China and the West: same bed, different dreams

By Alan Wheatley, China Economics Editor - Analysis

BEIJING (Reuters) - Did you know that the slide in the dollar and the surge in oil to over $100 a barrel were part of a deliberate U.S. strategy to reduce the purchasing power of China's foreign exchange reserves?

Few in the West probably noticed the comments by Li Lianzhong, made last month in a public forum, even though he is the head of the Communist Party Central Committee's economic think-tank.

After all, no one has a monopoly on conspiracy theories.

But Li's views illustrate that, despite China's integration into the global economy, a gulf in comprehension sometimes separates Beijing and the West. The world is not yet flat.

Indeed, mutual recriminations seem to be on the rise. What is China up to in Africa? What are the real motives of its sovereign wealth fund? Western critics want to know. Why is Washington blocking investments by our companies? Why are Western media distorting coverage of Tibet? ask Chinese skeptics.

The danger for markets is that such antagonism could erode the trust underpinning economic links, especially when slower growth is putting Western politicians on the defensive and August's Olympic Games are heightening Chinese sensitivities.

"Both sides will need to learn better how to deal with each other. There are plenty of examples on both sides of misunderstandings and inability to comprehend how the society works, which then leads to real problems when it comes to the investment process," Jonathan Woetzel, a senior partner in McKinsey's Shanghai office, said in an interview.

As Woetzel put it, ties with the West can still be summed up at times with the Chinese saying "same bed, different dreams".