US and China, Locked in Equal Embrace (Updated)

On the eve of President Obama’s arrival in Shanghai, there is much analysis of the U.S.-China relationship in the world press, with a general focus on America’s growing reliance on China. From The Guardian:

The US says it seeks a “comprehensive partnership” with China in what Jon Huntsman, new US ambassador to Beijing, calls “the most important bilateral relationship in the world”. This is music to the ears of Chinese foreign policy advisers in Beijing who have often worried about the underlying “inequality” in US-China relations.

The presidents whom they advised, Jiang and now Hu Jintao, can privately tell internal critics that their long-term strategic policy of putting the relationship with the US first has paid off.

More openly, the US secretary of state, Hillary Clinton, has warned the US military establishment that China should be regarded as a partner, not an adversary.

Does China perhaps have the upper hand in this relationship, as it measures another 8% growth in GDP against the limping US economy? Hardly so, if we consider the real implication of the familiar statistic that China now holds $800bn in US Treasury bonds.

Obama may ask Beijing to revalue the Renminbi; Hu may ask Washington to “focus on its own financial deficit”, but the Chinese surplus rides on the American debt as if on the back of the Old Man of the Sea: neither can let go of the other.

And John Pomfret in the Washington Post says, “The Chinese are ‘changing us'”:

On visits to Shanghai and Beijing, Obama will encounter not simply a rising global power but a nation that is transforming and challenging the way Americans live overseas and at home, from college classrooms to real estate offices to the ginseng farms of central Wisconsin.

Americans have been selling Panax quinquefolius to China since 1784 when the first China-bound trading ship sailed from New York to Canton, today’s Guangzhou, weighed down with 30 tons of the root, prized in Asia for medicinal properties. But today the U.S. ginseng industry, centered here in Wisconsin, is on its back, kicked down by bogus imitations from Chinese competitors and state-subsidized crops from Canada.

Twenty years ago, 1,500 farmers grew ginseng in Wisconsin for the China market; now the number is down to 150. Prices have dropped from $60 a pound to $24. The farmers around the ginseng barrels on this rainy fall night looked for an answer from Chun Yu, a Chinese businessman dangling his company’s chain of 1,000 retail stores throughout China as the ultimate prize.

“Years ago, it didn’t matter what we grew. They bought everything we had,” said Randy Ross, a 54-year-old former dairy farmer who has been growing ginseng since 1978. “Now we’ve got to learn how to satisfy them. They are changing us.”

Meanwhile, Newsweek writes that Beijing may not be ready or willing to take on the role that the U.S. is hoping it will:

Washington wants Beijing to assume more responsibility and leadership on everything from the global economic recovery to climate change to nonproliferation to regional-security headaches.

But not all of Beijing’s leaders are interested. “China doesn’t want to lead the world—it doesn’t even want to be seen as a leader of the developing world,” says Brookings Sinologist David Shambaugh, who currently lives in Beijing. “The result is that Beijing has multiple personas. It’s asking ‘what kind of power are we?’ ”

Update: Obama arrives in Shanghai, via AP:

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