U.S.-China Trade

 
Wednesday, July 9 brought an outreach session during July 7-9, facilitated by the Group of Eight (G8 ) Summit in Tokayo, Japan.  The outreach session was convened at the Windsor Hotel, where the G8 leaders (Britain, Canada, France, Germany, Italy, Japan, Russia, and US) invited leaders from key developing nations to weigh in on energy security and climate change.

As in invitee, China took the opportunity to submit a four-point proposal that would aim to strengthen the global economy.

1. Build a sustainable world economic system. Demonstrate a commitment to sustainable development by ramping up macro-economic policy activities and making concerted efforts to maintain the growth of the world economy.
2. Build an inclusive and orderly international financial system. Cooperate to ensure developing countries are given more opportunites with international financial institutions. The World Bank would help these countries adapt to economic globalization, The International Monetary Fund would strengthen monitoring and early-warning of the international financial market, specifically for short-term capital flows and risks of financial innovation.
3. Build a fair and equitable international trade regime. Countries should support jointly opposing trade protectionism, and supporting strengthening multilateral trade regimes.
4. Build a fair and effective global development system. Show of good faith in partnership by developed countries, by increasing assistance, opening markets, transferring more technologies, and relieving their debts. Developing countries to enhance capacity building.

Taking a step back, a more pressing issue for overall summit members is the question of what to do with the G5 - the five key developing nations - or, ”growing dynamos” - that represent nearly 3 billion people: China, India, Brazil, South Africa and Mexico. PRC’s President Hu stands by the importance of participation by G5 members, saying that the combined make-up of the countries represented by G8+G5 =  60 percent of the world’s total population = three-fourths of the world’s total economic power. 

Hu’s statement is delivered with poise,  equal parts a) nodding to key G8 leadership reluctant to acknowledge China’s power in a global forum; and b) compensating for its recently unfavorable reputation by rising to carve a path for its fellow G5ers. It is rumored that leading up to the summit, Japan was reluctant to pursue dialogue with the G5 “for fear of too openly acknowledging the power of China,” resulting in the dilution of the summit, through the shortening of its duration and extending invitation to other major non-G8 contries to neutralize discussions: Indonesia, South Korea, and Australia.  

One particular article on the G8 Tokayo 2008 blog discusses China’s role in the G8, and says that China has “hedged its options toward the G8, and emphasized meeting rather than joining, ” going on to discuss that although its priority reaches for international acceptance as a peaceful but key player with market-economy status, it must do so on its own terms . . . not as a sole nation joining the ranks of the other G8s, but with its G5 counterparts and ‘developing’ allies. As China continues to strategize its entry into more visible, large-scale forums, it must be sensitive to one pivotal consideration:

“. . . as China’s international profile grows, so does pressure on Beijing to demonstrate that it is willing to act not only as a force for world peace and stability, but also as a responsible international stakeholder.” 

The reason why Hu’s proposal is centered on qualifying successful coordination mechanisms that will best engage developing nations on emerging issues is become clear.

Other G5s seem to share the opinion that they aren’t getting enough time at the table with their G8 counterparts. Lourdes Aranda, Mexico’s deputy foreign minister and G5 coordinator believes that in addition to limited talk time, the 5 get are restricted to discussing platforms where “developed countries have basically set the agenda.” Representative of the enthused spirit of G5, she advocates its wider stance, as its vast impoverished populations could play a stabilizing role.  

However rudimentary, the benefts of this Heiligendamm process cannot be overlooked. This channel alone has supported the gaining of G5 countries’ talking ground by providing:

• a “confidence-building” measure for the esteem of G5s in the eyes of G8s, and a symbol of commitment to G5s from G8s
• a useful “supplement” to formal negotiations with G8 countries in multilateral bodies such as the United Nations or World Trade Organisation
• increased partnership and coordination among G5s and between G5s and other international bodies.

SecState Condi Rice’s visit to Beijing carried a number of items on Washington’s agenda. She and China’s Foreign Minister Yang Jiechi came to the table on a number of current events.

ZIM. With the recent swearing-in of Mugabe for his sixth term as President of Zimbabwe, Bush has called the UN to action against “Zimbabwe’s illegitimate government,” which has been globally criticized for using tactics of violence and intimidation. Bush plans to present an arms embargo and travel ban as response measures to recent events in Zim to the UN Security Council this week. To aid US efforts to put an end to political violence in Zim, it has been growing its outreach to other UN Security Council members for some teeth behind its words (Rice is documented telling reporters that the US is pushing for action and ”not just another statement” from the United Nations).

As it is a permanent member of the UN Security Council, having China’s vote (= veto-wielding abilities) is critical to securing and issuing UN-branded action against Mugabe and violence in Zim. Drawing-up the issue to partners and allies, the Washington is recruiting Beijing in particular to get Zim under its thumb. In a diplomatic and vague response to Washignton’s proposal, Yang Jiechi told reporters at a news conference that “China, as a responsible country, will also play a constructive role in this process,” but that “the most pressing path is to stabilize the situation in Zimbabwe.” He went on to say say that he hoped that the Zimbabwe government and its political opposition will “engage in a serious dialogue to find a proper solution,” adding that China supports the engagement of “African countries in particular” on this issue.

China of course has a long-standing trade partnership with Zimbabwe, and has been reprimanded internationally for its alleged arms supply to African nations, getting tangled earlier this year in the web of tragedy and condemnation surrounding Darfur genocide activities. Yang clarified that a Chinese ship with a “very limited amount of conventional arms” did not deliver the cargo earlier this year after receiving a request from Zimbabwe. With China stepping back from trade that would be perceived as supplying arms to African countries - and Zimbabwe in particular - but not committing to the US’ proposed course of action, it seems that a stalemate has been reached on this particular issue.  Unless of course, another topic or incident comes into play, allowing Washington to leverage this one forward. From this point forward, the US will have to prioritize, choose carefully the topics necessitating Beijing’s weight. In the meantime, both countries will continue to tally its haves and have-nots, dancing with a fluidity as dynamic and changing as its variable platforms and partnerships.

Coming to an informal quasi-agreement, Rice concluded her visit to Beijing on the issue of Zim saying “This is not an African issue alone … it is an issue for the Security Council. . . But I think we are all looking for something out of the African Union.”

NORTH KOREA. Status checks on the progress made on North Korea’s nuclear program were a bright spot during the trip. Both countries took a moment to bask in the afterglow of recent successes in North Korea where it delivered a long-due list of its nuclear activities, as required by a disarmament-for-aid deal reached in talks hosted by China. In addition, North Korea made a symbolic move to show its commitment to the nuclear deal, toppling the cooling tower at its plutonium-producing reactor. 

While China maintains its hosting duties for six-party talks on this issue, it is expected to announce a new round of talks (which include North and South Korea, the United States, Japan and Russia). Rice reported that chief envoys would coordinate leading up to the talks, the objective of which would be to “. . .  get some steps forward on verification” of North Korean efforts to dismantle its nuclear progrm and activities, she said of the negotiations.

CHINA’S QUAKE. Rice showed concern for affected Chinese people earlier Sunday when she visited the site of Sichuan’s quake last month. Numbers now show total 88,000 dead or missing, and a staggering five million displaced.

“I’ve been tremendously impressed with the recovery, with the resilience of the people,” Rice told journalists after touring the wrecked city of Dujiangyan, near the epicentre.  “It is really a sign of how the human spirit can recover from great devastation.”

On the topics of recent natural disasters in greater Asia, Rice said she would investigate ways to persuade China’s close neighbour and ally Myanmar to accept international aid to repair the nation, which suffered catastrophic damage from a cyclone in early May.

TIBET. Rice echoed the US’ concerns about China’s hardline activities in Tibet. This was rebuked by Beijing’s explanation that US views and media have created and exacerbated the problem. Moving forward on the Tibet piece, China announced Sunday that it would revisit fresh talks with the Dalai Lama’s reps. The US’ initiative to bring attention to this issue in face-to-face format is the motivation that China needed to follow-up on an outstanding promise to maintain discussions with the exiled Tibetan leadership, which has long waited to sit down with China’s political leadership.

“I hope there will be some positive developments and some momentum behind the [Tibet] talks,” Rice said, showing support for China’s action. ”This is the way to deal with the issue.”

When: June 17 and 18

Where: US Naval Academy - Annapolis, MD

Who: Co-Chairs US Treasury Secretary Henry M. Paulson, Jr. and Vice Premier Wang Qishan

Why: To strengthen and deepen the bilateral economic relationship through actions to:

• raise questions
• seek consensus
• implement results
• prevent trade protectionism and conservatism from hampering the trade cooperation

What: An overview of China and the US coming to the table to discuss the following areas:

1. Macroeconomic Cooperation and Financial Services.  The countries pledge to work together toward sustained growth, stability in price and financial systems, and agreed to continue a collaborative approach to sharing information on issues of mutual interest.
2. Investment in people and Product Quality and Food Safety. Agreed the need to open up communication regardingt mitigating economic risks associated with aging populations in both countries, and to use this as a platform for investigating ways to provide better healthcare and retirement services. Bilateral efforts to continue activities determined at SED III for product safety on an ongoing basis.
3. Cooperation on Energy and the Environment. Mutual understanding of the importance of cooperating to address challenges. Both countries expressed the desire to strengthen commitments to energy and the environment.
4. Trade and Competitiveness. Challenges of trade were discussed, as well as actions that would support each nation’s economy within the larger picture of globalization.
5. Investment. China and US came to an agreement on a series of actions that will be taken to create a mutually beneficial investment path for and between both.

In response to the May 12, 7.9-magnitude earthquake in Sichuan, Washington is stepping-up to help China in its aftermath. Most impressively, the US seems to be sharing lessons learned from domestic challenges in 2005 with Hurricane Katrina recovery efforts, and is pitching in with this act of good faith to show strength in partnership.

The Statistics:

Disaster Assistance:

• USAID provided $500M USD to the International Federation of Red Cross and Red Crescent Societies via the US Embassy in Beijing. The aid was for procurement and delivery of emergency relief commodities.
• American urban rescue workers from local fire brigardes (Los Angeles, CA and Fairfax County, VA) flew into China to perform “heavy rescues” to recover trapped and injured persons using state-of-the-art technology like diamond-tipped chain saws, generators, and oxygen-gasoline torches. In addition to manpower and expertise, equipment and training were provided in this effort.
• US aid also includes satellite images of resrvoirs, roads, and bridges sustaining damage as a result of the earthquake.
• Network for Good raised more than $215,000 for earthquake victims.
• The Bill & Melinda Gates Foundation has donated $1.3 M to the China Ministry of Health for safe water and disease control activities.

The challenge now is providing adequate coverage for China’s internally displaced persons. The earthquake displaced approximately 5.4 million people, according to Sichuan provincial authorities.

CHINA - A student sits in the shambles of his school classroom. Photo by Imaginechina/AP Images.

China vs. Myanmar 

Everywhere, comparisons between the circumstances surrounding the recent disasters and Myanmar and China are cropping up.  One Brookings Institute article suggests that government disaster response actions are, by nature,  politically-driven: “Presently the apparent openness of news reporting on the Chinese earthquake stands in contrast to the staged scenes of disaster relief in Burma.” As media coverage directly impacts the receipt of donations, this is just one of many reasons why China seems to be having a better time salvaging aid than Myanmar.

Adding onto China’s base of prolific media coverage the interest/investment of American companies and global attention with the coming Olympic games, China is eclisping Myanmar in the push for relief.

 
MYANMAR - A boy plays in front of his home, destroyed by Cyclone Nargis. Photo by REUTERS/Stringer.

To DONATE:

Committee of 100 China Earthquake Relief Fund

American Red Cross Donations

AmeriCares Aid