This weekend the US President was on a visit to his Chinese counterpart in Beijing, in an effort to improve the two nation’s relations in general and to create an understanding of the difficulties arising in relation to the huge imbalance in the trade relations between the two countries in particular. In the weeks prior to the visit the Chinese President, Hu Jintao, introduced a new phrase of a “harmonious world”in which countries of different outlooks live together in peace. This should be seen partly as a kind of outstretched hand welcoming the US president in preparation of the upcoming visit and on the other hand partly a rebuff to American “hegemonism”. For as the Economist reports:
Yet America and China offer each other opportunities as well as threats. Mr Bush made little progress on his main demands at the meeting with Mr Hu, but said it was a “good, frank discussion”. After carefully trading talking-points, the two men must now return to trying to face down their nationalists at home. The issues between the two countries fall broadly into the categories of security and the economic relationship.
This is not the first time President Bush has visited the People’s Republic of China, and the two countries have been working together as at least nominal allies in the “War on Terror”. But still China seems to be what the Bush administration has been focusing on as the next potential threat in the future, as a looming trade dispute hovers over the two giants.
The two countries display the classic tension between an established great power and an emerging one. A bipartisan panel from America’s Congress has just issued a gloomy 263-page document saying that “China’s methodical and accelerating military modernisation presents a growing threat” to American security interests in the Pacific, though a Pentagon report in July noted that China’s ability to project force beyond its periphery is “limited” for now. But as China continues to spend huge sums on its armed forces, including adding around 100 ballistic missiles to the coast facing Taiwan each year, hawks in America are bound to worry. Though America still recognises only one China, it has promised to come to Taiwan’s aid if it is attacked from the mainland.
The Bush administration’s threat scenario seems to be two fold. The most imminent threat perceived is the unbalanced trade relations and the undervalued Yuan. In a longer perspective the US worry is over the growing Chinese military expenditure and the possibilities of force projection in relation to Taiwan and a possible spill over to surrounding neighbouring countries.
Trade tensions between China and the West is nothing new and goes back to the nineteenth century when the Chinese Qing dynasty was forced to open up its borders to western commodities by the British. At the time the big colonial powers of Europe were competing over virgin territory in Asia in an effort to open up new markets for their industrialised products which resulted in decades of war and rebellion within the Chinese empire.
The trading adventures of the US in China started a bit later, in 1899, when the US government introduced a new foreign policy called the “Open Door” policy which emphasised free trade and open borders. The same year a movement that called itself the Righteous Harmony Society, better known as the Boxers, started a rebellion against the inefficient Imperial court and the forced foreign intrusion into the Chinese hinterland, but an alliance of eight colonial powers managed to muster a counterforce and defeated the rebels three years later in 1901.
In the Aftermath of the disastrous defeat, the weakened Qing-court was compelled to sign the “Boxer Protocol”, also known as Peace Agreement between the Eight-Nation Alliance and China, undertaking to execute ten officials linked to the outbreak and to pay war reparations of the enormous sum of $333 million. This time the Qing-dynasts finally realized that in order to survive, China would have to reform.
Still the Chinese nation had to endure almost 50 more years of war and humiliation from foreign powers before the country could focus on building a new and modern state. The communist takeover in 1949 led to a new era of isolation and it was not until US President Richard Nixon started a rapprochement policy towards China in the early 1970s that China opened up to foreigners once more. The rapprochement policy ended up in a new “Open Door” policy in 1978, but this time advocated by China and its new leader Deng Xiaoping, yet again encouraging foreign trade and economic investment.
As of today, that policy seems to have paid off with a trade balance between the US and China, in favour of the latter, heading for the $200 billion mark, an annual growth rate of about 8%, an accumulated $750 billion in foreign-exchange reserves and an influx of foreign investments of a souring $53 billions(in 2003).
Another concern for the Bush administration is what is perceived as China’s aggressive pursuance of oil suppliers. The brouhaha over China National Offshore Oil Corporation’s (CNOOC) attempt to acquire UNOCAL, a middle sized American oil company, in June 2005, is just one symptom of the administration’s growing scepticism. According to the US Department of Energy (DOE) :
Chinese oil consumption is projected to reach 12 million barrels per day in 2020, of which 9 million barrels will have to be obtained abroad. With the United States also needing more imports–as much as 16 million barrels per day in 2020–the stage is being set for an intense struggle over access to the world’s petroleum supplies.
This would not be such a worrisome prospect if global petroleum output can expand sufficiently between now and 2020 to satisfy increased demand from both China and the United States–and in fact, the DOE predicts that sufficient oil will be available at that time. But many energy experts believe world oil output, now hovering at about 84 million barrels per day, is nearing its maximum or “peak” sustainable level, and will never reach the 111 million barrels projected by the DOE for 2020. If this proves to be the case, or even if output continues to rise but still falls significantly short of the DOE projection, the competition between the United States and China for whatever oil remains in ever diminishing foreign reservoirs will become even more fierce and contentious.
But the tensions run deeper than the current disputes over oil supply and trade issues and has its roots in historical and ideological differences. The historical reason for the US scepticism of the Chinese, goes back to the Chinese civil war days, when the United States actively supported Chiang Kai-shek against the Chinese communists led by Mao Zedong in the latest stage of the war. The US initially came into the conflict as negotiators between the two warring factions, but when the negotiations broke down the two Superpower’s at the time, the Soviet Union and the United States, placed their bets on each of the warring factions, in what would become an ideological war between the two for 55 years.
After the Bush administration came to power in 2001, the Pentagon seems to have dusted off defense policy papers from 1992 prepared by the under secretary of defence at the time, Paul Wolfowitz. These documents championed a policy of permanent US military supremacy in the post-cold war era and stated:
“Our first objective is to prevent the re-emergence of a new rival…that poses a threat on the order of that posed formerly by the Soviet Union. We [must] endeavour to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”
This seems to coincide with both President Bush jr.’s thoughts in a speech held during the presidential campaign in 1999 were he emphasised the importance of permanently containing China in the future and the encirclement policy of Pentagon in setting up new US military bases in Central and Southern Asia.
The Chinese on the other hand draw their US scepticism from the “Open Door” policy-days of 1899, and view the US, and specially the current US administration, as a modern “colonial power”. The US anti-Chinese involvement in the “Boxer” rebellion and later its anti-communist stance both in the Chinese civil war and now in the current dispute with Taiwan, are all viewed as examples of American hegemonism and an unjustified meddling into China’s domestic affairs. The Bush-administrations encirclement policy is seen as yet another evidence of a historical and ideological campaign started more or less a century ago. One Chinese response to the incumbent US administration’s China policy is the increased military expenditures. As the Bush-administration continues its encirclement policy :
China is trying to strengthen its relationships in Asia and further afield. This is partly a precaution against encirclement by a string of American bases around the region and an enhancement in recent years of American security ties with Japan and Taiwan. China has no bases abroad.
Another Chinese policy effort to counter the US base policy and influence in Central Asia is the forming of the Shanghai Co-operation Organisation (SCO), a security forum comprising four central Asian states plus China and Russia. In July the SCO, prompted by China and Russia, demanded a timetable for the withdrawal of American troops from member states, and in August, China and Russia staged their first joint military manoeuvres since the cold war.
What is certain is that even if both China and the United States come to terms peacefully over their economical differences, the deeper historical and ideological rifts have to be overcome before normal relations can develop. And while the sleeping Dragon has awakened and so far, pretty much beaten the old colonial powers at their own game, the the Eagle seems to hover above bewildered over the Dragon’s awakening, not knowing where to land.