by John M. Curtis
(310) 204-8700

Copyright Nov.15, 2009
All Rights Reserved.

          When the late President Richard M. Nixon and his Secretary of State Henry A. Kissinger opened diplomatic relations with the Peoples Republic of China in 1972, few imagined that Mao Zedong’s brutal communist regime would become the world’s third ranking economic power.  Visiting China on his Pacific Rim swing, President Barack Obama finds himself handcuffed to push the U.S. agenda.  Lecturing China on human rights, global warming, floating its currency or standing up to North Korea all seem futile now the U.S. finds itself hopelessly dependent on China to outsource manufacturing.  Arriving in Shanghai, Barack found himself struck by China’s towering skyscrapers and glitzy neon signs, now rivaling Hong Kong, Tokyo, New York, and more recently Dubai.  Barack knows that China became the last frontier for slave labor markets, rescuing profit-starved U.S. corporations.

            Nixon and Kissinger could hardly imagine the day when the U.S. wasn’t consumed with Taiwan Relation s Act, warning China not to mess with its non-communist ally.  Chinese officials welcomed Obama’s trip but want the ideological rhetoric toned down.  Since the 1989 Tiananmen Square massacre where pro-Democracy protestors were crushed by Red Chinese tanks, U.S. presidents pressed China on human rights.  Obama faces criticism for not pushing human rights, where the U.S. finds itself in a global recession, forcing the Federal Reserve Board’s low interest rates and massive government spending.  China, the largest foreign holder of U.S. treasury bills, wants the U.S. to raise interest rates and reduce its massive debt.  Possessing a large trade imbalance, the U.S. has had little influence on China to float its currency to make U.S. exports more attractive.

            Keeping the Yuan artificially low, China has made its goods attractive to U.S. and European buyers.  China wants the U.S. to raise interest rates and reduce budget deficits, something made almost impossible by a stubborn recession.  With no end in sight, it’s doubtful the U.S. recession—and budget woes—will end anytime soon.  When you add to that the prospects of more military debt from escalating the Afghan War, it’s doubtful the U.S. will reduce spending anytime soon.  China isn’t happy about the Fed’s cheap dollar policy, where artificially low interest rates have devalued the PRC’s holdings in U.S. treasuries.  “The United States does not seek to contain China,” Obama said in a Tokyo speech.  “On the contrary, the rise of a strong, prosperous China can be a source of strength for the community of nation,” signaling the U.S. has no intent of lecturing China on human rights.

            On the U.N. Security Council, the U.S. wants to count on China to contain North Korea and Iran, where a recent proposal to ship fissile material for reprocessing appears in doubt.  Obama walks a tightrope answering predigested questions from Chinese students at a kind of town-hall meeting.  Chinese authorities keep tight controls over pro-Democracy groups, especially university students infatuated with Western-style freedoms.  With China’s economic cooperation vital to the U.S. economy, Barack walks a fine line pushing China on global warming, human rights, Tibet or any other controversial topic.  Barack’s meeting in June with the exiled Dalai Lama antagonized Chinese officials, unwilling to discuss the independence of the mountainous Chinese province.  Obama’s visit attempts to mend fences, not highlight ideological differences with Beijing.

            U.S. officials want China to continue buying T-bills, to offset the need to print more money.  Beijing has already expressed doubts about current U.S. Fed policies that artificially suppress interest rates and print too much money.  Obama wants to push China on global warming but knows that feeding its citizens takes precedence over greenhouse gasses.  Pressing China on human rights abuses also backfires by fostering an adversarial relationship on the Security Council.  China’s past cooperation has helped contain North Korea’s Kim Jong-Il when it comes to nuclear proliferation.  China has helped lead five-nation talks to win concessions with North Korea.  U.S. manufacturers want Obama make conditions more hospitable for bilateral trade relations.  Trying to correct the current trade imbalance by imposing tariffs would only create a destructive trade war.

         Visiting China with his hands tied, Barack must bite his tongue to avoid pressing global warming, trade imbalances, Tibet and human rights.  China’s economic strength has increased its clout on the world stage, where most Western powers wish to exploit cheap labor for economic gain.  China’s cooperation on the Security Council is essential for managing dicey situations in North Korea and Iran.  Managing 1.3 billion people, the Chinese government has its plate full.  Pressure on global warming or human rights tends to backfire, forcing the Chinese government into more secrecy and insulation from the Western world.  Prosperous foreign trade has helped make Shanghai one of the world’s key economic power centers.  With economic weakness persisting in the U.S., Barack played it right trying to enlist China’s cooperation.  More criticism and pressure about extraneous issues only backfire.

John M. Curtis writes politically neutral commentary analyzing spin in national and global news.  He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.