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A princeling's progress

Source : BUSINESS_STANDARD
Last Updated: Tue, Feb 21, 2012 19:40 hrs

Vice-President Xi Jinping of the People’s Republic of China visited the United States last week, in a trip that bore all the characteristics of a state visit. The pomp underlined the fact that Mr Xi is widely expected to take over as China’s leader soon. Oddly mirroring American presidential candidates, Mr Xi made speeches to important interest groups, went to sports matches, and swung through the US’ vast farm belt — where he stressed his connections to Iowa, where he briefly lived in the 1980s, and posed for photo ops with his former host family and on a tractor. The bonhomie, however, served more than one purpose. Not only did it raise Mr Xi’s profile further back home in China, where he is known, more than anything else, for having married a popular singer; but it also served to both paper over and emphasise the continuing disagreements between China and the US over trade and security.

This is an election year in the United States, and the country’s economy remains weak. Unsurprisingly, therefore, American politicians have raised the stakes against China of late on what they perceive as its restrictive and manipulative trade practices. The front runners for the Republican presidential nominations have repeatedly talked tough; Mitt Romney has focused on the undervaluation of the Chinese yuan, which he believes is deliberate. Rick Santorum, from the ex-industrial state of Pennsylvania, has complained that manufacturing jobs have vanished to China. US President Barack Obama, in his State of the Union speech in January, responded to this rhetoric with some of his own, insisting that his government had been much more proactive in filing challenges at the World Trade Organisation. Mr Xi’s charm was supposed to help reduce tensions somewhat, and the atmospherics have indeed changed to a degree. When he appeared with US Vice-President Joe Biden at a trade conference in Los Angeles, they stressed their “close, personal friendship” and insisted that imports from China created jobs as much as they destroyed them. Yet the differences were on display, too. Mr Xi insisted in several speeches that the only way to close the yawning trade deficit that the US has with China was to step up its exports of high-tech goods, which were restricted. China’s imports of such goods have gone up by 23.5 per cent a year over the past decade, but the share of US-based firms has shrunk by over 10 per cent. Calls to reverse this, however, are unlikely to go down well in Washington, DC. Such exports are strictly controlled for security reasons, and the geostrategic implications of China’s rise are being as closely watched as the trade deficit.

Indeed, the divide between the US and China on Asian security seems even more stark than their disagreements over trade. In an article in The Washington Post written to coincide with his visit there, Mr Xi attacked what he regarded as provocation from the US: “prominence to the military security agenda ... and strengthen[ed] military alliances.” The US has beefed up its engagement with Pacific Rim countries like Vietnam and Australia recently. And while the disagreements on trade may lose some of their fire once the presidential race is done and forgotten, the security disagreements are not likely to.




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