USA and China: Where do they stand?

APEC Summit, Asia Pivot and US midterm elections

Republicans have swept in with 52 seats in the Senate. For the first time since 2006 they have a majority in both houses of the Congress. Meanwhile President Obama is on a visit to China, from where he will go onward to Mynmar and thereon to Australia for the G-20 Summit. This weakens Obama’s position externally as other countries will not be willing to allow hard driven concessions to USA. An example is the breakdown between US and Tokyo, for the same reason. Instead they will wait for the incoming head of the American government to drive forward the bargain. On the other hand this creates an extremely interesting scenario. The President may actually end up being supported by the Republicans on fronts traditionally opposed by the Democrats. The Trans Pacific Partnership (TPP) and its fast track trade agreements are supported but opposed by the Democrats. However, Obama cannot enter into any international agreement sans Congress’ approval. This is the reason why Obama has not put up the Trade Promotion Authority (TPA) bill before Congress. He is well aware it stands to be opposed by the Democrats.

The APEC Summit is important on many levels but in order to make it successful, this and ongoing trips of the US President have to be successful.

In spite of the six points spelt out by Hilary Clinton explaining the concept of Asia Pivot — deepening our working relationships with emerging powers, strengthening bilateral security alliances, expanding trade and investments, so on and so forth — in reality, the thrust of US has not been on these or any other. The strategy has depended heavily on military cooperation.

USA needs to look at Asia in a bigger picture. Unfortunately, it has looked at countries through a narrow myopic vision whether it was Iraq, Afghanistan, India, China or Pakistan. The US is gearing its Asia Pivot approach aimed towards ‘containing China’ and to achieve this end it has opted to ally with India who has designs to lead Asia.

The situation at this level is complicated. Whereas USA views India as an ally in Asia, in fact a major ally, India will juggle a balancing act between its old ally Russia, China and USA. India will not put all its eggs in one basket. India has not long ago supported its friend Russia in Ukraine. India will use USA’s desire to its advantage on the economic front in trying to replace China on the production front. Labour cost in India is much cheaper than in China. India is also trying to work with Afghanistan, China and Iran in creating a route which is supposed to go through Kazakhstan which will then link Chahbahar Port onward to Persian Gulf. Reuters reports, “China will contribute $40 billion to set up a Silk Road infrastructure fund to boost connectivity across Asia.” (Nov 8, 2014)

The US has a complicated relationship with China, particularly regarding security issues in East and South China seas. Japan and China are entangled in a conflict over ownership of islands that Japan took from China in the first Sino-Japan conflict in 1895. In spite of US-Japan relationship that are strong on many fronts, US needs to ensure it does not endorse Japan’s stance which principally it does not till now.

There are other issues: the human rights issue the US comes down heavily on China with, and cyber-espionage to mention a few. No doubt the economies of both the countries are heavily dependent upon each other. This does not however take away the flashpoints between the two. Wei Zongyou, writing for The Diplomat, poses a very interesting question, “Clearly, the China-US relationship is not a new model of relations and interactions between a rising power and the established power. Rather, it shows all the classic manifestations of the rising power/established power historical dynamic. That begs a question: Is a new model possible?”

If one recalls a US-China defence hotline was set up in 2008. Even in 2009 when both faced naval confrontations on two occasions, this hotline was hardly ever used.

The answer is no if one goes by the traditional approach of USA. If the US understands that it can move ahead in Asia with China as a partner, then the answer will switch to a yes. China Times commenting on a meeting of both presidents writes, “They endorsed the idea of building a new model of major-country relations based on non-confrontation, non-conflict, mutual respect and win-win cooperation, with the aim of avoiding the zero-sum game usually seen in history between a rising power and an established one.” The sounds good but it will take time, sustained effort and steps taken on ground to build sustained confidence in each other.

To achieve this, the US must clarify its approach to the Asia Pivot. It must focus on growing together equally in partnership. Historically this has not been US’ forte. Its relationships have been more of a client-state nature. There too taking leave once the relationship ceases to be rewarding. One needs to look towards Afghanistan, Iraq, and Pakistan to realise the reality within this statement.

Both China and America have strong trade relations. Bilateral trade was over $500 billion in volume last year, a good place to start building the relationship from and expand on. Territorial disputes between China and its neighbouring countries have sullied the waters. “The China-US ties took another hit last month when the US Department of Justice indicted five Chinese military officers for so-called commercial espionage. China demanded the US retract the indictment, arguing that China is in fact a victim of US worldwide cyberspying and surveillance operations.” (China Times) Decision by both to drop tariffs on a wide range of technology products is a step in the right direction.

Failure to steer relationship between both to calmer waters may be the start of another Cold War. Though military superiority of US is unquestionable, China is the biggest growing market for America. In 2008, USA recovered itself from a financial crisis it found itself in by trading with China.

Instead of going ahead on its strategy of Asia Pivot with a lesser partner which in itself can create irritants and fresh flashpoints — policy makers at Washington may want to think in terms of going forward with the main Asian player. The possibilities this step will open can only be to the advantage of not only both the countries but also the region.