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The Obama Administration Approach to U.S. Relations with China

February 4, 2009

Many observers have been speculating about what the approach of the Obama administration to relations with China will be. Such speculation reached a frenzied pitch following recent statements by Obama’s pick to lead Treasury, Tim Geithner, on China’s currency management. In his written response to congressional questions, Mr. Geithner said that the Obama administration believes that China is manipulating its currency. He later clarified this statement by adding that now might not be the right time to brand China as a currency manipulator under U.S. law. Nevertheless, the damage had been done, and China responded with a sharp retort.

Despite this tempest in a teapot, for a variety of reasons, we need to be cautious about jumping to premature conclusions regarding the new administration’s approach to relations with China. The focus of the administration necessarily has to be on the economic/financial crisis, in which China is just one of the elements, albeit an important one. The China policy team is not yet fully in place. The administration has not yet had time to make considered judgments on all of the many issues involved in relations with China.

Nevertheless, there are a number of indicators that we can look to for clues: what we know about President Obama; what he and members of his team have already said on China-related matters; what we know about the officials who will be most directly involved in China policy; and what we know about the foreign policy agenda that the new administration will face.

First, President Obama has virtually no background in foreign policy or national security affairs, other than the knowledge gained from his brief service in the Senate. He is not well known to foreign leaders. He has never been to China.

Nevertheless, he differs from previous presidents because of the nature of his personal links to Africa and Asia: to Africa, where his father was born and died; to Indonesia, where he spent several years of his childhood. The empathy that foreigners feel for him, and that he is likely to reciprocate, is likely to lend a personal touch to his foreign policy. Certainly, he has already made clear that while Secretary of State Clinton will be the implementer of his foreign policy, the policy will be his own.

Moreover, there is extensive evidence that President Obama is a practical man, not an ideologue. This is reflected in the nature of his cabinet appointments, and his approach to the economic crisis. We can expect a similar problem-solving approach to carry over to his China policy.

During the final months of the campaign and during the two-and-a-half month long transition, he has handled himself with commendable prudence. At the same time, it must be said that his commitment to principles of free trade is one of the big question marks hanging over the administration.

Second, let’s look at what has been said. During his campaign, Senator Obama did not challenge or raise any doubts regarding the core elements in the U.S.-China relationship. His campaign web site stated that he and Joe Biden recognize the importance of maintaining the One China policy, as laid out in the Three Communiqués. On it, they also underscore that the Taiwan Relations Act undergirds our relations with Taiwan. It stressed that maintaining good relations with China and Taiwan and making clear our expectation of a peaceful resolution are the keys to avoiding a cross-strait conflict.

In his speech to the Chicago Council on Global Affairs he stated: “the emergence of an economically vibrant, more politically active China offers new opportunities for prosperity and cooperation, but also poses new challenges for the United States and our partners in the region.” This is an unexceptional and balanced statement.

In the first Democratic primary debate, Senator Obama stated: “. . . China is rising, and obviously it’s not going away. They’re neither our enemy nor our friend. They’re competitors. But we have to make sure that we have enough military-to-military contact and forge enough of a relationship with them that we can stabilize the region.” The implication is clear that he sees China both as a competitor and as a cooperative partner. This represents an interests-based approach to the relationship.

President Obama has shown a special interest in the Tibet issue. In March 2008 he condemned the Chinese crackdown on the Tibetan protests. He has said the Dalai Lama should be invited to visit China and he called for the Bush administration to press Chinese President Hu Jintao to negotiate with the Dalai Lama about his return and to guarantee religious freedom in Tibet. Given Chinese sensitivities on Tibet, this could be a point of friction.

His statements on the financial and trade-related aspects of the US-China relationship suggest that this is likely to be a problem area in the relationship. While he and Secretary Clinton were in the Senate, both tended to position themselves on trade issues from the standpoint of the domestic political aspects rather than in terms of a consistent philosophy or appreciation of the international ramifications. In March 2008 he stated that having China as our banker isn’t good for our economy, it isn’t good for our global leadership, and it isn’t good for our national security. His campaign position, as stated on his campaign web site, was that he would “use all diplomatic means at his disposal to achieve change in China’s manipulation of the value of its currency.” It also called for vigorous enforcement of our trade laws and trade agreements.

The web site also called for making China a constructive partner on international energy and environmental issues. On the policy level, the new administration has not yet confirmed whether the Strategic Economic Dialogue will be continued. The picture that emerges from these disparate statements is that the Obama administration’s approach to China will not mark a break with past administrations.

Third, there are indications the Obama administration will be giving more attention to Asia, as shown by the fact that Hillary Clinton will be making her first trip as Secretary of State to Asia, including a stop in Beijing.

Finally, the Obama administration faces a host of issues whose effective management will require U.S.-China cooperation such as North Korean and Iranian nuclear issues, the situations in Pakistan and Afghanistan (where Dick Holbrooke is readying to make his first trip as Special Envoy to the region), restructuring the global economic system, and global warming and the environment. We know from past experience that the real world exacts costs if our relationship with China is mishandled. This will be especially true in the context of the current economic crisis. In my judgment the prognosis for future U.S.-China relations is positive, but the relationship will not be without its problem areas.

Stapleton Roy is Director of the Woodrow Wilson Center’s Kissinger Institute and a former Assistant Secretary of State for Intelligence and Research. During his 45-year career at the State Department, Ambassador Roy served in Bangkok, Hong Kong, Taipei, Beijing, Singapore, and Jakarta. He is a member of The Asia Foundation’s Board of Trustees.

View all posts by J. Stapleton Roy

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