Despite Summit Rhetoric, U.S. and China Remain Strategic Competitors

Publication: China Brief Volume: 5 Issue: 24

No breakthroughs were achieved from the much-anticipated summit between Presidents George W. Bush and Hu Jintao last Sunday, raising doubts as to whether the two “strategic competitors” can put their common interests ahead of deep-seated differences. This is despite both leaders’ characterization of the hour-long talk as “constructive,” with Bush adding that his brief visit would “make the important [bilateral] relationship stronger.”

Well before the tete-a-tete took place, senior officials from both the U.S. and China had played down expectations about possible agreements. The week before touching down in Beijing, Bush entertained the Dalai Lama, one of Beijing’s nemeses, in the White House. Bush’s China tour followed a summit in Kyoto with Japanese Prime Minister Junichiro Koizumi, in which the two leaders cemented closer defense cooperation—a move seen by the Hu leadership as targeting China. While in Japan, Bush also praised Taiwan, which Beijing deemed a “renegade province,” as a model of democracy. Moreover, shortly before meeting Hu, Bush visited a church in Beijing, where he called on the Chinese Communist Party (CCP) leadership to “not fear Christians who gather to worship openly.” Later he told Hu that “it is important that social, political and religious freedoms grow in China.”

Apart from China’s dissatisfactory record in religious and human rights, Bush zeroed in on China’s ever-bulging trade surplus—expected to top USD $200 billion this year—as well as the undervalued renminbi. Referring to Beijing’s miniscule appreciation of the yuan last July, Bush told reporters, “we’ve seen some movement but not much in the currency valuation.” In addition, U.S. officials have yet to persuade the Chinese government to import more categories of products and services, including American beef.

Hu has already met Bush four times this year, and steered clear of ideological debates with the U.S. President. The CCP General Secretary and State President merely reiterated that each country is entitled to its own socio-political system that reflects its unique cultural and historical background. The Chinese supremo instead played up the pragmatist approach, telling Bush that China would be willing to work with the U.S. for “mutual benefits and win-win results.” Hu’s close ally, Premier Wen Jiabao, also told Bush during their meeting that both countries should “take the long-term view” and “seek common interests because [mutual] benefits are bigger than the differences.”

What is increasingly worrisome about Sino-U.S. ties, however, is that despite the rhetoric, not much has emerged from their efforts to nurture supposed areas of common interests. Trade, which could relatively easily engender symbiotic benefits, has been especially problematic in this regard. Shortly before Bush’s visit, Beijing inked an agreement to buy $4 billion worth of Boeing 737 aircraft. Yet as Premier Wen said while visiting the U.S. two years ago, the bulk of Chinese purchases in the U.S. consisted of passenger jets and agricultural produce. During his five meetings with Bush this year, Hu raised the issue to the White House of relaxing policies governing the sale of American technology to China, particularly equipment and know-how with “dual use” components.

Sources close to the Chinese foreign trade establishment said that earlier this year the Hu-Wen leadership was hopeful that if the European Union would lift its 16-year ban on arms sales to China, Washington might allow American hi-tech firms to sell more dual-use technology to the PRC. Yet given the change of EU thinking on the embargo issue, prospects for a breakthrough for the Chinese in both Europe and the U.S. seem more distant than ever. Equally significant, little movement has been made in the area of military-to-military ties between the two countries. During his first-ever visit to China as U.S. Defense Secretary last month, Donald Rumsfeld spent most of his time lecturing the top brass of the People’s Liberation Army (PLA) on the excessive ambition and lack of transparency of the Chinese military modernization program. Rumsfeld’s tough stance prevented his Chinese hosts from even broaching the subject of the resumption of the Chinese purchase of second-tier and non-lethal military equipment from the U.S. Beijing’s foreign trade cadres have long contended that only after China is able to buy more hi-tech U.S. products and services can the bilateral trade imbalance be addressed.

In the meantime, it is most unlikely that Beijing would make a further concession regarding the Chinese currency. This is despite new threats from Senators Charles Schumer (D – NY) and Lindsey Graham (R – SC) to reintroduce legislation that would place a 27.5 percent tariff on Chinese imports failing a larger appreciation of the yuan. Privately, Chinese officials have claimed that the recent agreement with Washington on restricting the growth rate of Chinese textiles and garments exports has already had the effect of exacerbating unemployment. Moreover, dozens of Chinese manufacturers have been forced to re-locate their plants to less developed countries—including Africa—so as to beat the U.S. import quota system.

More significantly, Bush and Hu have failed to hammer out new ways in which the two countries can cooperate in the White House’s main preoccupations since 9/11: the war on terrorism and the global campaign against nonproliferation. In their joint press conference, Bush expressed thanks for the leading role that Beijing has played in the Six-Party Talks on the North Korean nuclear issue and added that the U.S. “welcome[s] China’s cooperation in the war against terror.” Yet American officials have privately expressed dissatisfaction at Beijing’s failure to apply more pressure on the Kim Jong-Il regime to honor the commitments it had made at the fourth Six-Party Talks last September.

Billed as a breakthrough, September’s “agreement in principle” mandated that Pyongyang must destroy all nuclear equipment as well as other weapons of mass destruction—in return for eventual diplomatic recognition by the U.S. At the recent fifth Six-Party Talks, however, the North Koreans reverted to familiar stalling tactics by asserting that the U.S. should first provide the DPRK with economic aid before any weapons-manufacturing facilities would be dismantled. Diplomatic sources in Washington and Beijing said the White House had earlier hoped that Hu’s much delayed trip to Pyongyang late last month would result in the Kim regime adopting a more conciliatory attitude toward the U.S. Instead, Hu seemed to have merely celebrated the comradely, “lips-and-teeth” relationship between the two Communist allies. The Chinese leadership this year has boosted economic and fuel aid to North Korea without securing from Kim an ironclad promise that his nation would give up its infamous roguish diplomacy.

Moreover, it is understood that Beijing’s position on another pariah state, Iran, has hardened. While the Hu-Wen leadership had largely acquiesced to Washington’s military action in Iraq, senior cadres have indicated that Beijing would pull out the stops to prevent their quasi-ally from being “bullied” by Washington. Indeed, Iran figured prominently in Hu’s talks with leaders of Britain, Germany and Spain during his recent swing through Europe. In light of the global competition for oil and other resources, Beijing has great expectations that its hefty investments in Iranian oil wells and infrastructure projects will translate into reliable and substantial supplies of crude in the coming decade or so.

Given that interactions between China and the U.S. have yet to yield success stories, the danger has increased that an apparently peripheral issue such as Taiwan or Iran might precipitate a sudden downturn in ties. This is despite efforts by the official Chinese media to portray the summit as “fruitful” and “mutually beneficial.” One day after the Hu-Bush tete-a-tete, the official press quoted a noted Chinese scholar on Sino-U.S. relations, Liu Xuecheng, as saying that ties had undergone a “major strategic transformation.” Liu asserted that more U.S. policymakers had taken to calling China a “stakeholder” rather than a “strategic competitor.” “Both sides are clear that consultation and dialogue instead of confrontation are the means to resolve differences,” Professor Liu said.

On the contrary, at least at the geopolitical level, both Beijing and Washington have taken heavy-handed measures to weaken the other’s position, particularly regarding the competition to be the Asia-Pacific region’s dominant power. Rounding off a marathon series of foreign visits, Hu is due to take part in the inaugural meeting of the East Asian Community (EAC) in Kuala Lumpur next month. At least from Washington’s point of view, the EAC is an attempt by “anti-U.S.” countries such as China and China’s client states to exclude the U.S. from the new regional bloc. At the same time, Hu’s strategic and military advisers are warily watching the new deployment of U.S. troops and military installations in Japan following intensive discussion between defense officials from both sides on how to extend the reach of the U.S.-Japan military alliance in Asia.

These conspiracy theories, plots and counterplots hardly made it to the surface during Bush’s 40-hour stay in Beijing. Both Bush and Hu need a foreign-policy triumph to boost their domestic position—and neither leader wants to appear confrontational. Thus Bush has invited Hu to make an official state visit to the U.S. next year, while Hu wants Bush to be on hand for the 2008 Summer Olympics. Diplomatic realities under the apparently jovial facade, however, are much starker if not outright treacherous. In internal meetings, Hu has warned CCP cadres to raise their guard against Washington’s alleged efforts to export democracy and other “ideological poison” to China. Hardliners in Washington, for their part, are monitoring the relentless aggrandizement of the PLA juggernaut with increasing unease.