Retired Ambassador Loh I-cheng: US and China, Friends or Foes?

Commentary

Retired Ambassador Loh I-cheng: US and China, Friends or Foes?

Source: United Daily News

January 18, 2011

China’s President Hu Jintao is scheduled to embark on a state visit to the United States from January 18-21, accompanied by his wife, and the media in both countries will undoubtedly cover the trip down to the minutia.  However, for such a high-level meeting between two heads of state, one can probably only ponder issues that most concern the two nations in order to come up with an inking of what the future holds.

In November 2009, US President Barack Obama visited Beijing, so Hu Jintao is merely returning the courtesy by visiting Washington.  On the surface, the two superpowers often exchange niceties of mutual praise, but in reality Washington is the world’s hegemon and balks at giving up any ground to an increasingly assertive Beijing.  Over the past week, many American commentators have written articles offering proposals to the White House. Congressmen on Capitol Hill see Hu Jintao’s visit as a chance to consolidate their own constituencies by criticizing the Chinese leader.  With such bizarre atmospherics, the only people who clearly understand the delicate nature of Washington-Beijing relations may be the ambassadors stationed in the respective capitals: “Beijing and Washington are neither friends nor foes, both friends and foes.”

Although the US and China need each other, they also covertly wish to see the other faulter.  War is not an option in the 21^st Century.  The many difficult issues facing the two countries can only be resolved through negotiations.  Many Americans believe that Obama offended Hu Jintao by receiving the Dalai Lama last year.  But for China, Obama receiving the Dalai Lama was no more than a minor slight as Tibet is firmly under Beijing’s control, so the matter will soon be forgotten.  The core issues between the US and China are as follows:

1)     Exchange rate: The US accuses China of intentionally holding down the value of the Renminbi (RMB) in order to gain benefits from bilateral trade.  In 2010, China’s imports and exports totaled nearly US$ 3 trillion, an increase of 34.7% compared to 2009, and China’s foreign reserves totaled nearly US$ 3 trillion.

2)     US Treasury Bills Holdings: China is the largest holder of US Treasury Bills, with appropriately US$ 900 billion.  If China were to dump its Treasury holdings, the US government would face bankruptcy.

3)     The US truly wants China’s cooperation.  However, in some hot zones, including, Iran, Afghanistan, Pakistan, for the sake of its own interests, China declined to cooperate with the US and went the opposite direction.

4)     Joint military exercises between the US and South Korea in the Yellow Sea angered China.  Washington blames Beijing for allowing North Korea to defy the international community.

5)     American human rights groups congratulated and glorified Liu Xiaobo on winning the Nobel Peace Prize, provoking China.

6)     American economists believe that China’s economic growth is way too fast, threatening to spark an inflation crisis which could bring down the global economy.

Many experts in the two countries are worried about the delicate nature of the relations between the US and China.    

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