Getting to know you - Barack Obama

PUBLISHED : Sunday, 12 February, 2012, 12:00am
UPDATED : Sunday, 12 February, 2012, 12:00am
 

US President Barack Obama is expected to receive a 'gift basket' of business deals when he receives Vice-President Xi Jinping at the White House on Tuesday.

But analysts say the American leader should not expect compromises on political or security issues that Beijing regards as vital to protecting its core national interests.

Obama has made clear that he is toughening up his policy on China in recent high-profile announcements.

In November, he and Secretary of State Hillary Rodham Clinton said the US would increasingly focus on Asia as a counterweight to China's growing assertiveness in the region. In his recent state-of-the-union address, Obama said he would step up pressure on China - which the US accuses of unfairly subsidising exports to the world's No 1 economy - to shore up US manufacturing and create jobs.

Obama also boasted in his speech that his government had brought trade cases against China 'at nearly twice the rate as the last administration', and vowed to create an Enforcement Task Force to investigate trade violations by China.

While Obama has a long list of goals for Xi's visit, some analysts say his top priority is to get Chinese help in solving America's economic woes - sluggish economic growth and a high unemployment rate - which are casting a huge shadow over his re-election campaign.

'As Obama cannot expect to get many compromises from the Chinese on politically and diplomatically sensitive issues, he will focus more on economics, as doubling exports to create enough jobs for Americans tops his political agenda this election year,' says Professor Liu Kang, who teaches Chinese studies at Duke University in the United States.

Jin Canrong , an expert on Sino-US affairs and associate dean of Renmin University's School of International Studies, said Obama would raise issues regarding Iran, North Korea and Syria, along with peace in the South China Sea. 'But he should not expect Beijing to agree to the American demands,' Jin said.

Liu, who is also director of Duke's China Research Centre, said Obama's most pressing challenges this election year were economic recovery and job creation.

But there are fears, particularly in Beijing, that the United States is heading towards protectionism. Top trade-union officials in the US announced on Tuesday a long-planned campaign to press Obama to file a barrage of trade cases against China.

Apart from following the president's tough stance, the officials have been emboldened by support from allies in Congress and success in filing a case before the World Trade Organisation against China's curbs on some raw-material exports.

The push also comes amid American public anger over China's imposition of almost US$5 billion in annual tariffs on the imports of SUVs and large cars.

Obama, who has responded to rising protectionist sentiment at home by toughening his trade policy on China, sharply criticised Beijing in November at the Asia-Pacific Economic Co-operation (Apec) forum in Hawaii, saying China should act like a 'grown-up' economy. Hu Yifan, chief economist at Haitong International Research, says the hardening of Obama's stance may be regarded as 'political wrangling' by a president seeking to boost his chances of winning a second term in November.

'In our view, trade disputes might arise during this election year, but a serious trade war, especially between China and the US, is unlikely, given the deeply intertwined interests of the two countries,' Hu said.

'Co-operation rather than confrontation between the two countries benefits not only the two, but also the whole world.'

Obama can expect to win more investment and trade opportunities for US firms, but cannot hope to solve long-standing disputes over China's trade policies in just one meeting with Xi, according to Liu Li-Gang, head of Greater China economics with ANZ Research.

Jin, the Renmin University expert, said Xi was unlikely to top President Hu Jintao's contribution to Obama last year: a US$45 billion purchase agreement for Boeing jets, in a deal said to support 235,000 US jobs.

Jin said it was taboo for Xi, as deputy head of state, to make a higher-profile diplomatic visit than Hu. 'For Obama, he can get something he badly needs at the moment [business deals]. But he should not expect too much from the Chinese president-in-waiting,' Jin said.

Xi is tipped to promise Obama economic co-operation and further openness in its domestic market, including giving US firms a level playing field, Liu says.

The economist said Beijing might also make an announcement during Xi's trip to boost trade ties, such as purchases of US products including soya beans, wheat and, possibly, pork and beef.

China might pledge to cut import tariffs further on vehicles, farm products and other American goods, Liu said. In terms of energy resources, China could also offer joint ventures and link-ups between Chinese firms and US companies in the exploration of coal, shale gas and clean energy alternatives. 'That is what Obama wants and also what China can give,' Liu said.

Despite Obama's pledges to be stricter on China, some economists say America will ease back on pressuring Beijing over the yuan's appreciation, amid a sharp slowdown in Chinese exports and the fact its inflation rate is outpacing that of the US. 'The yuan issue will become less of a concern than before,' said Shen Jianguang, chief Asia economist with Mizuho Securities.

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