There are potential hiccups but pragmatism rules the day for now
By Chua Chin Hon 24 January 2009
China, already wary of how the new Democrat administration will deal with trade and human rights issues, will hardly be assured by rhetoric from Washington this week.
In his debut as the new United States President on Tuesday, Mr. Barack Obama sent Chinese censors scrambling when he mentioned communism and fascism in the same breath. He called them failed ideologies which America ‘faced down not just with missiles and tanks, but sturdy alliances and enduring convictions’.
Another line from his inauguration speech also caused some China-watchers to do a double take. ‘To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history,’ said Mr. Obama.
It is unclear which country he was referring to specifically. Experts here reckoned he more likely had Iran, Syria or North Korea in mind, rather than China.
‘China is perceived as having a grip on the American economy, but I don’t think it is perceived in this country as being militantly anti-American,’ said Professor Michael Kazin of Georgetown University.
Mr. Obama’s decision two days later to close the controversial Guantanamo Bay military detention camp also raises potential hiccups for relations with China. This is because the camp is holding 17 Uighurs and the US is unwilling to return them to China for fear they would be mistreated.
Given the scope of US-China relations these days, the inaugural speech and the issue of the Uighurs are unlikely to cause a pragmatic Beijing to lose any sleep.
But what will surely make Chinese leaders sit up and take notice are some of the first words from Mr. Timothy Geithner, who is expected to be confirmed as treasury secretary on Monday.
In a 102-page written response to questions from the Senate Finance Committee deliberating his appointment, Mr. Geithner revealed that ‘US President Barack Obama - backed by the conclusions of a broad range of economists - believes that China is manipulating its currency’.
‘(He) has pledged as President to use aggressively all the diplomatic avenues open to him to seek change in China’s currency practices,’ added Mr. Geithner.
For years, US has accused China of suppressing its currency value to make its exports more attractive. The Bush administration, however, stopped short of accusing Beijing of being a ‘manipulator’.
Beijing has usually said that it will adjust the yuan’s value at an ‘appropriate time’. But there is a growing view in China that the US has no right to lecture anyone on such matters after running its own financial system into the ground.
The global economic crisis also makes the currency issue a politically-charged one for China, now that thousands of export-oriented factories are going bust or teetering on the brink of collapse.
In other words, a further appreciation of the yuan at this point is out of the question as far as China is concerned, so Mr. Geithner’s comments could not have been more poorly timed. In fact, they triggered a drop in US treasuries on fears that demand from China might fall.
Another player who could add to these early discordant notes is new US Secretary of State Hillary Clinton. She staked out the most hawkish stance against China during the presidential campaign.
Last year, following China’s clampdown on Tibetan protesters, she urged then US president George W. Bush to boycott the opening ceremony of the Beijing Olympics. In speeches along the campaign trail, she also said: ‘I’m the only candidate who isn’t just talking about cracking down on China but I have a specific plan on how to do it.’
So do all these signs point to the Obama administration adopting a more confrontational approach towards China? Closer scrutiny of Mr. Geithner’s response suggests that pragmatism will trump everything else, at least for now.
He also wrote that the yuan issue was important, ‘but given the crisis, the immediate focus needs to be on the broader issue of stabilising domestic demand in China and the US’.
A senior Asian diplomat who spoke to The Straits Times likened Sino-US ties to water finding its own level, that is, it will always return to the centre be it from the left (Democrats) or right (Republicans).
But in uncertain times, a few storms in the teacup may not be surprising.
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US Rhetoric won’t Help China Ties
There are potential hiccups but pragmatism rules the day for now
By Chua Chin Hon
24 January 2009
China, already wary of how the new Democrat administration will deal with trade and human rights issues, will hardly be assured by rhetoric from Washington this week.
In his debut as the new United States President on Tuesday, Mr. Barack Obama sent Chinese censors scrambling when he mentioned communism and fascism in the same breath. He called them failed ideologies which America ‘faced down not just with missiles and tanks, but sturdy alliances and enduring convictions’.
Another line from his inauguration speech also caused some China-watchers to do a double take. ‘To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history,’ said Mr. Obama.
It is unclear which country he was referring to specifically. Experts here reckoned he more likely had Iran, Syria or North Korea in mind, rather than China.
‘China is perceived as having a grip on the American economy, but I don’t think it is perceived in this country as being militantly anti-American,’ said Professor Michael Kazin of Georgetown University.
Mr. Obama’s decision two days later to close the controversial Guantanamo Bay military detention camp also raises potential hiccups for relations with China. This is because the camp is holding 17 Uighurs and the US is unwilling to return them to China for fear they would be mistreated.
Given the scope of US-China relations these days, the inaugural speech and the issue of the Uighurs are unlikely to cause a pragmatic Beijing to lose any sleep.
But what will surely make Chinese leaders sit up and take notice are some of the first words from Mr. Timothy Geithner, who is expected to be confirmed as treasury secretary on Monday.
In a 102-page written response to questions from the Senate Finance Committee deliberating his appointment, Mr. Geithner revealed that ‘US President Barack Obama - backed by the conclusions of a broad range of economists - believes that China is manipulating its currency’.
‘(He) has pledged as President to use aggressively all the diplomatic avenues open to him to seek change in China’s currency practices,’ added Mr. Geithner.
For years, US has accused China of suppressing its currency value to make its exports more attractive. The Bush administration, however, stopped short of accusing Beijing of being a ‘manipulator’.
Beijing has usually said that it will adjust the yuan’s value at an ‘appropriate time’. But there is a growing view in China that the US has no right to lecture anyone on such matters after running its own financial system into the ground.
The global economic crisis also makes the currency issue a politically-charged one for China, now that thousands of export-oriented factories are going bust or teetering on the brink of collapse.
In other words, a further appreciation of the yuan at this point is out of the question as far as China is concerned, so Mr. Geithner’s comments could not have been more poorly timed. In fact, they triggered a drop in US treasuries on fears that demand from China might fall.
Another player who could add to these early discordant notes is new US Secretary of State Hillary Clinton. She staked out the most hawkish stance against China during the presidential campaign.
Last year, following China’s clampdown on Tibetan protesters, she urged then US president George W. Bush to boycott the opening ceremony of the Beijing Olympics. In speeches along the campaign trail, she also said: ‘I’m the only candidate who isn’t just talking about cracking down on China but I have a specific plan on how to do it.’
So do all these signs point to the Obama administration adopting a more confrontational approach towards China? Closer scrutiny of Mr. Geithner’s response suggests that pragmatism will trump everything else, at least for now.
He also wrote that the yuan issue was important, ‘but given the crisis, the immediate focus needs to be on the broader issue of stabilising domestic demand in China and the US’.
A senior Asian diplomat who spoke to The Straits Times likened Sino-US ties to water finding its own level, that is, it will always return to the centre be it from the left (Democrats) or right (Republicans).
But in uncertain times, a few storms in the teacup may not be surprising.
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