Breaking barriers

 

 

US President Barack Obama's wish list during his China visit this week included seeking assistance on everything, from Global Warming to North Korea’s nuclear menace. No wonder that at conventions of the G-20 countries, China’s views are invariably sought on matters such as banking restructuring and executive disbursements. Having said that, it is also true that convincing China to take a lead will be a test. Assisting Obama will be an all-star Capitol Hill cast – secretary of state Hillary Clinton, US trade representative Ron Kirk, commerce secretary Gary Locke and treasury secretary Timothy Geithner.

So, why this visit in the first place? Well, as of today, the world is looking to China to take over a hitherto alien position of international headship. At a time when American standing is waning, China’s rank is mounting increasingly.

But there is a catch. In stark contrast to the US, China doesn’t seek to restructure the globe so to say. Its age-old principles are that of “non-intervention” in the domestic dealings of other nations. Even under Chairman Mao’s period in office, China by no means sought international dominance like the erstwhile Soviet Union – though it stimulated revolution in parts of Indo-China and beyond. Now that China has for the most part discarded or redesigned socialism to suit its goals, it’s tough to come across an explanation for whatever remains of its philosophy, principles and world view.

Reacting on the visit, Kerry Brown, a China expert at London’s Chatham House told TSI, “China wants the world to respect its position first. It knows that leadership mantle will follow. Chastise it for lack of internal democracy and freedom of speech, no body can accuse it of throwing its weight around.”

There are expectations, as well, that China will use its new-fangled strategic heft – and its adroit stroke – to help determine the most serious security concerns of the times. It is not for nothing that some of US’ erstwhile “superhero” diplomats have wished for a radically slimmer G20 – a G2, the US and China – to deal with the so-called nuclear risk caused by Iran and North Korea; the Israeli-Palestinian conflict; Indo-Pak tensions and current favourite, climate change.

In the initial bonhomie, the US has affirmed that Tibet belongs to China and there can be no compromise on its "One-China" stand. US used to have diplomatic relationship with Taiwan but it switched to Mainland China in 1979. However, US remains Taiwan's largest arms supplier.

However, the US is concerned that China might not actually like to tie its international responsibilities with its emergent economic sway. And that, according to the West, threatens, rather than strengthens, active global arrangements. On North Korea, China has been bearing diplomatic arrangements to persuade Pyongyang to end its nuclear designs. Nevertheless, it is uncertain of jeopardising the pour of Chinese oil and provisions that keeps it breathing.

In Africa, Chinese firms are investing extraordinarily in power, energy, raw material and minerals to stimulate China’s growth. The “no-strings” funding in Nigeria and Ethiopia fly in the teeth of America and its allies' decision to tie investment with upgrade of human rights and the environment in regimes that do not toe their line of thought. China has sent peacekeeping troops to Darfur but it bolsters the Sudanese regime by purchasing petroleum and supplying arms.

Nevertheless, the most litigious subject will be its currency. Washington thinks China’s currency, the Renminbi, is undervalued, giving Chinese exporters an unfair advantage. Beijing worries that the dollar is depreciating too quickly, threatening to erode the value of China’s huge holdings of United States Treasury bills.

During the meeting, President Obama pressed Beijing to allow its currency to rise, ending an effective peg to the dollar. President Hu Jintao of China, expectedly, politely declined, persisting that exchange rate restructuring will be taken up in due time. Numerous analysts state China will shift to a more flexible currency, just not now. Beijing is by now certain that ‘exchange rate’ reform lead to offers paybacks. It would, to give an example, give Beijing further hold over its monetary policy. It, as well, would bring down the cost of imports, help streamline the Chinese financial system and assist it in constructing a consumer-centric economy rather than one so profoundly reliant on exports.