summit in London in April. They also met on the sidelines of a number of other international meetings.

US Secretary of State Hillary Clinton made her maiden visit to China in February while her counterpart Foreign Minister Yang Jiechi went to the US in March. Ministerial exchanges filled the diplomatic calendar, bringing enhanced consultation and dialogue on such issues as the global financial crisis, energy, environment, and climate change. The US secretaries of commerce and energy visited China and the first US-China Strategic and Economic Dialogue took place in Washington. In October, vice chairman of the Central Military Commission General Xu Caihou visited the United States.

The unprecedented frequency of high-level bilateral consultation generated heightened expectations - and anxiety for some - that China and the United States might join hands in managing many of the global and regional challenges, forming their own Group of 2. Although Beijing dismissed that notion, recognition is growing that China is capable of - and therefore should be - playing an important role in the changing global economy.

Within the bilateral context, growing consultation and exchanges are indicative of China's arrival as a global power as well as the increasing economic interdependence of the two countries. The United States is a major destination for exports and a critical source of investment and technology transfer for China. Annual trade between the two nations is more than $400 billion. China holds $800 billion of the US debt and its $2.3 trillion in foreign exchange reserves are dominated predominantly in US dollars.

The current global economic and financial crisis, and the US recession in particular, has hurt China's economy. Chinese exports fell precipitously in 2008 as the US market contracted, forcing millions of migrant workers to lose their jobs. At the same time, the devaluation of the US dollar due to growing deficits, threatens China's holdings of the currency.

While past patterns of US over-consumption and Chinese under-consumption cannot continue, adjustments in both countries in response to the crisis have yet to address fundamental structural problems in their economies. Nonetheless, Beijing and Washington have recognized the critical need for improving information exchanges about macro-economic policies on domestic savings and consumption and budget deficits, while refraining from protectionism to help create non-inflationary growth. In that regard, analysts were able to credit China's $586 billion stimulus package and interest rate cuts with driving a speedy recovery in economic growth to the 7-8 percent rates seen in recent quarters.

As the largest energy consumers and producers of greenhouse gases, together accounting for more than 40% of global emissions, China and the US bear special responsibility on climate change. The two governments have agreed to cooperation and continued dialogue on clean energy and the environment.

A major development in bilateral relations was the visit by General Xu Caihou to the United States in late October. The Maritime Military Consultative Dialogue has also taken place and high-level military exchange visits are scheduled for next year. As one of the most critical and fragile elements of the relationship, military-to-military exchanges serve to build confidence and deepen mutual understanding.

To sum up bilateral relations in 2009, continued momentum in parts was necessitated by the need to address global economic and financial issues and motivated by leaders in the two countries seeking a more stable and cooperative relationship that is indispensable if many global and regional economic and security challenges are to be resolved. At the same time, the strengthening and institutionalization of official bilateral channels contributes to better management of disputes and differences and to the promotion of opportunities for cooperation.

Beyond the bilateral context
Beijing and Washington share many common interests as varied as helping the global economy to recovery and restoring the international financial order, to dealing with the proliferation of weapons of mass destruction. However, differences on the issues of priority and who should bear what costs continue to prevent full cooperation.

How to resolve the North Korean nuclear weapons program is a case in point. China expressed "resolute opposition'' after North Korea's second nuclear test in May 2009, canceling a visit to Pyongyang by Chen Zhili, vice chairwoman of the National People's Congress (NPC) Standing Committee and planned visits by North Korean officials.

Most intriguingly, not only did the foreign ministry denounce the test, high-ranking officers in the People's Liberation Army (PLA) also voiced strong objections. Defense Minister General Liang Guanglie during talks with his South Korean counterpart warned against further provocation by the North and called on Pyongyang to return to the six-party talks on nuclear disarmament. PLA Deputy Chief of General Staff, Lieutenant General Ma Xiaotian, speaking at the IISS 2009 Asian Security Summit in Singapore, reiterated China's opposition to nuclear proliferation and added that the Korean peninsula should move toward denuclearization.

China subsequently supported a UN Security Council resolution imposing new sanctions on North Korea. Beijing agrees with Washington that Pyongyang should return to the Six-Party Talks and that denuclearization remains the goal. However, apart from measures directly related to North Korea's nuclear weapons program, where Beijing supports targeted sanctions, China balks at approaches aimed at isolating Pyongyang or toppling Kim Jong-il's regime. For Beijing, stability on the Korean Peninsula and the importance of having a buffer zone to its north continue to inform its policy.

Indeed, Beijing appears inclined to patient diplomacy in resolving the North Korean nuclear issue. If anything, heightened sanctions across the board could seriously destabilize the peninsula, threatening important Chinese security interests. The post-test debates among Chinese analysts notwithstanding, recent months have seen renewed high-level contact, including visits to North Korea by Premier Wen Jiabao and General Liang. China's economic ties and investments there continue to expand. Here the major difference between Beijing and Washington is not so much the ultimate denuclearization goal, but how to get there.

Iran's nuclear program is another case in point. China's growing appetite for energy supplies has prevented Beijing's full endorsement of Washington's calls for tougher actions on Tehran. Iran is among the biggest providers of oil to China. Chinese economic ties and investments in Iran are sizeable. Barring unequivocal evidence of noncompliance, Beijing is reluctant to move quickly along the sanctions path, preferring that the International Atomic Energy Agency and the P-5 plus one mechanism continue to take the lead. Granted, Russia's hardened position on Teheran and Obama's reported behind-the-scene pressure may explain China's endorsement of the IAEA censure on Iran. However, it remains to be seen what Beijing's position will be if the issue is forwarded to the United Nations Security Council with requests for new sanctions.

A major area of potential US-China cooperation in 2010 would be nuclear disarmament and the nuclear Non-Proliferation Treaty (NPT) review conference in May. Chinese responses to Obama's call in Prague for a nuclear-free world were positive but Beijing and Washington remain divided on specific steps, their sequence, and priorities. Most Chinese analysts endorse the general principles of a nuclear-free world and support the prohibition and destruction of nuclear weapons. They also argue that the United States and Russia should take the lead in drastically reducing their nuclear arsenals.

However, some have argued that instead of pursuing a nuclear-free world by cutting stockpiles, the focus should be on changing the role of nuclear weapons in national security policies. The fewer nuclear weapons incorporated into military strategies, the better the prospects for nuclear disarmament. Proponents of this perspective also call for the nuclear weapons to be banned. Depending on how the US Nuclear Posture Review turns out early next year, there could be differences over the role of nuclear weapons and pace of their reduction.

Beijing may take a rather cautious view of the road to zero and carefully analyze the implications of different scenarios for China's national security interests.

On the NPT Review Conference in May, Beijing and Washington may have common interests in strengthening the nuclear nonproliferation regime, enhancing nuclear materials security and preventing nuclear terrorism, but they could differ on the adoption by all nuclear weapons states of the no-first-use principle and the proper balance between the three pillars of the NPT - nuclear disarmament, nuclear nonproliferation, and the peaceful use of nuclear energy.

Power transition and China's arrival
While Beijing and Washington have agreed to build a bilateral relationship for the 21st century that is positive, cooperative, and comprehensive, China's continued rise to great-power status raises serious questions on how power transition can be managed and, if and when such transition takes place, whether it would be peaceful rather than create the conflict history shows to be the norm rather than the exception.

China's ascendancy gives Beijing greater confidence and influence than ever before, while at the same time stoking apprehension, not only in the United States but also in Asia. With impressive growth amid global recession and financial meltdown, foreign exchange reserves exceeding $2.3 trillion, and poised to overtake Japan as the world's second-largest economy, there is no question China's voice will likely carry more weight, just as its ambitions may also expand.

Dispelling the concerns of its neighbors, and managing the perceived threat and challenge it poses to the US, remains a major task for the Chinese leadership. Beijing's good-neighbor policy since the 1990s and the willingness it has demonstrated to embrace multilateralism and dialogue as principles for regional security has reassured states on its periphery and helped resolve boundary issues with erstwhile enemies. But convincing Washington that China's rise will remain peaceful and that Beijing harbors no ambitions to usurp the US ranking as a superpower will require diplomatic skill, resolve and, most of all, Washington to accept Beijing's pledges at face value.

And this leads to the concept of “strategic reassuranceâ€