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Obama can gain much from friendly China ties
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Many Chinese people have shown an increasing interest in the possible course of Sino-US relations during the new US administration under Barack Obama. There have been concerns over whether the incoming administration will follow the model of its predecessors in developing ties with China.

In the past, it was common for a new US president to go for a confrontation with China early in his tenure and then pursue reconciliation and cooperation as the time went by.

To create favorable domestic opinion, some newly elected US leaders have singled out China for verbal attacks. It was labeled either as Washington's strategic competitor or as a threat.

Bill Clinton and George W. Bush both chose to take a confrontationist attitude toward China during their early presidency. But bilateral ties gradually returned to normal. Some Washington officials in the two administrations even boasted of enjoying the best-ever relationship with Beijing.

Its fast growth and the world's acceptance of China as a rising economic power have made many Americans feel that it would soon catch up with or even surpass the US. They have thus tried to point fingers at China over a series of issues. For example, China has been accused of beefing up its military muscle to threaten the security of the US and its allies.

All these accusations essentially stem from their fears that a rising China would pose a serious challenge to US hegemony, a goal that has been long pursued and maintained by some US strategists and politicians since the end of the Cold War.

However, in the current situation, there is no reason for Obama's new administration to take a confrontationist attitude toward China after he is sworn in on January 20.

With $585 billion of US government bonds, China is now Washington's largest creditor. China's cooperation is very important for the the world's largest economy to emerge out of its deepest economic crisis in decades.

Washington also needs Beijing's help in the handling of some major regional issues. Under China's brokering, Korean Peninsula denuclearization issue has made remarkable headway. The new US administration will have a mountain of thorny issues to resolve.

They range from restoring peace in Iraq and Afghanistan and pushing for resolution of the Iran nuclear issue to defusing tensions between Washington and Moscow on the issue of Georgia and Ukraine. All these make it unlikely that the new administration would go into a new confrontation with China.

However, we should not underestimate the possibility that China is accused of not making due contribution to the global efforts to rescue the world's economy. That may fuel a new Sino-US confrontation during Obama's presidency.

The world economic crisis is also making China suffer a serious economic hardship. Its top priority is how to curb a sliding economy and recover market confidence. The enormous stimulus package announced by the Chinese government is mainly aimed at boosting domestic need to spur economic growth and may not be directly beneficial to the US economy.

The US should not expect China to continue to buy its new treasury bonds on a large scale given that the country already holds more than $585 billion worth of these bonds. That China chooses to hold the enormous amount of US treasury bonds but not to sell them is the largest contribution to the US economy under the current circumstances.

The long-standing trade imbalance between the two countries also proves to be an uphill task to be resolved. Despite facing a severe outside trade environment, China's export volumes are still on the rise despite a fall in the growth rate because prices of imported commodities have declined. Cheap but top-notch made-in-China goods will benefit common consumers in developed countries in these critical times.

Obama's remarks during his presidential campaign indicate his doubtful attitude toward the US trade policy on China. Like some conservatives, the president-elect blamed China's currency policy as the largest factor for its trade surplus with the US. Despite the yuan's appreciation against the dollar by a large margin in recent years, disappointed US opinions may continue to pressurize Obama's new government to demand yuan's further revaluation.

It is known that the galloping trade imbalance between the two countries is attributed to Washington's long-standing restrictions on its high-tech exports to China. Lifting of such restrictions would greatly help ease its trade deficit.

In laying out its foreign policy toward China, Obama's administration should not ignore the fact that the two countries are enjoying an ever-deepening interdependence.

The author, By Ding Yifan, is a researcher with the Development Research Center of the State Council

(China Daily December 9, 2008)

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