Three Key Lessons from Obama’s China Tour


Three Key Lessons from Obamas China Tour

President Obama’s trip to China yielded precious little Chinese
cooperation on the Administration’s key concerns, ranging from currency
issues to Iran. That’s a sign of the shifting balance of power between two
countries that have been locked in an uneasy embrace for more than three
decades. “I underlined to President Obama that given our differences in
national conditions, it is only normal that our two sides may disagree on
some issues,” said China’s President Hu Jintao. “What is important is to
respect and accommodate each other’s core interests and major concerns.”

China’s concerns, of course, have dramatically expanded in recent years,
as was emphasized by Beijing’s anxiety over the implication for its own
dollar-denominated wealth of U.S. budget deficits. At the same time, Beijing
is in no hurry to play the “other” global superpower rule vacated by the
Soviet Union two decades ago.

Herewith, three key lessons to draw from the visit:
1. China’s Star Has Risen and America’s Has Ebbed, But the U.S. is ‘Too Big to
Fail’
As the Washington Post noted, when Bill Clinton visited Beijing a
decade ago, the U.S. owed more money to Spain than it did to China. President Obama’s America owes China some $800 billion and counting. China’s
economy is humming again, while America’s is likely to remain sluggish for
years. The sharp economic downturn, and the failure of the U.S. to impose
its will in two very costly ongoing wars in Iraq and Afghanistan, have shrunk
America’s global leverage. Today, far less powerful countries than China
routinely decline to follow Washington’s lead. An ironic dividend of
capitalism’s Cold War triumph has been the emergence of new power centers in
the world economy — Brazil, Russia, India and, of course, China.
Given its economic health and growing influence, Beijing is not simply able
to rebuff U.S. demands; it is making its own demands of the U.S., in whose
economy much of China’s own wealth is tied up. For example, U.S. officials
traveling with President Obama faced detailed questions about how the U.S.
planned to pay for health-care reform, with China increasingly alarmed at
the ballooning deficit and the gloomy economic outlook. The best thing going for the U.S. in
its economic relationship with Beijing — which holds $800 billion in U.S.
debt and some $2 trillion in dollar-denominated assets — is that for
China, the American economy is simply “too big to fail”.
While the U.S. currently needs Chinese help on a raft of economic and
geopolitical issues, Beijing is less dependent on U.S. help, although it
balks at any hint out of Washington of protectionist trade policies. While
some in Washington will criticize Obama for being too deferential and
allowing the Chinese to stage-manage the visit to avoid any domestic
discomfort, it is the shift in the real balance of power that has forced the
U.S. to change its approach to China.

2. China Doesn’t Want to Run the World, But It Has Interests That
Differ from America’s
Russia may be engaged in a geopolitical chess game with the U.S. aimed at
recovering from the demise of its great power status, but China is
different. It pushes back against U.S. initiatives only when those are
deemed inimical to its national interests. Iran is a good example. Beijing’s
heavy investment in and reliance on Iran’s energy sector make it extremely
averse to serious sanctions or strategies that create political turmoil in
Tehran. While insisting on compliance with the non-proliferation regime,
Beijing does not believe Iran represents an imminent nuclear weapons threat.
And its response to North Korea going nuclear suggests that a nuclear armed
Iran is something it could live with.
Obama went to China arguing that its emergence as a major power gives it
greater responsibility, as a partner to the U.S., in helping run the world
and tackle such global challenges as climate change and Iran. Indeed, there
was a collective shudder in Europe’s corridors of power at the idea of
global leadership being concentrated in a “G2” partnership between
Washington and Beijing. They needn’t have worried. China’s response to Obama
could be read as: “Running the world is your gig, we’re focused on running
our own country, and ensuring security in our immediate neighborhood. We
want harmonious relations with you, but don’t expect us to do anything that
we deem harmful to our national interests.” That means no serious sanctions
against Iran, regardless of what deals are struck between Washington and
Moscow, because China’s national interests require growing Iran’s energy
exports.

3. Personal Chemistry Can’t Change the World
The personal trust between President Ronald Reagan and Soviet leader Mikhail
Gorbachev was indispensable in fostering the climate for a rapid, peaceful
end to the Cold War. Presidents Clinton, Bush and now Obama have all tried
to cultivate personal relationships with their Chinese counterparts in the
hope of smoothing a tricky relationship. But the usefulness of personal
chemistry in dealing with China has strict limits, for a simple reason:
While the President of the United States is, in George W. Bush’s words, “the
decider,” his Chinese counterpart is not. He’s not a figurehead, but
executive power in Beijing is the preserve of a collective leadership in the
form of the nine-man standing committee of the Politburo of the Chinese
Communist Party — in which Hu is obviously the key player. Some observers
say this is why the Chinese try to avoid informal one-on-one meetings with
their U.S. counterparts, preferring more formal exchanges of talking points
cleared with the Politburo. The problem of dealing with opaque foreign
leadership structures is a recurring one for the Administration. Obama met
with Russia’s President Dmitry Medvedev last week to discuss sanctions
against Iran, but nothing will happen unless Prime Minister Vladimir Putin
is on board. And the Iranians themselves are even more complicated since the
traditional balance of power between the government and the clerical
leadership has been shaken up by the post-election turmoil. President
Obama’s personal charm and charisma may be a national asset when dealing
with many countries, but, through no fault of his own, China is not
necessarily one of them.
See five things the U.S. and China agree on.
See pictures of the making of modern China.

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