President Obama’s administration appears to be setting itself up for maintaining a fragmented China policy even within the confines of the cabinet. During his Senate confirmation hearing last month, now Treasury Secretary Geithner accused China of purposely under-valuing its currency so as to make its goods cheaper for Americans, thereby hurting American industry and increasing our trade deficit with China.
The comment, an echo of Obama’s remarks on the campaign trail, immediately set off a fierce flurry of diplomatic rebuttals from the Chinese and scattered backtracking from the Obama Administration. “Directing unsubstantiated criticism at China on the exchange-rate issue will only help U.S. protectionism and will not help towards a real solution to the issue,” said the Chinese Ministry of Commerce in response to Geithner’s comment. And White House Press Secretary Robert Gibbs later worked to soften Geithner’s and Obama’s previous rhetoric when he said, “I think it’s safe to say this administration will determine in the spring” whether China devalues its currency.
And when it comes to our deficit spending, China became the U.S.’s largest creditor during President George W. Bush’s administration. Given the additional trillions that will be spent by the Obama Administration and Congress, the U.S. will need to have another nation to finance that spending because we certainly cannot afford to do it ourselves. China will be that creditor. It is becoming more and more obvious that the economic fates of the U.S. and China are becoming increasingly more intertwined, and should the Obama Administration focus on appeasing the Chinese so as to keep the money coming, U.S.-China relations should continue to grow as they did under the recent Bush Administration.
But Secretary of State Hillary Clinton seems to see the huge focus on money as one of the major problems in the U.S.-China relationship. She argues that while the global economic slowdown clearly makes economic considerations important, the U.S. relationship with China should encompass more than that. “We need a comprehensive dialogue with China. The strategic dialogue that was begun in the [recent] Bush administration turned into an economic dialogue,” she said in late January.
Hillary Clinton appears to be eyeing a route to China similar to the one her husband Bill Clinton took as President 16 years ago. Bill Clinton initially sought to take a hard line with the Chinese by demanding they improve their human rights in exchange for granting them Most Favored Nation (MFN) trade status in 1993. China’s human rights problems, especially only four years after the Tiananmen Square protests and subsequent massacre, became the center of Bill Clinton’s China policy that was set to drive and shape all of the other aspects. But in 1994, the Clinton Administration did change its stance and granted China MFN status while stating that China would come to improve its human rights record.
However, it is unclear how much emphasis Hillary Clinton will put on human rights. Should this State Department choose to put its focus there, will it take the Bill Clinton route that threatens sanctions for non-compliance? Or will it follow George H.W. Bush’s Administration’s lead and hope that a gradual loosening of restrictions by the Chinese government will follow from more international trade and engagement with the world? Or will it carve its own new path to foreign relations with China?
Whatever path she chooses, Hillary Clinton is certainly indicating that it will be the State Department, not other parts of the Obama Administration, that will truly set the tone regarding China. Her first trip overseas as Secretary of State was to Asia, and China was the single non-democratic country on her list of stops. Moreover, it was probably no coincidence that it was her final stop and not her first, a diplomatic slight indicating a level of displeasure with the Chinese. Echoing her beliefs that U.S-China bilateral relations are a priority, the symbolism of the trip and her wide rhetoric truly call into question what that bilateral relationship will look like in the future.
In the realm of foreign relations, the issue of China is about as murky as they come. Americans tend to be simultaneously curious and cautious, so in their minds, China arouses optimism, curiosity, suspicion, fear, antipathy, and apathy. We have seen glimpses of this spectrum of opinions mirrored in the people who comprise Obama’s cabinet. We have seen the totality of this spectrum in the policies of past American presidents. But it is certain that this administration will control the shape the path between America and China, be it tame or rugged. And should it be rugged, it is absolutely crucial that it at least be passable so as to successfully lead us to China.