US-China ties: Trustworthy friend is final goal

After the call between Chinese Vice-Premier Wang Qishan, special representative for President Hu Jintao, and US Treasury Secretary Timothy Geithner, special representative for President Obama, on Oct 15, 2010, American treasury authorities delayed the announcement of the latest edition of the currency report, to after the G20 summit in November.

Geithner confirmed in a statement released by the US Treasury Department that the RMB exchange rate has risen 3 percent against the US dollars since June 19, when the renminbi exchange rate mechanism reform was launched.

Is a currency war between China and the US inevitable? The answer is no. America's change in attitude toward China on the RMB issue has drawn attention from scholars and the media. Some experts studying the Sino-US relationship believe that reasons for that change are very subtle. In the background of high unemployment and economic slowdown in the US, for some politicians, the yuan exchange rate has become a hot topic and valuable tool in the coming mid-term elections in November. Obviously, the Obama administration noticed that beforehand and sensibly postponed the release of the currency report criticizing China on its undervalued currency, to a more proper time in order to avoid escalating tensions in America-China relations after US-South Korea military exercises in the Yellow Sea and disputes in the South China Sea.

However, some American conservative powers cannot accept their powerlessness over China's currency, a key problem to trade deficit in bilateral economic and trade ties whose consequence may lead to loss of supporters for President Obama and the Democrats in the midterm elections.

The cold treatment adopted by the US government means that seeking multilateral settlement measures instead of setting fire to conflicts is the right and sustainable track for a peaceful relationship for America and China. It's just a beginning. In the new era of international community, reciprocal respect amounts to a fundamental factor in mutual trust in nations' ties. As the first term of China's Principles of Peaceful Coexistence focuses on respect among countries, Washington has observed that the US should not go back to the old ways of the former administration, maintaining a tough relationship with Beijing.

Hence, "To protect the world's economic recovery and peaceful coexistence, the US must reciprocate China's peaceful coexistence strategy," according to advice by John Milligan-Whyte and Dai Min in their article titled "New strategy needed for co-existence" in China Daily on Oct 14, 2010. John Milligan-Whyte is chairman and Dai Min is president of the Center for America-China Partnership, an American think tank studying international ties and creating a "New School of America-China relations".

Inside the US, there are also different voices. The State Department and Congress usually hold opposite views according to their own agendas. In addition, Republicans on Capitol Hill often criticize the ruling party with a soft stance toward China.

It is not hard to imagine that if searching for external causes for the slowdown in the US economy, American government may be forced into disputes and conflicts with China. The real issues behind the US economy lie in the debt crisis and the troubled banking system.

China may become a trustworthy friend to the United States, especially in buying US Treasury bonds, amounting to $868.4 billion, when the largest developed nation was facing economic difficulties in the international financial crisis, and solving global issues jointly such as trade protectionism, climate change, anti-terrorism, and security cooperation in the Asia-Pacific region. The biggest "cake" for them is economic and trade achievements, which are bound to grow in the future along with globalization.

Pragmatic interests can gradually melt the diplomatic "iceberg". And peaceful coexistence is only possible by both sides willing to become a trustworthy friend. The clash of national interests is of concern to both parties, so both sides must be responsible stakeholders for each other and exchange ideas effectively via the US-China Strategic and Economic Dialogue for the purpose of achieving a win-win format and finally becoming a true trustworthy friend.

The author is a Beijing-based freelancer in China. He can be reached at larryhuangshuo@gmail.com.