The US-China relationship has traversed a long tortuous path over the past six decades. The complexity of this bilateral relationship has increased manifold in recent years mainly because of China's rise as a pre-eminent economic power. There is no denying the fact that today the world confronts monumental challenges which cannot be resolved by unilateral action and the major powers should join hands to face up to these problems. Against this backdrop, the Obama-Hu summit held in Beijing some time back was significant because the two leaders talked over multifarious global problems and put a premium on the need to build partnership.
During his visit, Obama played up the significance of forging a "positive, cooperative and comprehensive" relationship with China that would shape 'history' in the 21st century. He tactfully avoided direct criticism of the Chinese government mainly emphasising that the incumbent administration needs to relax restrictions on access to the Internet. He also resisted his predecessors' temptation to prod the Chinese authorities to enforce democracy and human rights. The joint statement released by both leaders revealed that they have agreed to undertake concerted efforts in respect of a number of issues like tackling climate change, countering terrorism, curbing nuclear proliferation and addressing other transnational problem including piracy and outbreak of pandemic diseases. Obama's strategy towards China is dubbed as a policy of 'strategic reassurance' that implies a bargain designed to mollify Chinese fears of containment, while China must work to assuage concerns of the international community by shouldering its international responsibility. The strategy identifies two ways of achieving the desired goals i.e. by focusing on areas of common interest and addressing matters creating mutual mistrust. However, analysts have contended that the strategy is likely to fail as the divergent strategic and trade interest will scuttle the prospects of a bilateral relationship. The financial crisis of 2008 has hit hard the US economy and dollar is losing its value vis-à-vis other currencies. China has amassed $2.2 trillion reserves of foreign exchange with two-thirds of them invested in dollar-denominated assets and also holds the US treasury bonds worth $1.5 trillion. The US is of the view that such a large-scale economic crisis cannot be tackled by individual countries and thus China's help is needed to set off on a path to economic recovery. Besides, China is also dependent on the US market for the supply of its goods. And also because of its huge dollar reserves China does not want to see the collapse of sinking greenback. But the difficulty lies with US trade deficit that stems from Chinese economic policies. Moreover, the two countries may slip into conflict over energy resource in Central Asia in the near future. China's growing engagement with Central Asia has been motivated by a number of strategic interests. China led the creation of the Shanghai Cooperation Organisation (SCO), which began as the Shanghai Five in 1996. Under the aegis of the SCO, China has also expanded its military presence in Central Asia, establishing an anti-terror centre in Tashkent and engaging in its first joint military exercises with a foreign army in Kyrgyzstan in 2002, which is resented by the US. It needs to be realised that lack of mutual trust and confidence is inherent in the concept of 'strategic reassurance'. Obama is determined to reset relations with China not out of altruistic purposes but out of constraints of the emerging contours of changing the geo-political environment. The severe financial crisis has paralysed the US's capacity to assert its strategic clout. China has taken the role of the largest foreign lender to the US and this fact has drastically altered the balance of relationship between the two great powers. Under such circumstances, the US should not expect much in reciprocity from China because the latter will not voluntarily smooth the way towards US economic recovery and shelve its strategic goals. China has rightly not expressed its willingness to team up with other powers to contain Iran's nuclear ambitions because it understands the importance of Iran's oil resources for its own phenomenal economic growth. In view of the above-mentioned causes of friction, there is little likelihood of close and cooperative US-China relationship; however, a sustained Strategic and Economic Dialogue (S&ED) may avert a major confrontation-like scenario.
During his visit, Obama played up the significance of forging a "positive, cooperative and comprehensive" relationship with China that would shape 'history' in the 21st century. He tactfully avoided direct criticism of the Chinese government mainly emphasising that the incumbent administration needs to relax restrictions on access to the Internet. He also resisted his predecessors' temptation to prod the Chinese authorities to enforce democracy and human rights. The joint statement released by both leaders revealed that they have agreed to undertake concerted efforts in respect of a number of issues like tackling climate change, countering terrorism, curbing nuclear proliferation and addressing other transnational problem including piracy and outbreak of pandemic diseases. Obama's strategy towards China is dubbed as a policy of 'strategic reassurance' that implies a bargain designed to mollify Chinese fears of containment, while China must work to assuage concerns of the international community by shouldering its international responsibility. The strategy identifies two ways of achieving the desired goals i.e. by focusing on areas of common interest and addressing matters creating mutual mistrust. However, analysts have contended that the strategy is likely to fail as the divergent strategic and trade interest will scuttle the prospects of a bilateral relationship. The financial crisis of 2008 has hit hard the US economy and dollar is losing its value vis-à-vis other currencies. China has amassed $2.2 trillion reserves of foreign exchange with two-thirds of them invested in dollar-denominated assets and also holds the US treasury bonds worth $1.5 trillion. The US is of the view that such a large-scale economic crisis cannot be tackled by individual countries and thus China's help is needed to set off on a path to economic recovery. Besides, China is also dependent on the US market for the supply of its goods. And also because of its huge dollar reserves China does not want to see the collapse of sinking greenback. But the difficulty lies with US trade deficit that stems from Chinese economic policies. Moreover, the two countries may slip into conflict over energy resource in Central Asia in the near future. China's growing engagement with Central Asia has been motivated by a number of strategic interests. China led the creation of the Shanghai Cooperation Organisation (SCO), which began as the Shanghai Five in 1996. Under the aegis of the SCO, China has also expanded its military presence in Central Asia, establishing an anti-terror centre in Tashkent and engaging in its first joint military exercises with a foreign army in Kyrgyzstan in 2002, which is resented by the US. It needs to be realised that lack of mutual trust and confidence is inherent in the concept of 'strategic reassurance'. Obama is determined to reset relations with China not out of altruistic purposes but out of constraints of the emerging contours of changing the geo-political environment. The severe financial crisis has paralysed the US's capacity to assert its strategic clout. China has taken the role of the largest foreign lender to the US and this fact has drastically altered the balance of relationship between the two great powers. Under such circumstances, the US should not expect much in reciprocity from China because the latter will not voluntarily smooth the way towards US economic recovery and shelve its strategic goals. China has rightly not expressed its willingness to team up with other powers to contain Iran's nuclear ambitions because it understands the importance of Iran's oil resources for its own phenomenal economic growth. In view of the above-mentioned causes of friction, there is little likelihood of close and cooperative US-China relationship; however, a sustained Strategic and Economic Dialogue (S&ED) may avert a major confrontation-like scenario.
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