Analysis:Chinese swagger over U.S. distress could sour relations
BEIJING (Reuters) - America's debt troubles have triggered a burst of popular anger and swaggering self-confidence in China that, if unchecked, could complicate the broader U.S.-China relationship, making it harder for leaders to manage disputes from Tibet to Taiwan.
The bitter debate in Congress over spending and last week's downgrade of the U.S. sovereign credit rating unleashed a torrent of blunt and sometimes vitriolic commentary from China's state media, which criticized the world's biggest economy for its "debt addiction" and "short-sighted" political wrangling.
Such comments were hardly a surprise.
China has parked about two-thirds of its $3.2 trillion foreign reserves into U.S. government debt, making it uniquely vulnerable to any default, its ruling Communist Party likes to score publicity points from American failings.
Some commentators have suggested that China use its position as Washington's biggest creditor as leverage on non-financial issues. Combined with Chinese leaders' public silence on the downgrade, that could create a dangerous brew of uncertainty and inflated expectations about Beijing's intentions.
Last week, a popular tabloid linked to the Communist Party's mouthpiece argued that China should use its "financial weapon to slap Washington" over arms sales to Taiwan.
"We're reluctant to use the United States' debt bonds as a weapon, but Washington is forcing China to do this," Ding Gang, a senior reporter for the People's Daily, wrote in the Global Times.
Editorials in state media are not necessarily a direct reflection of official thinking.
But as public indignation over the debt crisis echoes across the Internet, there is the possibility that the swelling propaganda, and the expectations for a tough line that it can encourage, will crimp Beijing's room for maneuver in its relations with Washington, said Bonnie Glaser, an expert on U.S.-China relations at the Center for Strategic and International Studies in Washington, D.C.
"There are louder and louder voices that are saying China has many other important relationships and that the U.S. is increasingly weak, and therefore China can stand up for its own interests," she said.
SHOUTS AND HARANGUES
This isn't the first time China's leaders have confronted nationalist passions that can shape foreign policy.
Some analysts argue that anti-Japanese protests at home last year contributed to China's unyielding position in a dispute with its neighbor over the fate of a Chinese boat captain who had rammed a Japanese coast guard vessel.
And when China proved to be the only major economy that continued to grow strongly through the global financial crisis that began in 2008, the country's officials struggled against a common misperception that China could ignore the demands of Western powers and assert its national interests more boldly.
This time, anger over the debt crisis has combined with a growing conviction among China's elite that the United States is in decline and so the time has finally come for China to take its place on the world stage.
"The United States lacks great politicians," said Zhao Changhui, a well-known Chinese economist and country risk analyst. "Up until now, the United States has refused to acknowledge the fact that it is declining."
Such sentiments, along with the fury that is being vented by the public in blogs and online chatrooms, could limit Chinese policymakers' options.
"The government will have its own worries regardless of pressure from others," said Jin Canrong, an expert on the United States at Renmin University in Beijing. "But other people in society will shout and harangue, demanding answers, and that will increase domestic pressures on the government."
That in turn could influence China's stance on key issues, such as U.S. support for the Dalai Lama or weapons sales to Taiwan, said Glaser, the Washington-based expert.
"If the reaction (to arms sales to Taiwan) from netizens and hardliners, and particularly some of these PLA (People's Liberation Army) people who are so outspoken, is really excessive and the leadership is intimidated by it, then they may have to react more harshly than they originally planned to pacify people," she said.
"There could be this spiraling effect where the actual impact on Sino-U.S. relations could be far greater than even the leadership itself wants."
U.S. ELECTION FLASHPOINT
Glaser and other analysts said that Chinese President Hu Jintao made it clear after last year's tensions that he considers stable ties with the United States a priority, despite persistent tensions between them.
Those relations will be in the spotlight later this month, when Vice President Joseph Biden visits China.
"Now most sensible people believe that the United States has been weakened but will remain unsurpassable for at least 10 years or 20 years," said Yuan Peng, a researcher at the China Institutes of Contemporary International Relations, a government-run think tank in Beijing.
But China will also worry that U.S. public rancor could turn on Beijing as Washington prepares for a presidential election race, added Yuan.
"Imagine, if (U.S. politicians) fight so much about domestic issues, then China policy could also be seriously affected by domestic political pressures. That could harm relations, especially with the presidential election next year," he said.
"We've also reassessed our views of the U.S. political system. We used to admire its checks and balances. But now the shortcomings of that system are much more obvious."
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