Obama plays China card, but who holds the ace in sino-America ties?

Not only does China depend on the US export market to fuel its highflying economic growth rates, the United States relies on China’s vast savings to help finance its burgeoning budget deficits.

“It is clearly unsustainable. This relationship helped give rise to global economic imbalances,” said Ben Simpfendorfer, an economist with Royal Bank of Scotland in Hong Kong. “If we are ever going to free ourselves of these imbalances, we need to reverse this relationship, get China to buy things in the US and the US to invest in China.”

When it comes to the big foreign policy issues of the day, the Obama White House and that of his predecessor George W Bush tend to live in opposite worlds. The rare exception is China.

Obama’s approach builds on aspects of the Bush administration’s stance toward China, which encouraged Beijing to be a responsible “stakeholder” in the global community.

But all indications are that the Obama White House intends to move the bilateral relationship to the next level, making it more of a partnership -- and that in turn is raising hackles among some traditional US allies, who often don’t see eye to eye with China and now worry they will be marginalised.

One of the clearest signals of the Obama administration’s desire to give China and other large, fast-growing economies more global clout was the decision -- adopted at the Pittsburgh Group of 20 summit in September — to make the G20 the premier forum for discussing global economic issues.

The shift reduces the role of the G7 and G8, groups dominated by rich Western countries that have long enjoyed elite status in global economic decision-making.

And that has led to some European anxiety that the G20 could give way to a G2 of the United States and China.

In Pittsburgh, European officials privately vented frustration at a US willingness to bend over backwards to give China a voice.

During one session on International Monetary Fund voting power, a European official became so angry at China’s position he had to leave the room to cool down.

At a luncheon, some Europeans were less astonished by China’s refusal to include climate change in the communique than by the United States’ willingness to go along.

Several delegates could barely eat their lunch, according to a former US official who was told of how the discussion played out.

But the Obama administration wants to reassure Beijing that the United States, for one, welcomes China’s new assertiveness on the world stage, even if the two countries don’t always agree.

Climate change is expected to be a major topic of Obama’s meetings with President Hu Jintao when he visits Beijing.

Ahead of the December 7 global climate talks in Copenhagen, the administration sees this issue as a key test of whether China will step up to the plate as a truly global player.