Wealthy Nations Daily Update - SINO US Relations

Today Chinese President Xi Jinping begins his weeklong visit to the US and is scheduled to meet President Barack Obama in Washington on Thursday and Friday. This will be President Xi’s third official meeting with Obama but nobody is expecting them to be best friends by the end of it. Although China has made significant progress towards the worthy goals within their Third Plenum and has begun adhering to international requests to liberalise their currency; since Xi’s accession to power in 2013, the “peaceful rise” of China has been tainted with aggrandizing over disputed islands, and surrounding oil rights as well as “state-sponsored, cyber-enabled economic espionage.”

The US may indeed use this opportunity to publically endorse China’s rescindment of currency manipulation in favour of the aspirations of an international reserve currency. Additionally productive dialogue is expected towards a bilateral investment treaty, climate change and anti-terrorism efforts. But the overarching concerns surround China’s recent sidestepping into behaviour unbefitting to a global superpower. We expect to see a stronger tone from the US decrying the recent escalation of cyber-attacks on US government and corporate targets.

The Ministry of Foreign Affairs of the People’s Republic of China see these encounters as an opportunity to, “deepen people-to-people friendship, expand cooperation and provide new impetus to the new model of major country relationship between China and the US.” Their perception of these summits going forward clearly recognises that this “new model” demands higher expectations for becoming a co-equal superpower. State Councillor, former Chinese Foreign Minister and former Ambassador to the US - Yang Jiechi also writes in anticipation of the meeting, “China and the US also have different views on some issues and there are sensitive issues in our bilateral relations. However, they are outweighed by our common interests and the potential of cooperation. Dialogue and cooperation is the prevailing trend.”

With perception of the Chinese economy more recently on the back foot Xi may feel more pressure to conform to some US and international demands. ‘No-drama Obama’, having already publically warned China on cybersecurity, may take further strides towards this goal. We’re hopeful that the summit makes sufficient agreement in these tensions to progress towards a bilateral investment treaty. Such a goal is certainly a common interest but still will not likely be achieved this summit. However a clear roadmap could be established which would in turn further solidarity and confidence between the two superpowers. Minor proposals such as China improving the data transparency on their expanding service sector to match that of their contracting industry sector could significantly boost foreign investment confidence.

Yang Jiechi’s remarks on the visit conclude, “Both the Chinese and the Americans believe that actions speak louder than words. With joint actions, we will write a new chapter in China-US friendship and cooperation.” The fruits of these actions and this new chapter we will continue to evaluate over the coming years.

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