Obama Faces Test of Ties with Beijing

The Financial Times reports on the challenges facing the Obama administration as it defines its relationship with China:

So far this year the administration has sought to minimise the fallout from differences with China over $6.4bn in arms sales to Taiwan, a meeting between Barack Obama, president, and the Dalai Lama, and a dispute between Google and Beijing.

But all of these issues pale in comparison with the overriding economic priority of, as Washington sees it, righting the balance with China specifically and Asia generally. The goal sought by Mr Obama is for Asian economies to shift emphasis to domestic demand and away from producing cheap goods for US consumption, while the US in return increases savings rates.

It is precisely in this area where most political pressure on the administration is bearing down, as members of Congress, labour unions and Mr Obama’s political base call for a tougher line against the allegedly undervalued renminbi. It is also here that China’s self confidence, as one of the biggest buyers of US government debt, is greatest.

Also related, John Pomfret reports in the Washington Post on China’s increasingly “anti-Western” tone:

China has long felt bullied by the West, and its stronger stance is challenging the long-held assumption shared among Western and Chinese businessmen, academics and government officials that a more powerful and prosperous China would be more positively inclined toward Western values and systems.

China’s shift is occurring throughout society, and is reflected in government policy and in a new attitude toward the West. Over the past year, the government of President Hu Jintao has rolled back market-oriented reforms by encouraging China’s state-owned enterprises to forcibly buy private firms. In the past weeks, China announced plans to force Western companies to turn over their most sensitive technology and patents to Chinese competitors in exchange for access to the country’s markets.

Internally, it has carried out more arrests and indictments for endangering state security over the past two years than in the five-year period from 2003 to 2007, according to a report released Friday by the Dui Hua Foundation, a San Francisco-based human rights organization.

China has also reined in the news media and attempted to control the Internet more vigorously than in the past. This month, it announced regulations designed to make it harder for China’s fledgling community of nongovernmental organizations to get financial support from overseas. In foreign affairs, after years of playing down differences, it has reverted to a tone not heard in more than a decade, condemning recent U.S. decisions to sell weapons to Taiwan and to have President Obama meet the exiled Tibetan leader, the Dalai Lama.

March 15, 2010, 10:02 PM
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