The frequently heated exchanges and recriminations between China and the United States have been replaced by the much friendlier tone that followed the conclusion of the China-US Strategic Economic Dialogue. This program, started by President Bush, was revived by Chinese leader Hu Jin Tao and Barack Obama, and was presided over this year by Chinese vice Premier Wang Qishan and America's Chinese speaking Secretary of the Treasury, Timothy Geithner.
The Chinese news agency Xinhua began its article by reveling in Geithner's use of the Chinese proverb "share fortunes together, meet challenges together". The 2 sides, according to Xinhua produced a "milestone" agreement for mutual economic cooperation. Wang called the talks "a great success", while US Secretary of State Hillary Clinton referred to them as "productive and comprehensive".
The two sides addressed a wide range of topics including the once taboo issue of the Chinese currency exchange rates (the United States has long considered the Chinese currency artificially undervalued and designed to secure an unfair trade advantage), balanced trade, access to each other's markets etc. Military talks between the countries, moribund since 2008, were also revived at the meeting. The talk was about common interests and maintaining stability and prosperity in the Asia-Pacific region.
It seemed that both sides were making every effort to ignore bumps and slights that could have marred the talks. One possible irritant was an interview that Hillary Clinton gave to Jeffrey Goldberg of the Atlantic that focused on the Middle East but also referred to the Chinese reactions to the Jasmine Revolutions.
Secretary of State Clinton replied: "They’re worried, and they are trying to stop history, which is a fool’s errand. They cannot do it. But they’re going to hold it off as long as possible.’’ The Chinese sufficed with a low-key reply that no country is perfect in human rights, including the United States.
What accounts for the more cordial atmosphere between the 2 countries? The talks may have been termed a milestone but some of the promises such as combating software piracy have been made before and until one sees concrete results it is hard to measure the progress.
What was emphasized by both sides is that the United States and China are important trading partners. The United States is China's 2nd largest export market and China is the fastest growing American export market. The interdependence becomes even more important when one considers the diminishing alternatives. The Japanese economy may paradoxically benefit from the country's reconstruction after the disasters that befell Japan, but these investments will not necessarily benefit either the United States or China.
The financially troubled European Union is not going to be able to take up much of the slack as huge amounts of money are going to be spent propping up troubled economies, leaving no alternative but austerity. Russia is a supplier of raw materials, but it cannot help jumpstart the global economy. This leaves the United States and China with each other and therefore they have to make the best of it.
The year 2012 is an important year in both countries' political calendars. President Obama will be increasingly preoccupied with promoting his reelection and it is highly doubtful that he will stay magisterially in the White House and ignore his opponent. He will stump the country and try to rekindle the 2008 magic and enthusiasm.
For China 2012 is the year that the president and premier are replaced in an orderly succession and therefore a succession year is the not the best time to have a festering conflict on the table.