5/9/11 

Today leaders from the U.S. and China meet in Washington for the annual U.S.-China Strategic and Economic Dialogue. There will be no dramatic breakthroughs -- instead, as Brookings's Eswar Prasad writes, the relationship moving forward should focus on "methodical if slow progress rather than on resolving major conflicts or arriving at dramatic breakthroughs." The talks will be comprehensive: a push from the U.S. for China to rebalance its economy and allow its currency to rise, making U.S. exports more competitive; a forum for the U.S. to voice concerns over China's human rights violations; and meetings between senior military officials to discuss strategic issues. All this comes on the heels of promising diplomatic cooperation -- China's efforts to reinvigorate talks with North Korea and its choice not to block UN action on Libya -- and reminds us that the complexity of the U.S.-China relationship goes beyond slogans.

Obama administration continues to push China to improve the bilateral economic relationship; competitiveness begins at home. Brookings's Prasad notes increasing pressure on the Chinese to play by the rules of the global economy: "In a speech earlier this week, U.S. Treasury Secretary Geithner reiterated a clear quid pro quo that defines the overall parameters of the bilateral economic relationship. The speech makes the U.S. position clear that in order to attain China's objectives in the bilateral relationship, China must adequately satisfy U.S. interests. China's objectives are seen as including access to high technology products, investment opportunities in the U.S. and market economy status. For its part, U.S. interests lie in greater market access for its companies, including in government procurement; stronger protection of intellectual property rights; and other reforms that would ensure a level playing field within China for domestic and foreign producers. Secretary Geithner's speech acknowledges the commitments made on some of these issues during President Hu's visit to Washington in January but, with good reason, reserves judgment on China's implementation of these commitments." 

Recent improvements have been aided by U.S.-China talks, while the best place to focus on competitiveness is at home, writes Council on Foreign Relations Senior Fellow and Director for Asia Studies Elizabeth Economy. "At the same briefing with [Assistant Secretary of State for East Asian and Pacific Affairs Kurt] Campbell, David Loevinger, senior coordinator and executive secretary for China and the S&ED [Strategic and Economic Dialogue] at Treasury, attributed a number of recent shifts in Chinese policy--the development of the offshore renminbi (RMB) market, China's plan to increase domestic consumption, and the recent appreciation in the RMB--to dialogue between the United States and China. While such claims may be a bit overstated, Loevinger hit the nail on the head when he said that the most important decisions regarding the ability of the United States to deal with the opportunities and challenges of a rapidly growing China will not take place at the S&ED, but rather will take place at home. The United States, he noted, must invest more in its intellectual infrastructure as well as create incentives for companies to invest in the United States and promote its exports abroad." That final point echoes the recommendation of a recent report from the Asia Society on the topic of Chinese investment which concluded, "In the future, the United States will attract the most desirable forms of foreign investment as long as it addresses its economic and policy problems at home." [Eswar Prasad, 5/6/11. Elizabeth Economy, 5/8/11. Asia Society, 5/11]

Dialogue comes amid a sustained crackdown on human rights; U.S. options limited but should focus on the needs of Chinese reformers. Nina Hachigian and Adam Hersh of the Center for American Progress write, "Scores of officials convene at a moment when China's autocracy seems ever more clearly to be on the wrong side of history. To fend off its own version of an Arab Spring, Beijing unleashed a wave of repression in China, imprisoning artists, lawyers, religious leaders, and political activists. The [recent] bilateral human rights dialogue with China... apparently made no headway on this situation." CFR's Economy writes that, "It also has been evident for some time that the Chinese leadership is feeling particularly threatened by dissenting voices in the wake of the revolutions in the Middle East and calls for a ‘jasmine revolution' in China."

However, as Minxin Pei of the Carnegie Endowment points out, "In the short term, the West has few effective options to make Beijing change its mind on human rights." Economy explains: "while [a grand gesture] might be a dramatic statement on our end, it is unlikely to produce any real change. Economic sanctions seem unworkable in the face of China's role in today's global economy, but perhaps an initiative by multinationals on good governance-training lawyers, supporting civil society, etc.-is doable. Above all, we should listen to the Chinese people who are engaged in the fight for greater openness. What do they want from the international community? That would seem a good place to start-if only they can have the chance to tell us." [Nina Hachigian and Adam Hersh, 5/6/11. Elizabeth Economy, 4/11/11. Minxin Pei, 4/11/11]

Range of strategic security issues on the table, from the Middle East to South Asia. Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell noted during a briefing last week, "Our intent is to have a candid and honest set of discussions on a range of issues, starting with regional problems. We want to compare notes on where we stand with respect to North Korea, and we will be very clear on what our expectations are for moving forward. We will want to talk about our joint approaches to Iran, given recent developments. And we will also look farther afield - our current interests and recent efforts to discuss issues in Sudan and elsewhere." CFR's Economy, adds, "Most importantly, perhaps, the dialogue will now include senior military representatives from both sides. Given the sporadic nature of senior military engagement in recent years, this dialogue is an excellent opportunity to re-engage as well as to gain greater insight into the role of the People's Liberation Army in the Chinese policy process." Incorporating mil-to-mil relations "provides a venue for improving trust and predictability in the overall relationship," Assistant Secretary Campbell explained. [Kurt Campbell, 5/5/11. Elizabeth Economy, 5/8/11]

Dialogue is key to navigating the complexities of the U.S.-China relationship and dealing with global challenges. CAP's Hachigian and Hersh explain that "while Washington and Beijing are managing to cooperate in some areas, they continue to have divergent interests and points of view. That's why the S&ED forum is useful-it provides a bilateral avenue in which to try to find paths of progress even when our nation and China do not see eye to eye... Though the S&ED will raise many thorny issues in the U.S.-China relationship, very few involve a head-to-head, zero-sum competition. Surprisingly, that goes even for currency." As former National Security Advisor Zbigniew Brzezinski has written, frank exchanges are central to dealing with the complexities of the U.S-China relationship: "The worst outcome for Asia's long-term stability as well as for the American-Chinese relationship would be a drift into escalating reciprocal demonization. What's more, the temptations to follow such a course are likely to grow as both countries face difficulties at home... Thirty years after their collaborative relationship started, the United States and China should not flinch from a forthright discussion of their differences - but they should undertake it with the knowledge that each needs the other. A failure to consolidate and widen their cooperation would damage not just both nations but the world as a whole. Neither side should delude itself that it can avoid the harm caused by an increased mutual antagonism; both should understand that a crisis in one country can hurt the other." [CAP, 5/6/11. Zbigniew Brzezinski, 1/2/11]

What We're Reading

A night of street fighting in Cairo between hundreds of Muslims and Christians left at least 12 people dead and two churches in flames, in the latest outbreak of sectarian tensions in the three months since the revolution that ousted President Hosni Mubarak.

President Bashar al-Assad has sent tanks deep into Syria's third largest city, Homs, escalating a military campaign to crush a seven-week-old uprising against his autocratic rule.

The UN's human rights chief in Ivory Coast said new mass graves have been found there containing the remains of more than 50 male victims.

North and South Sudan have agreed to withdraw unauthorized troops from the disputed oil-producing state of Abyei, the UN says.

More than 400 migrants from Libya had to be rescued by the Italian Coast Guard after their fishing boat hit rocks on the small island of Lampedusa.

At least six Afghan police officers have been killed in an ambush in Ghazni province, officials said.

Japan's Chubu Electric Power has agreed to suspend operations at the Hamaoka nuclear facility in central Japan, due to concerns that another earthquake might destabilize it.

As the EU considers relaxing the terms of a bailout package for Greece, the Irish government is looking for similar leniency, including a reduction in the interest rate it must pay to borrow funds.

Tens of thousands of Mexican citizens gathered in Mexico City's central square to condemn President Felipe Calderon for failing to curtail rampant bloodshed associated with drug-related organized crime.

A Cuban government opponent has died several days after being arrested and allegedly beaten by police, dissidents said.

Commentary of the Day

Saeed Kamali Dehghan investigates the ongoing power struggle between Supreme Leader Ayatollah Khamenei and President Mahmoud Ahmadinejad.

Tariq Ramadan writes that once the rejoicing at Osama bin Laden's death is over, the West must address the real issue at hand: its relationship with the Muslim world in light of the Arab Spring.

John Lee explains why Osama bin Laden's death is making Chinese leaders nervous.