Saturday, February 20, 2010

Cloudy with a chance of thunderstorms

No, I haven't sacrificed my studies at Fletcher for a career in meteorology, nor am I trying to predict any weather. The title instead is my expectation of Sino-U.S. relations for the next few years.

The New York Times is running a story about the differences in priorities between China and the United States. I think they hit the nail on the head about why the United States and China can't seem to agree on anything, and made a plausible argument for why China will come around and do things the American way (China doesn't want to be seen as the bad guy in the global community).

However, the piece itself is short on why the Chinese government maintains its current position on the variety of topics raised (Renminbi valuation, Iran, and American job creation). As I see it, China can't change its policies on these issues because of domestic concerns. If China were to allow its currency to appreciate (read increase) in value, then its exports would become more expensive, something that companies and consumers don't like. On Iran, China enjoys a strong position serving as the only major economic power investing in the country. As a result of the sanctions and growing Russian dissatisfaction, Iran increasingly relies on China for investment. Moreover, China benefits from the natural and energy resources it is able to extract from the country. China would love to see job creation in the States to increase demands for its exports, but it won't sacrifice Chinese jobs to make it happen.

The article mentions China's sovereignty concerns for not cooperating, but I think this misses the point. The Chinese government may very well use the sovereignty excuse for not cooperating, but really it's because the changes required of it would harm the Chinese economy and by extension domestic society. Going forward I think we can expect to see more of these instances, where deriving mutual benefit will be more difficult. However, just because something is difficult does not mean it isn't worth pursuing. After all, you don't let cloudy skies prevent you from getting things done. Neither should the American or Chinese governments.

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