A Growing Disconnect

February 4, 2010 • Commentary
This article appeared in the South China Morning Post on February 4, 2010.

A nasty spat has erupted between Washington and Beijing over the Obama administration’s arms sales to Taiwan. As soon as the US made the official announcement of the US$6.4 billion package last Friday, Beijing responded with both harsh words and retaliatory measures. Deputy Foreign Minister He Yafei called in US Ambassador Jon Huntsman for a dressing down. Beijing also suspended scheduled military exchange programs and threatened to impose sanctions against any American company involved in the production or distribution of weapons destined for Taiwan.

The conventional wisdom in the United States is that this episode is no big deal. Those who take a relaxed view contend that China’s reaction is in line with its response to previous arms sales. The new brouhaha, the reasoning goes, will subside and relations will soon return to normal.

Perhaps. But the arms sale showdown is just the latest in a series of incidents stoking tensions between China and the US. Those tensions encompass economic, diplomatic and security disputes.

Even before the Obama administration took office, US officials complained about a variety of practices that they believed gave China an unfair advantage in the global economic arena. Those ranged from an undervalued currency to import dumping and arbitrary exclusion of American products from China’s domestic market. President Barack Obama’s decision to impose punitive tariffs on imported Chinese tires last summer was a signal that US patience was wearing thin.

The annoyance is not confined to trade matters. Washington has long prodded Beijing to take a firmer stance against the North Korean and Iranian nuclear programs, and especially show a willingness to back more robust economic sanctions against those two countries.

Administration leaders hoped that the summit meetings with President Hu Jintao during Obama’s visit to China would lead to progress on Washington’s grievances. That did not happen. Not only did Chinese leaders largely rebuff the president’s requests for policy changes, there was a widespread perception in the US that the Chinese treated Obama with a dismissive attitude that bordered on disdain.

That treatment created a propaganda bonanza for Obama’s domestic political opponents. Critics excoriated him for “kowtowing” to the Chinese and argued that the China summit confirmed that Obama is a diplomatic lightweight who is incapable of defending important American interests. Most telling, his staunch defenders were few and far between regarding his performance in Beijing.

China’s unwillingness to back serious carbon‐​emissions reduction measures at the Copenhagen climate change summit did not help relations with Washington. Once again the Chinese seemed to defy the Obama administration on a high‐​priority US goal.

But Beijing has its own grievances with the US. Chinese officials have expressed both veiled and explicit complaints about the huge and growing US federal budget deficits. In their view, Washington’s profligate fiscal practices threaten to trigger an inflationary spiral that would undermine the value of China’s vast dollar holdings.

Chinese leaders also grow weary of Washington’s lectures about the need to get tough with North Korea and Iran. In Beijing’s view, America’s stubborn unwillingness to address the wider security concerns of those countries is at least as responsible as the recalcitrant attitude of the two regimes for the lack of progress on the nuclear issue. Moreover, officials believe that China is being asked to take measures that would undermine vital Chinese interests. They regard North Korea as an important security buffer and Iran as a crucial energy supplier, so are extremely reluctant to antagonize either regime. The announcement of the Taiwan arms sale, coming on the heels of US Secretary of State Hillary Rodham Clinton’s harsh comment earlier the same day that China risked “isolation” within the international community if it did not endorse more robust sanctions against Iran, may have been the last straw for Beijing.

Contrary to the conventional wisdom, the Foreign Ministry’s response to the arms sale contained one element that departed from previous reactions. China had never before sought to sanction US firms for such transactions. That threat was a significant escalation and seemed contrary to Beijing’s obligations as a member of the World Trade Organization. One can hope that the conventional wisdom is right and that the latest dispute will soon fade.

But the bulk of the evidence suggests that storm clouds are building in the US‐​China relationship.

The world’s largest economy and its soon‐​to‐​be‐​main rival are not likely to become overt adversaries anytime soon, but there is a noticeable chill in the air.

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