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By Elizabeth M. Lynch, July 31, 2009

This past Monday and Tuesday marked the sixth Strategic and Economic Dialogue (S&ED) between the U.S. and China.  Formerly just the “Strategic Economic Dialogue” and before under the sole supervision of the U.S. Treasury

Secretary Hillary Clinton & State Councilor Dai Bingguo with the Strategic Track delegation, July 28, 2009 (White House Photo/Public Domain)

Department, the inclusion of  the conjunction “and” to the title brings non-economic issues to the table as well as Secretary of State Hillary Clinton.

On day one of the two-day conference, President Obama spoke to the delegation, stressing the need for the U.S. and China to continue cooperation to guarantee a lasting economic recovery, to lessen the impact of climate change and promote “a clean, secure and prosperous energy future,” and to stop the spread of nuclear weapons in places like North Korea and Iran (these three issues were also the main thrust of an op-ed written by Secretary Clinton and Secretary of the Treasury Timothy Geithner  in Monday’s Wall Street Journal) .

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Was the S&ED successful?  Did it produce more than just mere rhetoric?  At first glance, no.  But in the relationship between the U.S. and China, sometimes even rhetoric is a step forward.  See below for a review of the issues in greater detail.

(1) Climate Change

There was definitely paper success here.  The U.S. and China signed a Memorandum of Understanding  to Enhance Cooperation on Climate Change, Energy and the Environment (MOU), but the MOU just puts on paper existing relationships and does little to further climate change cooperation.  Both governments promise to continue with the Ten Year Cooperation Framework on Energy and Environment signed just last year and both promise to promote cooperation on a variety of vague steps, including capacity building and cooperation “between cities, universities, provinces and states of the two countries.”  Perhaps this shows a greater understanding on the part of U.S. policy makers that “capacity” is something that China sincerely needs assistance with (see The U.S. in Copenhagen: Preventing Another Toothless Tiger).  Also, in a nod to the Chinese delegation’s claim of differing responsibilities between developed and developing countries, the MOU states “Consistent with equity and their common but differentiated responsibilities, and respective capabilities, the United States and China recognize they have a very important role in combating climate change” (emphasis added)  Only time will tell if any of this rhetoric becomes a reality and whether the U.S. and China can reach an agreement in time for Copenhagen, an increasingly less likely proposition.

(2) Economic Recovery

Discussion regarding economic recovery was perhaps the most public, and most interesting, of all the talks.  Showing the changing dynamic of the U.S.-China relations, Xie Xuren, the Chinese finance minister, called the U.S. to task and requested that it reduce its budget deficit.  Holding an estimated $1.5 trillion in U.S. Treasuries, the Chinese government is concerned that an increased deficit could weaken the dollar, lowering the value of their Treasuries.  At the same time, for the U.S. to decrease deficit it would need to buy less goods, further decreasing demand on China’s manufacturing sector (an unfortunate Catch-22 here for China).  While Secretary Geithner promised the Chinese delegation that the U.S. would lower its deficit once recovery has begun, he also called upon the Chinese to increase

Who's got the ball? Vice Premier Wang Qishan with Pres. Obama at the Oval Office, July 28, 2009 (White House Photo/Public Domain)

domestic demand and lower the astronomically high savings rate of its people (estimated at 50%) in an attempt to rebalance the U.S.’ trade deficit with China.

(3) Currency

Always a thorny issue, the U.S.’ repeated request that China allow its currency to strengthen was most likely discussed during the S&ED.  However, nothing about currency was mentioned publically.

(4) North Korea

China has taken a much more foreceful approach to North Korea.  In May, when North Korea first began its saber-rattling, China spoke a hard-line against its neighbor, agreeing to abide by U.N. Security Council sanctions.  Less clear is what actions China actually undertook to promote these sanctions.  And although North Korea was a main point in President Obama’s speech before the S&ED, publically, neither the U.S. nor China made any statements on how they will cooperate to contain the country.   Such silence is par for the course since North Korea is a very sensitive issue for China but at the same time, their assistance in dealing with the North Koreans is essential.

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By Elizabeth M. Lynch, July 29, 2009

On Tuesday, the Senate delayed voting on the confirmation of Jon Huntsman as the next Ambassador to China. Reason for the delay is unclear although the Senate has said that it still needs to compile paperwork.

While some in the press seem to speculate that the hold up could be due to issues related to Gov. Huntsman’s large financial holdings, it could also simply be the Senate overworked with the Sotomayor confirmation, health care reform and other issues.

Voting on Gov. Huntsman’s confirmation has been postponed to next Tuesday or Wednesday (August 4 or 5).  Congress’ last day before its month-long summer recess is Friday, August 7.  It appears that Gov. Huntsman’s  confirmation is coming down to the wire.

More information can be found here.

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By Elizabeth M. Lynch, July 25, 2009

Gov. Jon Huntsman at his confirmation hearing, July 23, 2009

Originally posted on ChinaGeeks

Thursday’s Senate confirmation hearing for the next ambassador to China was a virtual love-fest from both sides of the aisle.  Democratic senators gushed about Utah Gov. Jon Huntsman’s China background and Mandarin language skills and Republican senators John McCain, Orin Hatch and Bob Bennett attended the hearing to show their ardent support for the nominee.  There is little doubt that Gov. Huntsman – a Republican governor, nominated as Ambassador to China by a Democrat president – will be confirmed on Tuesday when the full Senate meets to vote on his nomination.  But his confirmation hearing still proved a telling sign of the Administration’s priorities in its relationship with China (nominees are always prepped for weeks prior to their hearing by Administration officials).

In his opening statement Gov. Huntsman stressed the importance of working with China on two high-priority fronts: first, repairing the international economy and second, maintaining peace and stability in Northeast Asia.  In what was likely a nod to the Chinese government and an acknowledgement of the increasing tension with North Korea as illustrated by Secretary of State Hillary Clinton’s recent trip to Asia, Gov. Huntsman highlighted China’s leadership in organizing the six-party talks and commended China on working closely, and successfully, with the U.S. and the U.N. Security Council in dealing with North Korea.  Gov. Huntsman also mentioned other areas where the U.S. and China must continue to work together: advancing global counter-terrorism efforts, stopping the spread of weapons of mass destruction, combating extremism and promoting stability in Afghanistan and Pakistan, and promoting better governance and development in places like Sudan, Burma and Zimbabwe.

Most people believe that President Obama nominated Gov. Huntsman solely for strategic reasons – to eliminate a strong Republican presidential candidate in 2012.  But that could easily be only partially true.  Another reason is that Gov. Huntsman is actually a very good pick to represent the U.S. in a relationship that has become much more delicate as it becomes more important.  Gov. Huntsman has a strong China background, experiencing first-hand Chinese societies in Taiwan (during his time as a Mormon missionary) and Singapore (as Ambassador).  Additionally, during the hearing, Gov. Huntsman supported continued human rights discussions with the Chinese, criticizing our current approach as too “on-again-off-again.” Instead he advocated for a regularized and systematic forum where issues such as freedom of religion, freedom of speech, rule of law, and access to information can continuously be discussed.  While some might argue that this was mere political posturing to secure votes from Congress, Gov. Huntsman’s statement is a noted departure from Secretary Clinton’s recent announcement that human rights cannot interfere with our handling of other crises. Such a departure provides credibility that Gov. Huntsman sincerely wants to make human rights issues a regular part of his dialogue with the Chinese.  Also, his experience in Taiwan and Singapore provide him with the alternative perspective that economic development in a culturally-Chinese society does not necessarily require the authoritarian regime that currently exists on the mainland.

Although Gov. Huntsman’s approach to human rights is slightly different from the Administration’s, he whole-heartedly supports the Administration’s focus on climate change in U.S.-China relations, deviating from many of his Republican colleagues.  In discussing caps on greenhouse gases, Gov. Huntsman maintained that the U.S. should support an agreement on climate change with China, viewing any agreement as an economic, exporting opportunity.  The U.S. will become a leader in clean air and energy efficiency industries, industries that he argued would likely dominate the global economy for the next 20 to 40 years.  Unfortunately, Gov. Huntsman did not address the intellectual property concerns of exporting U.S. clean energy technology to China, a thorny issue that will certainly prove tricky in any discussions on climate change.

The nomination of Gov. Huntsman is a telling signal that the Obama Administration perhaps grasps the realities of the new China.  The China today is not the China that existed 30 years ago when the U.S. first normalized relations.  In only the past few years, China has quickly emerged as a global leader with a strong economy, large militarily and significant influence on other countries.   Today, the U.S. negotiates with a power that in many ways is its equal; one that can easily walk away from the negotiating table.  For the next few years, the U.S. and China will have to be able to cooperate on a myriad of tough issues that could impact the future of our world order – climate change, trade, humanitarian crises, currency, terrorism, just to name a few.  It is important to have a representative in Beijing who understands how to effectively negotiate with the Chinese and find common ground between our two nations, but at the same time is willing to stand his ground when our interests diverge, which, at times, will be unavoidable.  Gov. Huntsman, with his knowledge of Chinese culture, language skills, and his courage to buck his own party and accept the nomination, could likely be the best person for the job.

Gov. Huntsman, his wife and the author (on the right) after the confirmation hearing