The militant group, the Turkish Islamic Party has claimed responsibility for the recent attacks in China’s Xinjiang region. In a video statement on Tuesday, the group’s leader Sheikh Abdul Shakoor Damla blamed the Chinese government of damaging the identity of Muslims. He also warned the government of more attacks against “Chinese occupation.”

Liu Weimin, a spokesman for China’s foreign ministry, said on Thursday that China believes “that at present there are some East Turkestan forces, including terrorists, who aim to split China, and who continue to stir up sentiments of ethnic confrontation.”

Nearly 30 people were killed in a series of attacks in the cities of Kashgar and Hotan in Xinjiang carried out in July.

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A report released on Wednesday by the Pentagon warns about China’s military buildup in the Pacific. The report gave details about China’s military warfare spending, estimating it to be at nearly $160 billion for 2010. Pentagon’s deputy assistant secretary of defense for East Asia, Michael Schiffer termed the build up as “potentially destabilizing” for the region, especially Taiwan, which China considers as part of its territory. Schiffer acknowledged the fears were not based on any particular development, but were due to China’s lack of transparency about it military developments.

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On the final stop of his four day China visit, Vice President Biden addressed university students to assure them of the United States handling of its current debt problem blaming a faction of the Republican Party for slow progress. Biden assured audiences of the safety of China’s $1.17 trillion and stressed that despite its financial problems, the United States still remained the best place to invest. Biden’s assignment was originally for U.S. officials to get to know China’s incoming leader, Vice President Xi Jinping, who will make a reciprocal visit to Washington, however the trip became overshadowed by America’s current economic problems.

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There are reports claiming that two Chinese war planes intercepted an American U-2 spy aircraft recently over the Taiwan Straits. Speaking of the incident, US Joint Chiefs of Staff Chairman Adm. Mike Mullen on Monday said, “We both have to be very careful about how we fly them. We have to be careful about the intercepts.” Though the comments definitely sound prudent, it suggested US doesn’t seem willing to abandon such maneuvers. Mullen reiterated at the same time that Washington “won’t be deterred from flying in international airspace” on Chinese doorstep, despite Beijing’s opposition. The situation appears similar to how the drone attacks have continued in FATA despite Pakistan’s public criticism.

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Context

President Hu Jinato’s visit to the US is significant as it relates to the shifting global balance of power in South Asia, the Middle East, as well as the Pacific realm. The visit is taking place shortly after US Congress ratified the New START treaty with Russia. On the other hand, US-China relations have remained stressed throughout last year, especially military to military affairs. The agenda for the summit includes global trade imbalances, currency valuation, Iran’s nuclear program, global climate change, clean energy and North Korea. This article examines the status of US-China relations and its impact on the global balance of power.

Analysis

US-China relations can be considered along two main overlapping dimensions: the economic and defense. Although both of these areas have remained stressed, military to military affairs have been especially alarming. These relations apparently became more tense after US announced supplying $6.4 worth of military aid to Taiwan in January 2010 and the visit of Dalai Lama to Washington.

US-China Defense Relations and the Pacific Realm

The US Commander for Pacific region (PACOM) Admiral Robert Willard had stated in August 2010 that increasing Chinese assertiveness in South China Sea is a cause for concern and the country would take steps to counter. He added:

“Our purpose there is to maintain security, when you consider the sea lines of communication that criss-cross this very strategic and important region of the ocean, they carry the majority of commerce for this part of the world,” he said, saying the U.S. Navy would work with “our partners in the region”.

His statements and other events in the Pacific have taken place after Chinese declaration of a policy that asserts ownership of South China Sea and that it represents its Core Interest. The following four incidents involve three countries that are increasingly part of US axis in the Asia-Pacific region and include India, Japan and South Korea:

• The most recent incident involved North Korean firing artillery shells that landed in and around South Korean Yeonpyeong Island in late November 2010.
• A collision on September 7, 2010 between a Chinese fishing vessel and two Japanese coast guard boats in the disputed Senkaku islands, located in the East China Sea. The uninhabited islands are administered by Japan but claimed by China. Subsequently, Japan captured the Chinese vessel and now plans to prosecute the captain. The event has caused China to suspend high-level government ties with Japan.
• In August 2010, China denied visa to an Indian general whose command includes the region of Jammu and Kashmir. According to media reports, since the incident, the defense relations between the two countries stand suspended. The occurrence is also associated with reported presence of Chinese troops in Gilgit-Baltistan part of Pakistan.
• The tension between North and South Korea has remained high asSeoul points the finger at Pyongyang for the sinking of the warship Cheonan on March 26, 2010. The US is backing Seoul, while Pyongyang is blaming the US. The event was followed by naval exercises by both China and US that have raised the tensions considerably in the region.

Before suspending military to military dialogue, China had laid down three conditions to improve relations between US and China:

• Cease weapons sales to Taiwan.
• Stop its naval and air-based surveillance activities off China’s coast.
• Eliminate laws that prevent U.S. interaction with China’s military.

There are no indications that these terms were met. The recent visit of Defense Secretary Robert Gates to China has restored some level of normalcy to US-China military relations. However, the Chinese seem to have shifted the onus of improving and stabilizing military relations to the US. On the other hand, United States wants to engage China in a comprehensive dialogue and for it to display more transparency regarding its strategic intent and thus avoid potential mishaps, the possibility of which exists in the tense Korean Peninsula.

US-China Economic Ties

The scope of US-China economic relations include currency valuation, protectionism, technology transfer requirements and intellectual property rights.

With the US’s economy continuing to run slow, China’s currency policy has been a consistent bedeviling the relations of these two countries. On September 30, 2010 the US house of Representative voted to increase tariffs on goods imported from China. The vote passed in the house 348 to 79, but the bill, aimed at punishing the Chinese policy of keeping the yuan undervalued, has an uncertain future in the Senate and ultimately in president Obama’s hands. Meanwhile, China has suspended the export of Rare Earth Elements (REE) to Japan.

The US feels that imposing tariffs may give them greater leverage to pressure the Chinese into changing their currency policy while at the same time making Chinese goods less attractive in the US, and creating more manufacturing jobs at home. However there is also the issue of China’s being one of the US’s biggest foreign creditors, so pushing them too far is also not an option. The EU and American officials contend that their recovery from the recession would be considerably slow without economic and monetary cooperation of China.

The Chinese are showing no signs of bowing to the pressure, especially since the US is taking monetary easing policies of their own to try and devalue the US dollar; Beijing is rather skeptical at the ‘do as we say, not as we do’ rhetoric coming out of Washington.

The travel itinerary of the leaders of both countries also reveals the dynamics of US-China relations and the future strategy of each country.

President Obama’s Asia Trip

In November 2010 US President Barack Obama conducted a 10 day tour of Asia, stopping first in India, then Indonesia and finally in South Korea and Japan. The trip occurred soon after third round of US-Pakistan Strategic Dialogue were held in Washington. While the US did not come out and said as much, the Asia tour, which excluded Asia’s superpower China and did not even consider the US’s partner in the region Pakistan, was widely interpreted to symbolize Cold War style containment policies, by highlighting a ring of countries around China which are friendly to the US and not all crash-hot with China.

Balance of Power in the Islamic World

Protracted conflicts in Iraq and Afghanistan have created an alarming levels of negative perceptions for the US and NATO. This plays out to the benefit of Chinese. As has been pointed out by PoliTact previously, the core of Muslim world appears to be on a trajectory away from NATO and US, and becoming increasingly Chinese centric. Furthermore, the recent events in the Middle East related to Flotilla incident, have decisively shifted the balance of power there from Saudi block and in favor of Turkey. These changes would have dramatic implications for the politics of the Islamic world.

As a result of these political drifts in Middle East, US has heightened its diplomacy with the Muslim countries of the Asia Pacific, such as Indonesia and Malaysia, with growing reliance on Turkey for resolution of the Israeli-Palestinian conflict and in dealing with Iran. These changes would result in a decrease of influence for Saudi supported religious groups and create new tensions in the AfPak region. PoliTact has also noted that gradual alignment of Pakistan with Iran and Turkey has already strained its relations with Saudi Arabia.

NATO’s Lisbon Meeting, Afghanistan and Resurging Russia

The NATO Lisbon meeting, held on 20th November was only the third such strategic meeting since the end of the cold war for the North Atlantic Treaty Organization. This meeting was aimed at setting the strategic direction for the NATO Alliance for the next ten years. One of the core areas of focus for the meeting was transition in Afghanistan, and managing the Alliance’s presence there in the coming years. The Russian reset was also high on the agenda at the Lisbon summit. For the US, managing the reset with Russia is crucial for success in Afghanistan, dealing with Iran, and keeping European allies united.

While the danger from extremists is still real, economic realities are forcing European members to search for more than just military means to tackle the Afghan challenge. The threat from resurgent Russia alone has proven insufficient to shape the threat perception of many European countries. However, it is China that has the potential for becoming the real motivating force for the Alliance. The mounting prominence of India in NATO’s realignment, further justifies this estimate.

India’s increasingly aggressive military spending is worrying for both China and Pakistan, who each have border disputes with India. The Kashmir issue, which has been inflamed of late, will likely be on the minds of most Pakistanis who hear of the arms deal-the US is supporting Pakistan’s adversary in its long, on-going struggle over Kashmir. PoliTact has noted previously that if the military to military, or political and economic relations, between US and China deteriorate, it would likely impact US-Pakistan relations negatively as well.

Pakistan is a strong ally of China and key partner of US, whose role is pivotal to the resolution of Afghan conflict. However, the public perception of US in Pakistan has dipped to such an extent that it has become difficult for the government to carryout any policies that appear to be connected to American interests. In this context, Vice President Joe Biden’s just concluded catching-up visit to Pakistan was significant, particularly as it occurred soon after Prime Minister Wen Jiabao’s visited Islamabad (December, 2010) during which the two countries signed and agreed to about $30 billion worth of trade agreements.

The Future of US-China Relations

As a general rule, emerging powers tend to avoid confrontation until its unavoidable, while the established powers prefer to stop the emerging power before it becomes a full-blown adversary. In this context, Chinese behavior is perfectly comprehensible. Consider the following statement made by Chinese Minister of Defense Liang Guanglie after Chinese military tested of J-20 stealth fighter jet while Robert Gates was visiting.

“We cannot call ourselves an advanced military country,” Liang told reporters. “The gap between us and advanced countries is at least two to three decades.”

Policy experts and US think tanks have tended to interpret the Chinese slowness in implementing some of the steps that US requires, as weakness of Hu Jintao, the transitioning of political power underway in China, or increasing decentralization of institutional power in China. However, any emerging power would like to avoid and delay a confrontation with an established power until the time it has the capability to do so. Meanwhile, the leadership of both countries would hope to transform their relationship to be a cooperative one as oppose to a competitive or a confrontational one.

At the same time, US would want China to continue acting as responsible global power and extend its assistance towards resolving tensions in the Korean Peninsula and in dealing with Iran and extremism. As Chinese military capabilities advance, US would want China to tightly control the export of such weapons and technologies to other countries.

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Context

On September 30, the US house of Representative voted to increase tariffs on goods imported from China. The vote passed in the house 348 to 79, but the bill, aimed at punishing the Chinese policy of keeping the yuan undervalued, has an uncertain future in the Senate and ultimately in president Obama’s hands. Meanwhile, China has suspended the export of Rare Earth Elements (REE) to Japan. This article examines the escalating economic dimension of the international rivalries.

Analysis

Economics has dominated US-China relations in the last couple of weeks. With the US’s economy continuing to run slow, China’s currency policy have been a thorn in the works. The China-Japan dynamics has also impacted on US-China relations, as has the series of war games the US has undertaken with South Korea in recent weeks.

The US feels that imposing tariffs may give them greater leverage to pressure the Chinese into changing their currency policy while at the same time making Chinese goods less attractive in the US, and creating more manufacturing jobs at home. However there is also the issue of China’s being one of the US’s biggest foreign creditors, so pushing them too far is also not an option.

he EU and the US have used thet EU-Asia summit last week in Brussels and G7 and IMF/World Bank talks in New York to try and convince the Chinese to allow the yuan to appreciate naturally in the market. The upcoming November meeting of G20 in South Korean would cover further discussion on this topic. The EU and American officials contend that their recovery from the recession would be considerably slow without economic and monetary cooperation of China.

The Chinese are showing no signs of bowing to the pressure, especially since the US is taking monetary easing policies of their own to try and devalue the US dollar; Beijing is rather skeptical at the ‘do as we say, not as we do’ rhetoric coming out of Washington.

With their economic entanglement forcing a degree of politeness between the two rivals, geopolitical issues between China and Japan have nevertheless been putting additional pressure on the already fraught US-China interactions. A recent round of joint war games that US and South Korea held together in the Yellow Sea, has angered China. The defense ministers of US and China finally met today in Vietnam, at the ASEAN Defense Ministers meetings. The military relations of US and China have remained tense since US approved $6.7 billion of military aid for Taiwan, and President Obama met Dalai Lama, earlier this year. Side talks were also held between Japan and Chinese officials and there are signs that the military aspect of the tension may be easing but the economic dimension is escalating.

China produces 95% of the global supply of REE, and it and has suspended the supply of it to Japan since the collision between a Chinese fishing vessel and two Japanese coast guard boats near the disputed Senkaku islands, located in the East China Sea.

REE’s are used in petroleum refining, computer laptops and other electronic gadgets, production of green energy, and defense equipment. Other suppliers of REE include Australia, India, Russia and Malaysia; however, they would be unable to meet the demand in the short term, and thus increasing the monopoly of China in this regard.

China seems to be applying an economic leverage against Japan similar to how Russia has used its energy advantage over Europe. Pakistan also recently applied a comparable tactic when it temporary closed one of the supply routes for NATO forces in Afghanistan. In evaluating the future of Iran-Pakistan Gas Pipeline Project, PoliTact presented the following three factors, which remain valid to understand the politics around the leverage game:

1. Which countries have the gas and energy reserves?
2. Which countries have the most need for these energy reserves, for future development and ambitions?
3. The intermediate countries whose strategic location relative to these energy reserves increases their leverage vis-a-vis the global and regional powers.

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