As China's leadership changes, issues with the U.S remain
President Barack Obama (R) and Chinese Vice President Xi Jinping pose for photographs before meeting in the Oval Office at the White House February 14, 2012 .
November 8th, 2012
05:35 PM ET

As China's leadership changes, issues with the U.S remain

By Jamie Crawford

As President Barack Obama prepares for a second term in the White House, his administration is keeping an eye on another leadership transition now underway on the other side of the world in China. The ramifications will surely to have a global impact.

With Obama's re-election, any notion that complexity of the relationship between the world's two largest economies could somehow change overnight has been quickly dispelled.

Chinese state media issued its own view of the American election on Wednesday, saying Obama's re-election offered an opportunity to improve ties after a first term that many senior Chinese officials viewed as saying things one way then in many ways acting differently.

Regardless of the sentiment, China watchers say Obama's re-election, while not greeted with elation in Beijing, still provides some element of predictability going forward. There was perhaps greater concern if Mitt Romney had won, given how the Republican presidential candidate had turned China into the ultimate foreign policy bogeyman in the presidential campaign. Chinese officials made clear that any attempt to label their country a currency manipulator, as Romney pledged he would do his first day in office, would complicate the bilateral relationship even further.

"There is certainly an exhale with regard to continuity, in that this is the devil that they know," Christopher Johnson, a former longtime China analyst at the CIA told CNN, regarding Chinese reaction to the election. "I would say they are sanguine, but not necessarily energetic or optimistic about the result."

Cheng Li, a senior fellow with the Brookings Institution, added that as Obama has "by and large" welcomed the rise of China on the global stage, the relationship between the two countries has been able to withstand periodic episodes of tension.

Vice President Xi Jinping, who is widely expected to become the head of the ruling Communist party at the end of the current party congress, also is expected to become president of China in March of next year. He met President Obama during a visit to the United States last year, and toured the country with Vice President Joe Biden, with whom he is said to have a good relationship.

Personal chemistry aside, the issues and challenges facing the administration in its engagement with China are long and daunting. They include a gargantuan trade deficit, Chinese cyberespionage and theft of U.S. intellectual property, not to mention ever-increasing Chinese military expenditures.

But the relationship has become increasingly interdependent in today's globalized economy, and neither country is really in a position to let the relationship drift too far. Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell recently referred to the bilateral relationship as the "most consequential" of the next decade.

While the economic policies of both countries have been focused in recent years on building and strengthening the domestic sectors of their economies, some analysts say a change in policy is in order.

"We have got to get a functioning trade policy," with China says Johnson, now with the Center for Strategic and International Studies. "Right now we don't have one, and the Chinese use it repeatedly to their advantage in the region."

Pushing for more structural reforms of the Chinese economy and opening itself up to more balanced trade flows between the two countries, Johnson says, are likely to dominate the agenda with China in Obama's second term.

Then there is the so-called national security pivot or rebalancing of U.S. attention to the Asia-Pacific region after more than a decade of war in Afghanistan and Iraq. The policy is viewed with great suspicion in many sectors of China, and as a tool to contain the country's rise.

That policy, along with the Obama administration's goal of working to rid the world of nuclear weapons, has also raised the anxiety level in China in recent years analysts say.

"To the extent that our posture review is going to rely more on missile defense, (China sees) missile defense as a way of degrading their deterrent," Thomas Fingar, a former China analyst in the U.S. intelligence community told CNN. "They have got a small strategic force - missile defense, they fear, could render it ineffective."

A draft of an upcoming report to Congress on the U.S. relationship with China says China is expanding its nuclear forces to include the deployment of submarines capable of launching nuclear warheads. The congressionally mandated annual report of the U.S.-China Economic and Security Review Commission is scheduled to be released next week.

Recent statements from Secretary of State Hillary Clinton and other administration officials regarding the sovereignty of disputed islands in the East and South China Seas have also angered the Chinese leadership. The Chinese navy has stepped up its patrols periodically as a show of force.

Despite China's perceptions of current American policy, analysts say China's economic success is dependent on a strong relationship with the United States in the days, months and years ahead.

"The interdepencies go both ways," said Fingar now with Stanford University. "We are dependent on them and they are dependent on us. That puts a pretty strong floor under the relationship."

As for Xi, China's exponential economic growth over the past 15 years has introduced a variety of regional, industrial and commercial constituencies within the Chinese leadership that the new leader must deal with. U.S. policy makers are sure to watch whether those constituencies are going to push Xi to take a more balanced or confrontational approach with the Chinese relationship to the United States in the first days of his rule.

"I don't think we know the answer to that yet, they have to sort this laundry internally," says Johnson. "His instincts, I think, are to certainly favor a continued healthy bilateral relationship."

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soundoff (11 Responses)
  1. Joseph

    In a free market economy like the United States business's have the ability to set prices and have a government based minimal wage. In an open/closed economy like in China the government sets wages and prices. Chain has been expanding its international trade along with the manufacturing of products. Many countries are afraid that China will have a bigger economy than the United States by 2015. If this does happen then the euro and the dollar will lose value or become equal with the Chinese currency. As far as international relations go, the United States would not like for this to happen because there are a lot of business’s that sub their work to china because it’s cheaper. As president Obama takes his second term in office, he will be troubled with this problem. In order for China to move towards democracy/capitalism they must set laws that enable there people to be prosperous, which is the other side of the coin that doesn’t appeal to the Americans.

    November 9, 2012 at 2:07 pm | Reply
  2. Michelle

    The US is on the verge of a fiscal collapse, along with numerous other nations that China exports to. The stock market has lost credibility, and the real money is drying up, so China’s expert propaganda “Is all for Naught”. We're all going down. The difference is US has had hundreds of years of bonanza, which provided infrastructure, and a certain standard of living. It’s going to be tough, but because we have a strong foundation we’ll survive.

    China has had years of government corruption and cronyism. Interventions like the one child policy are a time bomb waiting to happen. Even after a decade of trying to reverse the policy effects, they still have a low birth rate, shrinking work force, and the over 60 is replacing the under 15. What is scary is the fact that approx.. 25% of men can’t form families. That is way too much pent up testosterone for any society to handle (war). China will implode, and I just hope we aren’t around it. “In a world of universal deceit, truth is revolutionary.” Orwell

    November 9, 2012 at 1:42 pm | Reply
  3. outspoken

    Who are these experts ? CIA paid emplyee, good for nothing. Rise of China ,of course Asia is inevitablope. Nothing can stop it.

    November 9, 2012 at 12:48 pm | Reply

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