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"As long as human rights are violated, there can be no foundation for peace. How can peace grow where speaking the truth is itself a crime?"

Taking Harder Stance Toward China, Obama Lines Up Allies

October 29, 2010

The New York Times
October 25, 2010

WASHINGTON -- The Obama administration, facing a
confrontational relationship with China on
exchange rates, trade and security issues, is
stiffening its approach toward Beijing, seeking
allies to confront a newly assertive power that
officials now say has little intention of working with the United States.

In a shift from its assiduous one-on-one
courtship of Beijing, the administration is
trying to line up coalitions -- among China’s
next-door neighbors and far-flung trading
partners -- to present Chinese leaders with a
unified front on thorny issues like the currency
and their country’s territorial claims in the South China Sea.

The advantages and limitations of this new
approach were on display over the weekend at a
meeting of the world’s largest economies in South
Korea. The United States won support for a
concrete pledge to reduce trade imbalances, which
will put more pressure on China to allow its currency to rise in value.

But Germany, Italy and Russia balked at an
American proposal to place numerical limits on
these imbalances, a step that would have further
isolated Beijing. That left the Treasury
secretary, Timothy F. Geithner, to make an
unscheduled stop in China on his way home from
South Korea to discuss the deepening tensions
over exchange rates with a top Chinese finance official.

Administration officials speak of an alarming
loss of trust and confidence between China and
the United States over the past two years,
forcing them to scale back hopes of working with
the Chinese on major challenges like climate
change, nuclear nonproliferation and a new global economic order.

The latest source of tension is over reports that
China is withholding shipments of rare-earth
minerals, which the United States uses to make
advanced equipment like guided missiles.
Administration officials, clearly worried, said
they did not know whether Beijing’s motivation was strategic or economic.

"This administration came in with one dominant
idea: make China a global partner in facing
global challenges," said David Shambaugh,
director of the China policy program at George
Washington University. “China failed to step up
and play that role. Now, they realize they’re
dealing with an increasingly narrow-minded,
self-interested, truculent, hyper-nationalist and powerful country."

To counter what some officials view as a surge of
Chinese triumphalism, the United States is
reinvigorating cold war alliances with Japan and
South Korea, and shoring up its presence
elsewhere in Asia. This week, Secretary of State
Hillary Rodham Clinton will visit Vietnam for the
second time in four months, to attend an East
Asian summit meeting likely to be dominated by the China questions.

Next month, President Obama plans to tour four
major Asian democracies -- Japan, Indonesia,
India and South Korea -- while bypassing China.
The itinerary is not meant as a snub: Mr. Obama
has already been to Beijing once, and his visit
to Indonesia has long been delayed. But the
symbolism is not lost on administration officials.

Jeffrey A. Bader, a major China policy adviser in
the White House, said China’s muscle-flexing
became especially noticeable after the 2008
economic crisis, in part because Beijing’s faster
rebound led to a “widespread judgment that the
U.S. was a declining power and that China was a rising power.”

But the administration, he said, is determined
"to effectively counteract that impression by renewing American leadership."

Political factors at home have contributed to the
administration’s tougher posture. With the
economy sputtering and unemployment high, Beijing
has become an all-purpose target. In this
Congressional election season, candidates in at
least 30 races are demonizing China as a threat to American jobs.

At a time of partisan paralysis in Congress,
anger over China’s currency has been one of the
few areas of bipartisan agreement, culminating in
the House’s overwhelming vote in September to
threaten China with tariffs on its exports if
Beijing did not let its currency, the renminbi, appreciate.

The trouble is that China’s own domestic forces
may cause it to dig in its heels. With the
Communist Party embarking on a transfer of
leadership from President Hu Jintao to his
anointed successor, Xi Jinping, the leadership is
wary of changes that could hobble China’s growth.

There are also increasingly sharp divisions
between China’s civilian leaders and elements of
the People’s Liberation Army. Many Chinese
military officers are openly hostile toward the
United States, convinced that its recent naval
exercises in the Yellow Sea amount to a policy of encircling China.

Even the administration’s efforts to collaborate
with China on climate change and nonproliferation
are viewed with suspicion by some in Beijing.

Mr. Obama’s aides, many of them veterans of the
Clinton years, understand that especially on
economic issues, there are elements of
brinkmanship in the relationship, which can imply
more acrimony than actually exists.

But the White House was concerned enough that
last month it sent a high-level delegation to
Beijing that included Mr. Bader; Lawrence H.
Summers, the departing director of the National
Economic Council; and Thomas E. Donilon, who has
since been named national security adviser.

"We were struck by the seriousness with which
they shared our commitment to managing
differences and recognizing that our two
countries were going to have a very large effect
on the global economy,” Mr. Summers said.

Just before the meeting, China began allowing the
renminbi to rise at a somewhat faster rate,
though its total appreciation, since Beijing
announced in June that it would loosen
exchange-rate controls, still amounts to less
than 3 percent. Economists estimate that the
currency is undervalued by at least 20 percent.

Meanwhile, trade tensions between the two sides
are flaring anew. The administration recently
agreed to investigate charges by the United
Steelworkers that China was violating trade laws
with its state support of clean-energy
technologies. That prompted China’s top energy
official, Zhang Guobao, to accuse the
administration of trying to win votes -- a barb
that angered White House officials.

Of the halt in shipments of rare-earth minerals,
Mr. Summers said, "There are serious questions,
both in the economic and in the strategy realm,
that are going to require close study within our government.”

Beijing had earlier withheld these shipments to
Japan, after a spat over a Chinese fishing vessel
that collided with Japanese patrol boats near
disputed islands. It was one of several recent
provocative moves by Beijing toward its neighbors
— including one that prompted the administration to enter the fray.

In Hanoi in July, Mrs. Clinton said the United
States would help facilitate talks between
Beijing and its neighbors over disputed islands
in the South China Sea. Chinese officials were
livid when it became clear that the United States
had lined up 12 countries behind the American position.

With President Hu set to visit Washington early
next year, administration officials said Mrs.
Clinton would strike a more harmonious note in
Asia this week. For now, they said, the United
States feels it has made its point.

"The signal to Beijing ought to be clear," Mr.
Shambaugh said. "The U.S. has other closer, deeper friends in the region."
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