Thoughts on US-China Relations Amidst leadership Change & Continuity

ImageNOTES ON THE NEWS: It is surely good news for Australia that Barack Obama has been re-elected as US President.  It is even better news that in just a few days’ time he will be attending the East Asian Summit in Phnom Penh, as well as taking the bold step of visiting Myanmar.

By this action, at a time when he has very pressing problems at home, the president is showing that the United States is committed to the Asian region. It is unlikely that Mitt Romney would have taken such a step, given his commitment to ruffle Chinese feathers by branding China as a currency manipulator. (Had he been elected, he would not, of course, have been inaugurated until January.)

It is appropriate that the United States should connect with South East Asia, but it is of course important that the president makes it clear that by taking this step, he is not seeking to contain China.

Beijing fears this to be the case – though it is relieved that Obama will be remaining in the White House – and its misgivings will not be assuaged by the Perth meeting this Tuesday between US Secretary of State Hillary Clinton and Defence Secretary Leon Panetta and Australian counterparts, Senator Bob Carr and Minister Stephen Smith.

If these talks are to mean anything at all, Smith will need to come clean about what his officials have or have not said about the possibility of Cocos Islands being leased to the United States as a base for drones, as well as the prospects of US warships using West Australian ports.

Smith also owes it to the Australian people to be more forthcoming than he has been so far about the widely leaked but never debated contents of the upcoming Defence white paper.

For Bob Carr, the need now is to use his diplomatic skills to assure the Chinese that Australia has no desire whatever to curb the genuine Chinese desire to protect its trade routes, or indeed to contain China, but reserves the right to be part of the American alliance and to stand alongside the countries of South East Asia.

The other big current event is the transition of power in Beijing from Hu Jintao to Xi Jinping.  So far the most memorable speech has been the message from Hu, where, like an ageing prelate handing over to a younger man, the president has warned his successor to follow his example.

No big change, no reforms, stick to the script. Root out corruption, and control the commanding heights of the economy.  And he said this: “We must not take the old path that is closed, nor must we take the evil road of changing flags and banners”.

Hu was particularly strong on corruption, signaling we should expect a significant crackdown.

It is vital for Australian interests that the new administration in China and a revitalised and re-programmed Obama focus in a single-minded way in building a working partnership between the two countries.

If China and the US can find a modus operandi, much else will fall into place. Europe will be forced to get its act together, Russia’s Putin will be less able to make waves, and a UN Security Council where China and the US can work together should be able to restore some kind of order to the Middle East.

For further discussion on US-China relations amid the Chinese leadership shift – including discussion on this week’s Australia-US meetings in Perth – watch Colin’s interview with Roger Baker here: http://www.stratfor.com/video/us-chinese-relations-after-leadership-transitions-agenda.

Colin Chapman is the President of the AIIA (NSW).

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