On agenda with China: trade challenges

A Chinese delegation preceding President Hu's visit Thursday has announced several key economic moves.

When Chinese President Hu Jintao calls on President Bush at the White House Thursday, it will undoubtedly be fraught with all the economic and strategic anxieties besetting the "superpower meets rising giant" relationship.

Yet even as the Pentagon voices concern over China's expanding military power, and Congress frets over China's economic position in a globalized world, the meeting of the two leaders can be expected to highlight cooperation and the relationship's benefits over its problems.

That's because the two countries need each other, especially economically - while the last thing either leader needs right now is another problem on his plate.

"We've got two besieged leaders in their own way, and neither one is looking to be a problem to the other, nor does he want the other to become a problem," says David Lampton, director of China Studies at Johns Hopkins University's School of Advanced International Studies in Washington.

Mr. Bush wants signs of cooperation from China: on Iran and the diplomatic effort to curtail its nuclear ambitions, on making transparency a part of China's military buildup, and on opening up the Asian giant's galloping economy.

For his part, Mr. Hu - whose visit to the White House set for last September was put off by hurricane Katrina - is anxious to lower the heat around Sino-American relations, while reducing the chances of any US actions that could put him in hot water.

"It's clear there is increasing tension between the two countries, on the economy and around security issues, so a dominant objective of Hu will be to defuse some of this," says Oded Shenkar, a global business management expert specializing in China at Ohio State University in Columbus. "[The Chinese] realize they are at a point where a little spark could set off an explosion."

Hu and other Chinese leaders are increasingly aware of a link between the course of domestic challenges and smooth relations with the United States, says Mr. Shenkar, whose recent book, "The Chinese Century," looks at China's impact on the global economy.

"Already they have seen how restrictions on Chinese garment exports affect the employment of people from the countryside," and how that in turn affects urbanization and other worrisome domestic issues, Shenkar says. "They have become more and more sensitive to how the internal and external are linked."

Evidence of that can be seen in the way the Chinese are charting the presidential visit - and in particular how they are using it to reach American public opinion.

Preceding Hu's calling at 1600 Pennsylvania Avenue is a sizable trade delegation that is already in the US, visiting 13 states and rolling out a number of contracts to buy American products. A prime objective is to demonstrate a cooperative stance on key American concerns such as the US trade deficit with China - which reached $202 billion last year.

"They are becoming more sophisticated and not just making announcements in Washington," says Mr. Lampton.

Another example of that political savvy is the way the Chinese government addressed head on the threat of two US senators, Charles Schumer (D) of New York and Lindsey Graham (R) of South Carolina, to impose a stiff tariff on Chinese imports if the Chinese currency is not allowed to float. After initially resisting a trip by the two senators to China, the government finally welcomed them - and convinced the two that its efforts on the yuan warrant putting off any precipitous trade action.

In a five-year plan dealing with the economy, the Chinese "added the goal of letting their currency float," Senator Schumer told a Monitor breakfast earlier this month. "So now we're in sync."

The trade delegation, headed by Vice Premier Wu Yi - dubbed by pundits one of the world's most powerful women - has used its time in the US to contract $16.2 billion in American products, including telecommunications items, soybeans, and 80 Boeing aircraft.

The Chinese have also announced they would reopen their market to US beef, crack down on the sale of pirated computer software, and begin talks on allowing foreign firms to compete for government contracts.

When Bush and Hu meet later this week, it may be a reciprocal worrying that best describes their countries' relationship. "The US is uncertain about the rising power's intentions, while China ... is uncertain about the stability of a relationship it needs for its economic good," said Evan Madeiros, an Asia expert at the RAND Corp., speaking recently in Washington.

Mr. Madeiros says both the US and China will employ what he calls "hedging," or a mix of cooperation and competition, for years to come as the US adjusts to China's growing clout, and China in return accommodates and resists US pressures.

Material from wire services was used in this report.

How security figures into US-China ties

As worrisome as the US-Chinese economic disputes may be, they still do not reach the level of suspicions that both sides have over security issues, most analysts say.

The United States is focused on a Chinese military buildup without transparency, China's emergence as a regional power, its efforts to develop closer energy ties to Iran - and the impact that has on China's willingness to stand with other powers opposing a nuclear-armed Iran, says Dan Blumenthal, a former China analyst in the Pentagon's Office of International Security Affairs.

"The context for all of this is a higher pitch of concern about China all across the board," says Mr. Blumenthal, now at the American Enterprise Institute in Washington.

That "higher pitch of concern" is most evident in a string of recent US documents, including the Bush administration's updated National Security Strategy and the Pentagon's Quadrennial Defense Review, which portray China as a "worrisome" power to be watched and balanced by other Asian powers.

Even if President Bush does not dwell on those estimates in his meetings with Chinese President Hu Jintao this week, the tone is unwelcome and equally worrisome to the Chinese. "They see a printed record here that is negative," says David Lampton of Johns Hopkins University's School of Advanced International Studies.

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