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

“What we’re seeing here is for the first time really in the history of US-China relations, truly global issues are moving to the centre of the US-China relationship,” said Kenneth Lieberthal, who was a top Asia adviser to former President Bill Clinton.

For all the talk of a growing US.-China partnership, in many ways the two remain rivals. Both US conservatives and the Pentagon express concern about a decade of double-digit annual growth in the budget of China’s secretive military.

“We don’t deny the legitimacy, that they’re entitled to modernize their military,” said the US official. “But given the size of China and its position, its neighbours, we are entitled to ask, ‘Why are you doing the things that you’re doing?’”

The top concern on both the left and the right in the United States, however, is Beijing’s growing economic clout.

Highlighting US ambivalence about China, a Thomson Reuters/Ipsos poll showed that while Americans view China as important, many are wary.

Thirty-four per cent of Americans chose China as the “most important bilateral relationship” in a poll of 1,077 adults across the United States. Next were Britain, selected by 23 per cent, and Canada, the choice of 18 per cent.

When asked to characterise China, 56 per cent saw it as an adversary while only 33 viewed it as an ally.

In some sectors, trade issues are going to “pit the US against China” and Obama will need to assert US interests without inviting a “nasty confrontation with China,” said Prestowitz of the Economic Strategy Institute.

The Obama administration says it will not shrink from standing up for US economic interests.

For proof, it says, look no further than its decision in September to slap a 35 per cent duty on Chinese-made tires.

Since Obama took office in January, the administration has twice declined to label China a “currency manipulator”— a designation that could trigger negotiations leading to possible trade sanctions.

But Treasury has made clear it thinks China’s currency, the renminbi, is undervalued and the topic is expected to come up when Obama meets Hu.

US manufacturers say Beijing’s policy of managing its currency puts them at a big disadvantage because the cheaper renminbi lowers the price of Chinese goods abroad.

Last year, imports from China totalled more than $330 billion, making it by far the biggest contributor to the US current account deficit.

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