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Aug 11, 2010 | 11:10 GMT

7 mins read

New Points of Friction in U.S.-China Relations

It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.
An expected visit by Chinese President Hu Jintao to the United States in September is "highly unlikely," according to the South China Morning Post, citing Chinese diplomats who claimed that lower-level negotiations in preparation for the visit have not finished on time and no further talks had been planned. Of course, Hu's trip was not set in stone and rumors have suggested it may be canceled due to running disputes between the two states. Nevertheless, the latest indications after the G-20 meeting in Canada in late June suggested the meeting would be held, and now that expectation has been put into doubt. A failure by Hu to visit the United States in September — which could result in no visit this year despite U.S. President Barack Obama's invitation in November 2009 — would be representative of the widening rifts between the world's two largest economies. These rifts split the two countries across a range of economic, political and military policies. The trade relationship is a perennial source of ill feeling, and longstanding disputes in this area are set to heat up again following the latest economic statistics out of China. In July, the Chinese trade surplus grew by 170 percent compared to last July, reaching nearly $29 billion, the highest level since January 2009, on robust exports and lower-than-expected imports. While the outlook for China's domestic economy is darkening for the second half of the year, the immediate snapshot shows a China that continues to benefit from surging exports. This comes at a time when the United States has suffered another round of negative news, including a reinforcement of high unemployment levels. Washington sees the trade imbalance with Beijing as a contributing factor to its economic pain and a result of mercantilist policies, and has demanded that Beijing address the problem by at the very least allowing its tightly controlled currency to fluctuate more freely. Beijing signaled in June that it would do so, prompting the United States to refrain from criticizing China in a key report, but in the nearly two months since, the yuan has not risen as much as a full percentage point against the U.S. dollar. Needless to say, Washington senses that it has become a dupe to empty assurances at a time when President Obama's popularity is suffering, and U.S. congressional representatives — many facing elections in November — need concrete results to show voters they are stopping Chinese policies from hurting American jobs. Therefore, the July news will provide U.S. politicians with more ammunition to bring against China, while heightening China's own economic anxieties and likely making it more reactive to U.S. demands. Military tensions have also worsened, beyond the current freeze on military-to-military talks or spats over U.S. arms sales to Taiwan. If Hu does not visit Obama this year, it will be reminiscent of the fact that in June China canceled a planned visit by U.S. Secretary of Defense Robert Gates. Military friction has risen as the United States has sought to bolster its alliances in the Asia Pacific region following heightened security risks on the Korean peninsula, and has reached out to old and new partners as part of its re-engagement policy with Southeast Asia, including an offer to mediate disputes over boundaries in the South China Sea. Over the past few months it became apparent to Washington that China had even less intention of cooperating with the United States in handling North Korea than in handling Iran. By issuing numerous diplomatic protestations and conducting a series of military exercises in its neighboring seas, the Chinese sought to deter the United States from moving forward with what it considered provocative actions, namely deploying the USS George Washington nuclear aircraft carrier in the Yellow Sea, the maritime approach to China's capital city and strategic core. China's harsh reaction to the U.S. plan initially appeared to gain China a symbolic victory. The United States appeared eager to avoid confrontation, whether it feared offending China or merely wanted to let regional tempers cool. But in recent weeks the United States redoubled its response, declaring that it would in fact send the aircraft carrier to future exercises in the Yellow Sea, and then, on Aug. 8, sending it on a separate visit to Vietnam to commemorate the restoration of U.S.-Vietnamese ties in 1995, followed by a round of exercises between the USS John McCain and the Vietnamese navy that began on Tuesday. Enhanced U.S. cooperation with Vietnam has caused deep consternation in China, since Vietnam is a traditional rival and the most aggressive opponent to Beijing's expanding claims of authority in the South China Sea. The United States has accelerated its involvement in Southeast Asia and has sought to build credibility for this policy with states that fear favoring the United States will expose them to hostility from China while not providing them with compensatory guarantees. While the United States claims the policy merely consists of reaching out to natural partners, maintaining normal bilateral relations and asserting the U.S. Navy's right to sail on international waters, China sees it as a siege strategy and an attempt to constrain China's national security and regional influence. It also views the policy as an early attempt to stop China from securing its advantage in the region before the United States frees up more room for maneuver by withdrawing from Iraq and Afghanistan. Most alarming for Beijing has been the rapidity with which the United States has begun to implement the policy. The last thing China needs, as it heads into a generational leadership transition in 2012, is intensified pressure on its periphery from the global superpower. The United States has long planned to revamp its policy in Southeast Asia, after effectively washing its hands of the region after the end of the Cold War. But aside from increased counterterrorism cooperation with a number of states following 9/11, U.S. plans have repeatedly been deferred in the face of more pressing matters in the Middle East and South Asia. There is no shortage of reasons for the United States to advance this policy now, regardless of Chinese objections, since the United States foresees a range of economic benefits and security advantages arising from greater ties with the Association of Southeast Asian Nations states. But China's uncompromising response to the ChonAn incident in particular seems to have given the United States greater impetus. Over the past few months it became apparent to Washington that China had even less intention of cooperating with the United States in handling North Korea than in handling Iran. The United States became aware that if it failed to make a strong show of alliance solidarity, the credit would go to China for deterring it, which would reverberate throughout the region to the detriment of Washington's engagement policy and broader interests. The United States thus appears to have chosen not only to bulk up its existing alliance structure but also to speed up the Southeast Asia push that was already under way. This is adding new points of friction to the U.S.-China relationship, even as longstanding disagreements show no sign of abating.

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