Analysis: Obama's Pacific aspirations strain ties with China

HONOLULU Mon Nov 14, 2011 6:47pm EST

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HONOLULU (Reuters) - President Barack Obama's campaign to reassert the United States as a Pacific power, only days old, has triggered a sharp reaction from China, presaging tough times ahead as the two economic giants vie for influence.

Obama, beginning a nine-day Pacific trip, wielded rhetoric and promoted policies that seemed destined to generate friction and promoted policies that seemed destined to generate friction with Beijing and test the limits of the two countries' on-again, off-again cooperation.

The growing rivalry between the United States, the Pacific's traditional military power, and China, its economic engine, could also complicate a delicate balancing act played by Asia's smaller nations.

While insisting he wanted stable ties with China, Obama in quick succession demanded it "play by the rules" of international trade, said its export-driven powerhouse "throws the whole world economy out of balance," and insisted it act like a "grown up," rather than posturing as a developing nation.

China reacted with uncharacteristic speed, dismissing demands that it float its currency freely and saying it would abide only by trade rules that it helped negotiate.

"First we have to know whose rules we are talking about," Pang Sen, a deputy director-general at China's Foreign Ministry, told a news conference not long after Obama spoke. "If the rules are made collectively through agreement and China is a part of it, then China will abide by them. If rules are decided by one or even several countries, China does not have the obligation to abide by that."

Chinese leaders were not happy, either, with Obama's pressing of a Pacific free trade area that is sponsored by the United States and does not, for now, include Beijing.

Japan, Canada and Mexico each said they were interested in joining the United States and eight other nations in negotiating the Transpacific Partnership (TPP), with a goal of completing the framework next year.

BALANCING ACT

Asia's small and mid-size nations have long seen themselves caught between China's economic behemoth and the security blanket provided by U.S. military forces spread from Hawaii to the Korean peninsula and beyond.

As China grows more aggressive in its territorial claims, some of those countries have edged closer to Washington for shelter.

This week, they seemed to cautiously welcome Obama's pledge to look more across the Pacific, after a decade of American foreign policy tied to the sands of Iraq and the mountains of the Hindu Kush.

China's Asian neighbors "gravitate to China as just about the only remaining hope for continuing economic growth, while looking quite anxiously to the U.S. for strategic assurance," Simon Tay, chairman of the Singapore Institute for International Affairs, wrote in a published commentary on the "Today on Sunday" news portal.

Singapore -- a multiethnic, majority Chinese island state in Southeast Asia -- epitomizes the Asian balancing act of keeping close ties to both Washington and Beijing.

Speaking to business executives on Friday, Singapore Prime Minister Lee Hsien Loong voiced support for the U.S. military in Asia, whose command headquarters are in Honolulu. "They help to keep the peace and we want them there," he said.

"I believe America understands what a big stake it has in Asia," Lee said. "But you are a hyper-power. You have interests all over the world -- in Europe, in the Middle East, in Afghanistan. Asia is an important part of the world but it is not the only part of the world so we have to share you with other preoccupations."

THORNY ISSUES AT BALI

Compounding the potential for friction is the fact that the Asia-Pacific Economic Cooperation summit here may turn out to be the easier of this month's two Asian summits. It focuses on economics, where countries agree on a lot of things, and eschews divisive political and security issues.

Those thorny issues will be taken up next weekend on another idyllic resort island -- Bali -- where Obama, Chinese President Hu Jintao, and largely the same cast of regional leaders will meet for the East Asian Summit.

"China's posture in the region is on everybody's mind, including the Southeast Asian nations and the United States -- and this balancing that the whole region is doing is a defining element of the Asia-Pacific region today," said Jamie Metzl, executive vice president of the New York-based Asia Society.

Looming in Bali is the issue of the South China Sea.

Beijing claims that entire maritime region, which contains rich energy and fisheries resources, pitting it against coastal states like Vietnam and the Philippines in a test of wills that saw violent clashes in recent years.

China's more assertive stance over the maritime dispute and a military expansion fueled by double-digit economic growth means that for U.S.-China ties, "the trajectory at least has become much more volatile," said Nick Consonery, China analyst at EurAsia Group in Washington.

Obama and U.S. Secretary of State Hillary Clinton will use the days between the Honolulu and Bali summits to visit formal American security allies in the region. Obama heads to Australia, where the two countries will unveil a beefed up alliance. Clinton travels to the Philippines and Thailand.

Metzl sees the economic and security policies as complimentary responses to China.

"Concern about the kind of role that China hopes to play is rising across the region and that's why you're seeing the countries joining with the United States on TPP and you're seeing the increased welcome of the U.S. military," he said.

(Additional reporting by Stella Dawson and Emily Kaiser; Writing by Warren Strobel; Editing by Will Dunham)

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Comments (2)
Janeallen wrote:
Which country’s economy is decent now?

Germany is the strongest economy in Europe.
The baggage of the failing Greek and Italian economies on Germany aside, they are projected to have a balanced budget within a couple of years. And their debt is not at the level of most other European countries, judging from the relative percentage to their GNP.
That’s despite having shelled out hundreds of billions to have save Greece and other failing EU countries and the euro.

How did Germany achieve that?
They have a significant surplus with China.
They will cars of excellent quality and don’t complain about China’s cheap products. In fact, they expose stories of dangerous products in China and substandard workers’ conditions in China, maybe more than anybody else. However, the reports are not hyped up, like many in the United States. The latter infuriated the Chinese people, our potential customers, while the former gave the impression that the exposures were truly objective, and done genuinely with the interest of the Chinese workers in mind.

Nor have the Germans sweet talked the Chinese.
The Germans complain about China’s human rights no less vigorously than any other country, but they don’t engage in ridiculous economic scapegoating of China in a way that insults intelligence
like the way Obama is doing.

Nov 14, 2011 10:45pm EST  --  Report as abuse
NEWSTIME2010 wrote:
Is Obama still 6 year old on his now second visit to Australia?
The whole lot sounds and looks like a war strategy.
When one think about it, China has never attacked another nation as far I understand. This ”wedding” or forced marriage between USA and AUS will not sit very good for the Australian Chinese relation, and certainly not good for America either.
Wrong obsolete diplomacy!!

Nov 16, 2011 8:10am EST  --  Report as abuse
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