China-US: Consolidating relations

Since the visit of President Richard Nixon and his then National Security Adviser Henry Kissinger to Beijing in February 1972 and the subsequent re-establishment of diplomatic relations between the Peoples Republic of China and the United States, both sides have seemed careful not to act in any manner that would lead to the possibility of a breach in those relations and the extensive network of  economic ties that they have established over the years. The two countries have agreed to disagree over longstanding issues, letting the status quo prevail, as is largely the case of their perceptions and actions on the Taiwan-China status issue.  Or they have carried on negotiations over issues which the United States knows will not be resolved in any one sitting, or any few negotiating sessions. Such is the case with an issue which the US considers particularly important, namely, the systematic adherence of China to the rules of the World Trade Organisation (WTO).

In the interim, each side has periodically restated its positions on various matters which it considers critical to its standing, well knowing that there is not likely to be any short-run budging by the other. Thus, as China has modernized its armed forces, and feels more capable of asserting its sense of rectitude on any issue – in this case its right of a certain superiority in the South China Sea – the United States has simply reiterated its position on the need for fair and just negotiations on maritime boundaries, simultaneously asserting  particular concern for countries like the Philippines and South Korea for which, in relation to historical connections of postwar settlements, it considers itself to have a special responsibility.

On the other hand, while the United States conceded in 1972 that “there is but one China,” it continues to insist that it has special responsibilities towards Taiwan (which still, formally, considers itself  the “Republic of China”) and provides that island with up to date defence capabilities – an action against which China protests on every occasion.

This situation of mutual tolerance, in deeds if not always in words, has been facilitated by what was certainly, then, the surprise turn by China, beginning with Deng Xiaoping’s ascendancy, from economic management in which the state controlled “all the means of production, distribution and exchange,” as the old Communist slogan had it, to what is, in essence a capitalist-oriented economy, even though the state still retains substantial policy control and economic presence in various spheres. Undoubtedly the United States has taken the view that, with that orientation and the inevitable turn of the Chinese economy towards substantial engagement with the capitalist world, particularly in terms of exports to the United States, and then heavy investments made by American companies in China to take advantage of labour cost differentials, a virtually mutually unbreakable nexus now prevails between the two countries.

It is in that context that, even with major economic and geopolitical differences, both sides have sought to maintain a widespread engagement. The US believes that China is now insufficiently responsive to the importance of its currency in the present global monetary system, and to the need for periodic realignment of the yuan in a manner that will facilitate mutually profitable economic exchanges. And the US also insists that China must commit, in practice and not just through the signing of a treaty, to the rules of the WTO, including the removal of a variety of hidden subsidies to production. But the various consultations being held between the two countries, and the gradual facilitating of a Chinese presence in global economic discussions, including those relating to the present Eurozone difficulties, suggest that the US has fully taken on board that there is a rebalancing not only of global political, but global economic processes, almost insoluble without the presence of China. And a major objective of this is, naturally, to ensure that, in the recent words of a commentator, that China is seen to be “playing fair in the world economy.”

There is no better indication of the understanding of both countries’ leaderships of the necessity for continued mutual engagement than the succession of visits made by the highest Chinese leaders to the United States and vice versa in recent times. The latest of these, last week, was the visit of  Chinese Vice-President and designated President, Xi Jinping to the United States, and it was the occasion for a statement by President Obama that, “We tried to emphasize that because of China’s extraordinary development over the last two decades, that with expanding power and prosperity also comes increased responsibilities.” In parallel with this is Obama’s earlier stated view that it is now necessary for the United States to make and consolidate “a pivot to Asia,” as against the extensive resources that it has spent in various interventions all over the world, particularly in the last decade.

The United States is, of course, also aware that China’s economic influence has not made a difference only in the United States, but in major regions of the world in which the US or the NATO powers have had the traditional influence. The role of China in trading in both agricultural and mineral commodities on the African continent is now well known, leading the United States to begin to insist that the Chinese leadership should take a greater interest in the political difficulties experienced by some of those countries, most latterly Sudan.  But the US is perhaps even more keenly aware of the extensive commodity trade between China and Brazil and Argentina that has given those countries a certain diplomatic autonomy in the hemisphere and beyond; and which would also appear to be allowing them to connect with, and influence both countries and international institutions in a manner to which the US has been unaccustomed.

So the discussions between President Obama and Vice President Xi Jinping now assume even greater significance than the discussions of the earlier decades since the US recognition of the Peoples Republic. In some measure they are replacing the discussions which the US used to have with the Soviet Union, a fact which Putin’s Russia itself seems to increasingly understand. Interestingly, and surely unfortunately, some states of our Caribbean linger with the pretence that Taiwan, as the Republic of China, can still be dealt with, ignoring the diplomatic and political realities of the Peoples Republic which the United States has grasped. It may be that they consider themselves so small as not to be noticed, or noticed with consequence. But it is probably the case that China sees this as a continuing blot on Caricom as a sub-region, with necessary consequences as we seek to persuade them of the reality of Caricom as a viable diplomatic and economic entity.

Perhaps the lesson of last week’s visit of Vice President Xi is to serve as a useful reminder that even the great United States felt that it could pretend that Taiwan was the real China, but had, eventually, to concede that unreality.

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