Grand strategy

The Obama-Hu Jintao interactions bring into focus a strong political nuance in America's economic diplomacy towards China.

in Singapore

THE United States no longer aspires to checkmate China by old-fashioned containment, with or without apologies to George Kennan, who first visualised such a U.S. policy in relation to the Soviet Union six decades ago. During his latest four-nation Asia tour, which ended on November 14, President Barack Obama said so in polite terms and even emphasised a new policy line.

Tracing the centrepiece of his policy, Obama said: I have been very clear and persistent since I came into office [nearly two years ago] that we welcome China's rise. In a U.S.-centric perspective, he said: The fact that China has grown as remarkably as it has, has lifted millions of people out of poverty, that is ultimately good for the world and good for America because it means that China has the opportunity to be a responsible partner [of the U.S.]. It [also] means that China can be an enormous market for the United States, for Korea, for countries throughout Asia and around the world.

Without the slang of an impromptu comment, Obama's policy towards Beijing is based on two strands of thinking about the economic dimension of China's rise. First, the U.S. is eager to do voluminous business with China, given its rise as an enormous market. Second, Washington is no less keen to court Beijing as a responsible partner in reshaping the battered global economy.

A strong political nuance in Obama's new economic diplomacy towards Beijing came into sharp focus following his latest interactions with Chinese President Hu Jintao. They had an exclusive conversation in Seoul on November 11, besides participating together in the Group of 20 (G20) Summit there on the same day and in the meeting of leaders of the Asia-Pacific Economic Cooperation (APEC) forum in Yokohama on November 12 and 13.

Obama summed up this nuance without mincing words: Precisely because of China's success, it is very important that [Beijing] act[s] in a responsible fashion internationally. And the issue of RMB [Chinese currency] is one that is an irritant not just to the United States, but is an irritant to a lot of China's trading partners and those who are competing with China to sell goods around the world. [The RMB] is undervalued. And China spends enormous amounts of money intervening in the market to keep it undervalued. And so ... it is important for China, in a gradual fashion, to transition to a market-based [currency] system. This is something that China has done in the past.

Despite the export-boosting undervaluation of the Chinese currency, Beijing would have to, in Obama's world view, discover the opportunity of becoming America's partner. In his reckoning, such an opportunity would alone sustain China's phenomenal economic growth going forward. The real issue before the international community, in this U.S.-China context, is not the degree of logical soundness in Obama's reasoning but the political impact of his perspective.

Hu, for his part, told Obama that Beijing stands ready to...move forward the China-U.S. relationship on a positive, cooperative and comprehensive track. Outwardly, Hu's response might sound as being no more than a much-practised Chinese mantra for engaging the U.S. However, the mantra, when decoded, is a formula for China's preference for two-way cooperation with the U.S. on the totality of mutually important issues. These would obviously cover the value of the Chinese currency as well.

With the G20 Summit addressing this issue in order to avert currency wars, a catch-phrase in the international media discourse on the present state of the global economy, Obama lost no time in spelling out his expectations about China. Obama's take on the G20 communique was: Letting currencies reflect market fundamentals, allowing your currency to move up and down, depending on the role that you are playing in the international trading system, is the best way to assure that everybody benefits from trade rather than just some.... It means some adjustments for China. And so, we understand that this is not [going to be] solved overnight [though].

The overwhelming accent on economic issues in Obama's official and public diplomacy towards China was in tune with the season of G20 and APEC meetings. At the same time, he did not downplay the importance of political-military issues in the U.S.-China engagement or the relevance of economics in his talks with the leaders of America's allies, Japan and Australia, on this occasion. Yet, the primacy of political-military issues in his talks with the Japanese and Australian Prime Ministers, Naoto Kan and Julia Gillard respectively, did reveal a subtle game plan.

Of telltale importance were the comments by Kan and Obama after their talks in Yokohama on November 13. Kan said: In Japan's relations with China and Russia, recently we have faced some problems, and the United States has supported Japan throughout.... For the peace and security of the countries in the [East Asian] region, the presence of the United States and the presence of the U.S. military, I believe, is only becoming increasingly important. Kan's assessments on such issues were confirmed by Obama wholeheartedly.

The commitment of the United States to the defence of Japan is unshakeable. Our alliances, bases and forward presence are essential not only to Japan's security, they help us ensure stability and address regional challenges across North-East Asia, Obama said. He also reaffirmed Washington's longstanding view that Japan stands as a model of the kind of country we would want to see as a permanent member of the [United Nations] Security Council.

While Obama was effusive that the United States does not have a closer or better ally than Australia, Julia Gillard said our two countries are great mates. Obama's obvious game plan in refocussing special attention on Australia and Japan was to signal the U.S.' continuing efforts to limit China's political-military options as a newly risen power in East Asia and beyond. This is seen by the U.S. and its allies as being compatible with a policy of welcoming China's economic rise as an opportunity.

COMPREHENSIVE PARTNERSHIP

In this dual policy towards China, Obama has now sought to co-opt Indonesia as well. Relevant to this argument is the proposed deepening of political and security cooperation under the framework of Washington's new Comprehensive Partnership with Jakarta. Several reasons, other than the actual or potential China factor, were cited, though, as the foundation of this new partnership.

For the U.S., the attractiveness of Indonesia is defined by its moderateness as the world's most-populous Muslim-majority nation, its credentials as a rapidly evolving democracy and as an increasingly-proactive state on the anti-terror front lines, and also by Jakarta's potential to play an environmental superpower because of its new sense of urgency to address climate change issues. Indonesia is a member of both G20 and the APEC forum, besides being a founder-member of the East Asia Summit, which is to admit the U.S. in 2011.

All these aspects of the newly vibrant bonhomie between Obama's U.S. and Indonesia were either subsumed in or submerged by the sheer symbolism of his visit to Jakarta on November 9 and 10. Having spent a few years in Indonesia as a child, Obama now returned to Jakarta with the kind of fanfare usually reserved for a prodigal son.

Revelling in that role, he struck a rapport with his Indonesian audiences in a personalised way that shone no light on the U.S. grand strategy in East Asia Obama's Ostpolitik!