Respect for core interests the key issue at S&ED

By John Ross
0 CommentsPrint E-mail, May 27, 2010
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Opening this week's China-US Strategic and Economic Dialogue, President Hu Jintao repeated that the key to good relations between the two countries was 'respect for each other's core interests.' Fortunately, except for those intent on deliberately creating problems, this should objectively be one of the easier tasks in the world to carry out.

It is aided by geography. The US and China have no common borders. With regard to the other major powers in the Asian region, neither the people of Japan, China, nor the US want Japanese rearmament. The Himalayas maintain their historic role as an insurmountable military barrier to any major clash between China and India. Russia geographically entirely separates China from Europe. The US itself possesses such strong armed forces, is protected to the west by the Pacific, and to the east by the Atlantic Ocean, that it cannot be attacked militarily.

Both China and the US are dependent on foreign sources of raw materials – which means that both, equally, have an interest in an openly functioning world trading economy. As the chief economic commentator of the Financial Times, Martin Wolf, has pointed out, in the modern world economy the gains that come from trade and economic interaction are far greater than those that can be gained by military conflict.

As regards issues used by US 'neo-con' circles to try to stir up problems with China – Taiwan and Tibet; the US, if it wished to avoid problems, could easily understand the "core issues" and coherence of China's position.

It is sufficient to recall that the US civil war was fought, before it became a war on slavery, to establish the principle that states could not secede from the Union. Abraham Lincoln would never accept that the states of the Confederacy could withdraw from the US, something which every US school child is taught, and equally China will never accept that Taiwan can secede from China.

Similarly, as it showed in the 1962 Cuban missile crisis, the US was prepared to risk a world war to protect its "core interests" – that it could not be threatened by aggressive military bases close to its shores. Tibet is not only historically part of China, but also safeguards western China against military attack. Both the US and India officially, and wisely, recognize that Tibet is part of China. The US should therefore maintain that position more consistently and can expect nothing but problems on the occasions when it does not.

Leaving aside these major issues, the idea that a major conflict could break out over a question such as China's disputes over ownership of some islands with Japan, as projected for example by Bill Emmott, former editor of The Economist in his book The Rivals, is not serious. Such questions could only be the excuse for, not the cause of, a serious confrontation.

The issue on which both the US and China are major actors, but which affects the whole world, is of course the economy. Here there were differences between the two countries which were potentially destabilizing. They were the outcome of the international financial crisis.

The reality is that China has succeeded in rebalancing its economy in the new international economic situation and the US has not. Of the two major "global imbalances" – China's trade surplus and the US trade deficit – the former has almost disappeared. In the first four months of this year China's trade surplus averaged only a tiny US$4 billion a month. In contrast, for the last four months for which there are data, the US trade deficit was running at an average US$51 billion a month.

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