New Great Power Relationship Strengthens China-U.S. Ties

By DIAO DAMING

LAST year was notable for leadership changes in many countries around the world, including China and the U.S. The 2012 elections in those two countries are bound to influence the future development of the world’s most important bilateral relationship.

A review of the past year shows that China-U.S. relations have had their ups and downs. Low points include the usual bout of “China-bashing” in the U.S. election, and politically motivated investigations into Chinese companies in America. The U.S. is also shifting its military focus from the Middle East to Asia, a development that worries the Chinese media. China has nevertheless judiciously and responsibly advanced under the principle of “harmony in diversity” bilateral ties according to the set strategy of building a new type of bilateral relationship befitting the world’s two great powers.

Vice President Xi Jinping reunites with old friends he got to know on his first visit 27 years ago in Muscatine, Iowa, on February 13, 2012.

Political Relations amid Elections

In 2012 the China-U.S. relationship enjoyed several high-profile exchanges, starting with Chinese Vice President Xi Jinping’s state visit to the United States. The significance of Xi’s trip was further highlighted by its coinciding with the 40th anniversary of U.S. President Nixon’s visit to China and the release of the Shanghai Communiqué signed by both countries. During his visit, Xi traversed the United States to attend 27 formal events. He communicated and interacted with people representing a broad swath of American society. In the course of Xi’s visit the two sides widened their areas of consensus, expanded their economic and trade cooperation into more fields, deepened people-to-people relationships and strengthened their dialogue on international and regional issues. What’s more, in his public speeches Xi defined bilateral ties as a new type of great power relationship for the 21st century that aims to bring benefits to the people of the two countries and maintain and contribute to the peace, stability and development of the Asia-Pacific region and the world. This new tone has helped steer China-U.S. relations out of the plights of 2012 and counteract uncertainties brought about by the U.S. presidential election.

Although national elections are prone to turn countries’ attention away from foreign affairs to some degree, 2012 top-level exchanges between China and the United State were frequent. Chinese President Hu Jintao met with his U.S. counterpart Barack Obama twice; Premier Wen Jiabao met Obama once; U.S. Secretary of State Hilary Clinton visited China four times; U.S. Defense Secretary Leon Panetta visited China once; U.S. Treasury Secretary Timothy F. Geithner paid three visits to China and top military and foreign affairs officials from both sides conducted seven extensive telephone dialogues. All these top-level exchanges ensured the two sides were able to deal appropriately with problems as they arose.

During the U.S. election campaigns, candidates for the presidency, senate and state governorships all touched on issues concerning China. Often, in order to appeal to the conservative electorate, candidates heaped excessive blame on China for the U.S.’s economic woes and promoted the “China threat” theory.

All this fuss about China has undoubtedly exposed certain prejudice and stereotypes that American society harbors toward China. However, we should also recognize that China bashing merely acted as a scapegoat in discussions of the “economy and employment,” central themes in the U.S. elections. The strategic significance of bilateral relations is too great to be weakened by election campaigns, however. To revitalize a struggling economy and maintain global leadership, the U.S. without doubt needs the cooperation of China. For this reason, mutual respect and mutual benefit should characterize the relationship in years to come.

Economic and Trade Relations Count

China-U.S. economic and trade exchanges have played an active role in stabilizing bilateral relations. According to statistics released by China’s Ministry of Commerce, in the first 10 months of 2012, bilateral trade volumes grew steadily, registering a year-on-year increase of 9.1 percent. However, at the same time, the two sides have also experienced growing contradictions and friction in the economic field. In the wake of the global financial crisis, the U.S. economy’s recovery has been sluggish, while China’s has maintained robust growth. This striking contrast has heightened the sense of crisis in the U.S. Against this backdrop, the U.S. has attempted to weaken China’s comparative advantage by questioning the RMB exchange rate, China’s labor rights and environmental protection. Accusing China of manipulating the RMB exchange rate, artificially lowering labor costs and polluting the environment does nothing to help bilateral ties. In the long term, these three issues could potentially be the catalysts for China-U.S. economic and trade conflicts. Besides, all three issues point to the underlying cause of contention: the U.S. structural trade deficit.

One notable development in recent times has been the solidification of a political barrier preventing Chinese direct investment in the U.S. Such a barrier has become a major source of contention in bilateral trade and economic relations.

In 2012, two outstanding Chinese enterprises, Huawei and ZTE, were investigated by the U.S. senate and accused of potentially jeopardizing U.S. national security. The Obama administration then intervened to prevent China’s SANY Group from establishing a factory in the country. SANY resorted to legal proceedings to defend its rights. Unfair treatment of foreign companies in the U.S. reflects the power that special interest groups hold over U.S. politicians, and the fragility of the country’s declining economy. The bright side is that Chinese enterprises have begun to develop a better understanding of the impartial U.S. legal system and, in some cases, to use it to their advantage.

The new challenges in China-U.S. economic and trade relations indicate that the devil is in the detail – ties are generally healthy, but minor bickering has the potential to flare up. It is crucial that both sides bring a positive, cooperative mindset to the negotiation table; the vitality of this new great power economic relationship will directly influence the word economy.