May 28, 2010

In Talks, U.S. Meets Three Chinas

The following article, originally released as a GMF
Transatlantic Take, also appeared on the GMF blog ('Lone Swordsman, Lumbering Simian, Confident Manufacturer') on May 28 and on RealClearWorld ('In Talks, the U.S. Meets Three Chinas') on May 29.

BEIJING—The 798 Art District, a trendy artists’ neighborhood on Beijing’s outskirts, far removed from the resplendence of the Great Wall and Forbidden City, offers visitors some curious insights into contemporary China. In the middle of a central plaza, an installation depicts a lone swordsman defending himself against an encircling pack of large, snarling wolves. Several streets away, the form of a huge vermillion ape appears both sinister and curiously vulnerable as it reflects viewers’ gazes in its stainless-steel eyes. Nearby, in front of a cafĂ© reminiscent of Paris’ 6th arrondissement, sits a parody of Communist kitsch: two shiny red workers with oversized biceps exult as they raise aloft a giant wad of Chinese banknotes. Imaginative creations and social commentary they may be, but these three pieces are also represent aspects of contemporary Chinese policy on display at this week’s Strategic and Economic Dialogue (S&ED) with the United States.

On social values and freedoms, as well as sensitive issues close to home such as Taiwan and Tibet, Beijing acted very much as the lone swordsman surrounded by wolves. Chinese negotiators were unanimous in emphasizing the dangers of perceived slights to the country’s sovereignty. “To the Chinese people, nothing is more important than safeguarding national sovereignty and territorial integrity,” President Hu Jintao said in his opening address. The state media was even more explicit, amplifying official Chinese warnings on Taiwan and Tibet.

On the security challenges at the top of the American agenda — Iran, North Korea, and Afghanistan and Pakistan — China was the lumbering, ambivalent simian, sidestepping specifics by focusing upon consultative processes. This was, to put it charitably, unhelpful. Tensions on the Korean Peninsula have flared once again following U.S. revelations that a South Korean vessel sunk in March was the victim of a North Korean torpedo. Yet China has warned only that actions by South Korea or the United States might further aggravate the crisis, thus setting a poor precedent for any future acts of North Korean aggression.

Moreover, in a move that has garnered far less international attention, China appeared to flaunt its non-proliferation commitments by agreeing to supply Pakistan with two civilian nuclear reactors. Ironically, this move has gone unchallenged by the Obama administration because it is still holding out for greater Chinese support in preventing Iran’s nuclearization. For an administration that has staked its reputation on upholding the global non-proliferation regime, this appears a poor tactical choice.

Only on the economic track did China behave like the confident, muscular manufacturing power that it is, with the Chinese leadership appearing marginally accommodating of U.S. objectives. President Hu, in his opening address, demonstrated a willingness — at least in principle — to increasing domestic spending, balancing trade, and reducing commercial barriers. More significantly, he made explicit mention of reconsidering the renminbi exchange rate “under the principle of independent decision-making, controllability, and gradual progress” — in other words, on China’s own terms.

This watered-down concession proved the only major takeaway for U.S. negotiators. At the dialogue’s close, Treasury Secretary Timothy Geithner welcomed these developments, including exchange rate evaluation, but China’s Assistant Finance Minister Zhu Guangyao was quick to emphasize that China would “independently decide on the specific steps of its exchange rate reforms, based on its own interests, taking into account world economic conditions and China’s own development trends.” China’s continuing hesitation appears to have been brought about in part by developments in Europe, specifically the recent devaluation of the euro.

For a dialogue that brought together one of the largest collections of senior U.S. officials outside the country, representative of the full range of U.S. government functions, the tangible products of the S&ED were underwhelming: a slew of relatively minor agreements on issues ranging from shale gas to energy security to infectious diseases. The absence of major breakthroughs at a long-planned forum of this stature suggests that the United States should make other efforts to complement its comprehensive engagement with China.

The first would be to explore alternatives. At the top of Washington’s strategic agenda are issues that need not dominate the bilateral relationship with Beijing, but are featured due to a combination of China’s permanent membership of the UN Security Council and its geographical position. The logic is that China’s presence inside the tent is far more helpful than its potentially counterbalancing role outside. However, this logic, when extended, has led to the undermining of U.S. relations with a host of more willing partners, from Japan, South Korea, and Australia to NATO allies and India. Shoring up these relationships will only strengthen Washington’s engagement with Beijing on the full range of strategic and economic issues on the bilateral agenda.

The second strategy would be to employ multilateral mechanisms that complement the S&ED, something that Washington has done more successfully, particularly on the economic side. Here, the absence of political alternatives to the UN Security Council — effective strategic analogues to the G20 and International Monetary Fund — remains a significant weakness. It may seem paradoxical, but a more fruitful bilateral relationship between Washington and Beijing may only be possible if the United States looks elsewhere.