Obama's China Summit Woes: Hawks, Currency, Human Rights, More

Failure to compromise on tough economic and security issues this week will have dangerous consequences for the president and Hu Jintao. Leslie H. Gelb on why the trick is to fight off the hawks on both sides with concrete deals on critical issues.

The U.S.-China summit this week could rank among the most pivotal in history. Presidents Barack Obama and Hu Jintao can either find concrete common ground to work out increasing differences, or they can settle for friendly gasbag rhetoric that will bow to their mutual and mounting hawkish pressures. The disagreements between the two global powers are significant enough, but are being dangerously exaggerated by the military-intellectual complexes in both countries.

If Obama and Hu fail to reach tangible and practical compromises on tough economic and security issues, the consequences will be most serious: The two nations that are shaping the world to come will move from a period of modest cooperation and mutual testing to a very testy era. No one is talking about wars or anything like that. But they are talking about a level of political and economic conflict that will block cooperation and heighten international tensions.

Photos: Hu Jintao Visits the U.S.

Just days before the leaders meet in Washington, it looks like the “compromises” will be more rhetorical than substantive. On the plus side, officials say the leaders will announce tens of billions of dollars in new contracts for Beijing to purchase U.S. goods, especially civilian aircraft. On the minus side, there might be some unpleasantness on human rights, with Obama hardening his stance, and Hu telling him to mind his own business. If that is the result of the summit, hawks on both sides will rejoice.

Thus far, Obama administration officials have been trying much harder than the Hu team to find solid common ground in the danger zones, precisely to head off increasing right-wing influence on policy. U.S. officials see what hawks on both sides are doing—exaggerating threats and differences, driving those differences to sword’s point. Contrary to what U.S. hawks say, Obama officials are far from oblivious to the new Chinese tendency to muscle neighbors and others, and they are troubled by it. The White House knows well its need to demonstrate toughness. Thus, the Obama team has been walking the tricky line between pressing for needed deals with Beijing in the mutual interest and, at the same time, not looking weak.

The problem is that Chinese officials don’t seem nearly as concerned about the looming pitfalls or much disposed toward genuine compromises. On Sunday, Hu told American reporters that he wanted to seek “common ground” and build “mutual trust.” But from this side of the Pacific, their stance looks otherwise: Overall, they’re trying to sound congenial, along the lines Chinese leader Deng Xiaoping originally set for relations with Washington decades ago. Thus, the Chinese say they don’t want confrontations or bad relations with Washington, they want cooperation on economic matters. They still see the U.S. as the world’s leading economic and military power; indeed, they’re quite happy to see Washington continue to play the role of the world’s policeman.

If anything, Chinese officials are sending off signals that they think they are completely in the right about every matter in dispute, and that Washington is totally in the wrong on every count.

But scratch that surface with a few tough questions about new Chinese assertiveness and muscularity, and they can get quite emotional, even heated. If anything, Chinese officials are sending off signals that they think they are completely in the right about every matter in dispute, and that Washington is totally in the wrong on every count. In sum, many Chinese leaders, businessmen and youth are feeling their oats. They note that the U.S. is still far ahead of them, but they feel equal, if not superior, already. They’re supersensitive to what they see as being pushed around by an America used to Chinese inferiority. It’s not just that they feel a chip on their shoulders; it’s that they feel it’s their turn to lead—albeit without being willing to step forward and take responsibility for leadership. Leadership is costly. Real leaders not only assert their interests vigorously, but make compromises and sacrifices in order to lead successfully and without the costs of conflict. Chinese leaders today just appear content or determined to continue growing economically and not making any sacrifices. They are not inclined to do much by way of getting tough with North Korea or Iran, potential nuclear problems, if it requires economic or other sacrifices.

Now, if all this were not difficult enough, groups and individuals on both sides are intent on making all these differences look even worse. In the U.S., this phalanx consists of military leaders and arms manufacturers who seek to justify high defense expenditures, their congressional allies, and neoconservatives looking for a new enemy. In China, the list of culprits is long: the military, which wants an ever big slice of the economic pie in order to show their fighting punch; Chinese party and intellectual leaders, who believe their day has come to shape the future not only of China, but of the world; and business and financial interests that want to preserve all their edges.

For example, the Chinese assert that virtually the whole South China Sea, loaded with oil, gas, and other minerals, belongs to them. They say they’ve asserted for years that Beijing’s sovereignty extends way beyond the traditional 12-mile limit to include the 200-mile economic zone as well. They insist that it is the United States that’s doing the transgressing here and making the provocations by sailing U.S. Navy gunships through these waters. That position offends legal history and the equally valid claims of sovereignty by a half dozen other Asian nations including Vietnam, Japan, and the Philippines. And Washington isn’t going to allow Beijing to run roughshod over these allies and friendly nations.

Another example of China’s assertiveness is on the currency exchange rate between the dollar and the renminbi. The lower the value of the renminbi, the cheaper Chinese exports and the more expensive the American exports. While Beijing is very slowly moving the value of its currency up to more fair levels, the lack of full fairness to the U.S. and other exporters is palpable. Beijing insists, however, that the currency discrepancies, if they exist at all, don’t affect U.S. exports because the U.S. hardly exports anything that is competitive with Chinese exports. Besides not being true for the U.S., this also ignores the export disadvantages to other states.

As prickly as these issues are, others rankle at least as much. Beijing has done very little to curb its citizens and corporations from stealing U.S. copyright materials and its subsidies to its exporters. These Chinese practices damage the U.S. economy more than the unfair exchange rates. Then, there’s also the particularly touchy subject of cyberwarfare—on both sides. Who knows who’s doing how much stealing here, but the United States has far more to lose.

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American concerns about security issues are also complicated to parse. U.S. hawks are pounding the drums about increases in China’s military spending. It is increasing by double digit percentages annually, and that’s a lot, and it is worrisome. But Washington spends about $750 billion yearly on defense, while Beijing’s comparable budget is in the neighborhood of $150 billion. American hawks are also blowing their trumpets over technological advances in Chinese weaponry. For example, they’re developing better missiles, and so are we. And they are also testing new “stealthy” jet fighters ahead of schedule. But U.S. forces can still detect them and shoot them down, as Defense Secretary Gates noted. And yes, China is constructing an aircraft carrier. Well, theirs will be far from state of the art, and we have 11 carrier battle groups which will dominate the oceans for many moons to come.

Look, I don’t like to see these military advances. But Beijing has every right and reason to build its military power in an uncertain world where, as a great trading nation, it might need to protect the sea lanes. Every major power in history has done as much, and China is still far behind the United States. Let’s not get panicky and drive America into another Cold War. There are no good reasons to believe that China and America will come to blows. The real danger comes not from the likelihood of China or America doing things that challenge the other’s vital interests; rather, the danger derives from both sides grossly overreacting to differences and problems.

The Obama team clearly understands the stakes for this week’s summit and is sensibly searching for solid deals, even in the face of hawkish pressures. It’s now up to Chinese leaders to face down their hawks. There is plenty of time for both sides to get really tough if relations seriously deteriorate. But for now and for as far as the eye can see without hawkish distortions, Chinese and American moderates and pragmatists should not fear to pursue common interests.

Leslie H. Gelb, a former New York Times columnist and senior government official, is author of Power Rules: How Common Sense Can Rescue American Foreign Policy (HarperCollins 2009), a book that shows how to think about and use power in the 21st century. He is president emeritus of the Council on Foreign Relations.