The Obama administration is preparing for President Hu Jintao’s state visit this week by laying out its policies on a number of thorny issues and readying not one but two dinners between the two presidents. According to a report in the New York Times, it all heralds a new, more assertive stance toward China:
The more assertive strategy comes after Mr. Obama was criticized as appearing to kowtow to China in his visit there in 2009, and then again for allowing Beijing to get the upper hand against the United States at the Group of 20 summit meeting in Seoul late last year.
In Seoul, instead of getting hammered on its currency, China managed to persuade Europe to join it in rejecting core elements of Mr. Obama’s strategy of stimulating growth before focusing on deficit reduction. In addition, several major nations accused the Federal Reserve of deliberately devaluing the dollar in an effort to put the costs of America’s competitive troubles on trading partners, rather than taking politically tough measures to rein in spending at home.
The result was that Mr. Obama appeared on the world stage as a leader of a country losing ground to a rising China.
Administration officials are determined that this will not happen during the visit to Washington this week. For one thing, the slight improvements in the American economy, coupled with a handful of political successes for Mr. Obama at home, will put the president in a stronger position, administration officials and some Asia analysts said.
More significant, they said, is that administration officials have now concluded that they can publicly challenge China on security and economic issues and still build a mature relationship.
The New York Times has also published an editorial about U.S.-China relations in light of Hu’s upcoming visit:
For a long time we weren’t sure if President Obama had a China strategy. (Beyond muting criticism and hoping for cooperation.) We are increasingly reassured.
Officials acknowledge that China must have a bigger say in the world and believe there are common interests to build on — but they are rightly not ceding anything. Mr. Obama has made clear that he won’t stand by while China tries to bully its neighbors. The United States has embraced India and Southeast Asia more closely and shored up alliances with South Korea and Japan.
We know less about China’s strategy. Its overconfidence is clear. It has been aggressively pressing its claims to disputed islands in the East and South China Seas. The military’s rising influence is troubling.
McClatchy reports that one aim of Hu Jintao’s visit to Washington is to increase Chinese investment in U.S. companies, which so far is lagging behind competitors in Asia and Europe:
Chinese companies invested only $791 million in U.S. firms in 2009, the last full year of data available from the U.S. Bureau of Economic Analysis. South Korean companies invested $12 billion, Japanese firms $264.2 billion, German firms $218 billion, and British companies $453 billion.
As Chinese President Hu Jintao visits the U.S. this week, he’s likely to announce some new business deals, as has been his practice when visiting other nations.
To be sure, China’s state companies are shopping abroad, just not here. A Chinese silicon company is preparing to buy a Norwegian metals giant for $2.6 billion. State-owned PetroChina invested almost $2 billion last year in Canadian oil producers. Late last year the China Petrochemical Corp. took a big stake in Brazilian offshore oil exploration.
“In years past, we saw the emergence of China’s economic clout, but we didn’t really, until recently, see the expansion … to investing abroad. … This may be the first year where outward investment from China exceeds inward investment,” said Myron Brilliant, senior vice president of international affairs for the U.S. Chamber of Commerce. “China is increasingly taking the capital it has in its reserves and investing that overseas.”
