Ralph Winnie Jr.'s Diplomatic Courier Article: "Obama and China: Moving Forward Together?"

Diplomatic Courier: "Obama and China: Moving Forward Together?"
https://docs.google.com/file/d/0B3tAu8i_sNeTYlVySWhpa1BQUDFiMTBfZE5FRnllLVU4V2lZ/edit

On January 19, 2011, U.S. President Barack Obama and Chinese President Hu Jintao issued a joint statement at the end of Hu Jintao’s visit to Washington, D.C. It proclaimed their shared commitment to a “positive, co-operative and comprehensive U.S.-China relationship.” Each party reassured the other regarding his principal concern, announcing, “The United States reiterated that it welcomes a stronger, prosperous and successful China that plays a greater role in world affairs. China welcomes the USA as an Asia-Pacific nation that contributes to peace, stability, and prosperity in the region.”

Since the 2011 meeting, the two governments have set about implementing that stated objective. Top American and Chinese officials have exchanged visits and have engaged on major strategic and economic issues. Military to military ties were restarted, and, at the unofficial level, track two talks have explored the evolution and expansion of the U.S.-Chinese relationship. However, while co-operation has increased, significant groups in both countries have claimed that a contest for supremacy between China and the United States is inevitable.

Understanding that this sentiment has major international repercussions, outgoing President Hu Jintao and incoming President Xi Jinping have both used the phrase “A new type of major power relationship” to describe their hopes for the future of U.S.-China relations. However, neither the United States nor the Chinese government has speculated about what such a relationship would entail as neither government has provided official endorsement nor provided any specific content to the concept. Therefore, this will become the immediate task of the second Obama administration and the new Xi Jinping administration in order to ensure that U.S.-China relations move in a positive direction.

Given that the perception of the Obama administration is that China has made significant progress in allowing its currency to appreciate against the dollar, relations are likely to improve over the course of the next four years. However, the Obama administration will continue to urge China to do more, in behind-the-scenes negotiations, to allow further currency appreciation, to protect the intellectual property of American companies, to reform the financial system in China, and to provide a level playing field for companies that might want to invest in China.

Many multi-national companies would urge Obama to avoid picking a fight with China in order to grow and expand their business in China. However, labor unions, a core constituency of the Democratic Party, will want the Obama administration to take a firmer role with China to avoid perceived layoffs and loss of manufacturing jobs in the United States. It is worth noting that some people believe that Obama’s fiscal policies do not appear to be one of restraint, but, rather, one of continued stimulus and China will remain an important linchpin as the purchaser of U.S. Treasury bonds to finance the stimulus.

Furthermore, incoming President Xi Jinping has no personal connection with Deng Xiaoping and is not personally indebted to him. The smooth leadership transition in the last quarter of 2012 has removed a major uncertainty which was hanging over the financial markets in China. As China began the New Year, there appeared to be renewed confidence among the Chinese people that political stability and better economic conditions would coincide with improved bank credit conditions that should lead to higher infrastructure spending.

One of the top priorities for Xi Jinping will be a renewed focus on the execution of the twelfth 5 Year Plan with the over-reaching objective of reforming the country’s economy from a manufacturing to an innovation lead economy. In broad terms, it is likely that under the Xi Jinping administration there will be a commitment to urbanization and raising of living standards against a backdrop of demand for resources and solving pollution issues.

It is important to note that Xi Jinping and the candidates for the Standing Committee of the Politburo have all had experience dealing with the United States on a personal and professional level. The mere fact of getting past succession/election politics in both China and the United States is a significant plus for bilateral relations as it means that decisions can be made without domestic considerations playing a key role.

Finally, President Obama has appointed new people to the positions of Secretary of State, Secretary of Defense, and Treasury Secretary. On balance, the candidates to succeed in these posts have the experience and commitment to maintaining a successful and productive U.S.-China partnership.

Ralph E. Winnie, Jr. has worked extensively in China, advising individuals and companies regarding Chinese business practices and customs. He has been interviewed by CCTV and Phoenix Satellite Television and was appointed as a Business Development Representative for the province of Guangxi in Southern China, responsible for the promotion of business development, tax and trade between the province of Guangxi and the United States.