China is a large and responsible country, but its chief responsibilities are to its people, alongside those commitments it has before the international community. It is not a country that has a responsibility to the United States alone. U.S. politicians certainly understand that problems in U.S.-China relations are not all rooted in the yuan exchange rate that does not satisfy U.S. requirements.
Valdaiclub.com interview with Sheng Shiliang, Chief Researcher with the Center for Global Challenges Studies, Xinhua News Agency
The modern global currency system is outdated and in desperate need of reform. So says the Chinese leadership. Consequently the yuan-dollar exchange rate has grown from a purely financial or trade factor into a political issue capable of derailing U.S.-China bilateral relations. Will the two countries be able to resolve this dispute? Or, on the contrary, will their argument about revaluing or allowing the yuan to appreciate simply drag on, tarnishing relations for years to come?
First of all, one should admit that the use of the U.S. dollar as the key international currency that others are pegged to, as set out at Bretton-Woods in 1944, failed.
© RIA Novosti.
Sheng Shiliyang, Chief Researcher with the Center for Global Challenges Studies, Xinhua News Agency
That did not stop the United States trying to use all the political and economic tools it has at its disposal to keep its currency strong. Is it advisable to continue to allow the United States to decide which currencies are in need of depreciation or which exchange rates other countries should use? Is it reasonable to spend beyond your means and make others pay for it? Is it wise to print another $600 billion dollars under the much-vaunted “quantitative easing” policy, while relying on other countries’ workforces and services in exchange for “valuable” greenbacks?
True, the yuan has appreciated 3% against the dollar in under a year, combined with inflation sending the real yuan-dollar exchange rate up 10%. Any correction of the yuan’s exchange rate that does happen will be a long and painstaking process. But it will not be the result of U.S. pressure.
China is a large and responsible country, but its chief responsibilities are to its people, alongside those commitments it has before the international community. It is not a country that has a responsibility to the United States alone. U.S. politicians certainly realize as much, just as they, no doubt, also understand that problems in U.S.-China relations are not all rooted in the yuan exchange rate that does not satisfy U.S. requirements.
Chinese and U.S. leaders have met regularly in recent years. Will they be able to build bilateral relations that could be considered strategic interaction or partnership?
Chinese President Hu Jintao’s planned visit to the United States will surely improve the general tone of bilateral relations and produce a kind of a roadmap for the next decade. Current disagreements between the two countries, founded in a chronic lack of trust, can be easily resolved. Structural conflict is much more difficult to tackle. The United States is striving to preserve its status as a global leader, and as an Asian leader, without actually being an Asian state.
China recognizes that the United States needs to protect its own interests, but neither believes in U.S. leadership nor sees why that country should have the final say in all international affairs. In practice, this argument over leadership is stale and predictable, and the U.S. desire to lead the peoples of the world looks unachievable.
The United States is unlikely to change its current policy toward China – that of containment and improving relations, of “restrictions and contacts” – any time soon, though tactical changes are possible.
U.S. President Barack Obama in his election campaign showed willingness to develop contacts and cooperation with China. However, that policy started to give way to containment in 2010 after he sensed China’s unwillingness to bow to Washington’s requests.
Even though I am an optimist, I do not see how U.S.-Chinese relations can be upgraded to a strategic partnership in the near future. Of all the major global powers, the only country China has such close relations with is Russia.
Does the “U.S. factor” threaten to influence Russian-Chinese relations? Or could the “Russian factor” affect U.S.-China interaction? Or are we dealing with an interlocking web of influence?
With the Cold War and even the “post-cold-war” eras safely in the past, interactions within the U.S.-Russia-China triangle should no longer be seen as a “zero sum game.”
Improving U.S.-China relations, if anything, promotes the development of Russian-Chinese and U.S.-Russian relations: they become more predictable, manageable and easier to coordinate. Therefore, China has been very supportive of Russia’s rapprochement with the West, and of recent changes in Russia’s political priorities.
In the long term, I believe the best result would involve establishing a system of tripartite strategic partnerships between Russia, China and the United States. On the other hand, any such new “club” that emerges should beware of turning into a trilateral alliance or a Three Party League of the World’s Top Players.
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