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Wednesday, Feb. 17, 2010

Perilous U.S.-China games


Special to The Japan Times

BEIJING — Beijing is increasingly playing hardball on every issue that brings it into contact and potential conflict with the rest of the world: democracy in Hong Kong; U.S. arms sales to Taiwan; the visit of the Dalai Lama to the White House; sanctions against Iran; the value of the renminbi; the sickly dollar; human rights; censorship of the Internet; Google and hacking; greenhouse gas emissions and climate change; the U.S. budget deficit; and a blossoming variety of trade issues.

Its strident comments, brooking no opposition on any issue, are reminiscent of an arrogant adolescent sprouting his first facial hair and muscles, full of hormones and attitude of nervous hostility toward trespassers on his space. But China, though adolescent in its attitudes, is a full-grown country with an ancient history and civilization, growing industrial muscle, the world's biggest exporter and, equally important, a nuclear-armed power with the biggest military in the world and rapidly growing and ambitious global outreach with plans for conquering space.

Larry Summers, Obama's chief economic adviser, raised an important question before he joined the Obama administration: "How long can the world's biggest borrower remain the world's biggest power?"

What is surprising and potentially frightening is that the United States, as the leading antagonist of this touchy China feeling its strength, clearly has no clue about how to deal with Beijing. In many ways Obama is doing less well than his much-maligned predecessor, George W. Bush, in understanding China. Indeed, it seems that Beijing senses the shifting political sands under Obama at home, and so is stepping up the pressure.

After all, Bush and his predecessors had sold arms to Taiwan with protests but without evoking the battery of threats that Beijing has just launched against the U.S. Indeed, the $6.4 billion package of helicopters, Patriot missiles, minesweepers and communications gear is the second half of a package announced by the Bush administration. China had known for months about the deal, said U.S. officials, the Taiwan Relations Act legally obliges the U.S. to provide arms for Taiwan's defense, and these are defensive weapons.

Yet this time, claiming that Taiwan is part of China's internal affairs, Beijing has threatened American companies supplying arms to Taiwan that they will suffer, and there are rumors that Chinese President Hu Jintao may cancel a planned visit to the U.S.

Obama treated China respectfully as a member of the G-2, the world's most important budding alliance. Visiting China in November, he deliberately refused to provoke Beijing. He snubbed the Dalai Lama by refusing to see the Tibetan spiritual leader before his visit, and raised none of the awkward questions of human rights that his predecessors had raised, for which failure he was accused by Republicans of "kowtowing" to China.

Now Obama is singing a more hostile tune. Apart from the arms sales to Taiwan and the belated visit of the Dalai Lama, Obama promised Democratic Party senators that he would be much tougher and would put "constant pressure" on China to make sure that it keeps its markets open to trade with the U.S. Leading senators from both parties have urged Obama to label China as a "currency manipulator" and impose sanctions for this.

Obama also faces demands from American companies complaining of their difficulties of doing business in China. Currency manipulation, alleged Chinese pirating, subsidies for their own exports and restrictions on exports of key raw materials are just a few of a growing number of trade spats between China and the U.S.

Perhaps Washington sees itself as the prickly parent prepared to take only so much from the increasingly stroppy China. But what is surprising is that Obama and his team have shown ineptitude in building friendships that could be useful to the U.S.

One small but symptomatic issue is the May summit between the U.S. and European Union in Madrid. Obama has snubbed Europe by saying he will not attend. You can understand Obama's reluctance to go to a summit where he has to shake hands with three different Europeans, each bearing the title "president." Yes, Europe also has to get its act together, but Obama might get a reluctant listener next time he calls Europe for help, whichever number he dials.

More surprising was the outburst by U.S. Secretary of State Hillary Clinton last month when, according to American press reports, she warned China that it risks "diplomatic isolation" as well as disruption to its energy supplies unless it joins other U.N. powers in stepping up sanctions against Iran to deter Tehran from developing nuclear weapons.

Even making allowances for U.S. frustration over Iran, and indeed over Beijing's continuing obstruction of united action to prevent Iran from blowing a hole in efforts to contain nuclear proliferation, this was not only undiplomatic but rather silly. Diplomatic isolation? Is that a threat to China? And how would Washington go about it, and what would it achieve? Would Washington pay off its debts to China first?

In his speeches, Obama has recognized that the U.S. is part of a multipolar world. In toughening his stance toward China, he drew the line at protectionist measures against China, saying, "to close ourselves off from that market would be a mistake."

Indeed it would, and a trade war between the G-2 would be not a mistake but a disaster for them and for the world. But in the old saying, "It takes two to tango." Obama is constrained by domestic politics and by Republicans determined to press home their attack, while Beijing is in its adolescent sulk and in no mood to concede anything. It is indeed a dangerous time for the world and the global economy.

Kevin Rafferty is a former managing editor of publications for the World Bank.


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