The kerfuffle over the currency and the sinking of the South Korean corvette, the Cheonan, clouds prospects for a complacent Sino-American summit, concludes Gamal Nkrumah The Chinese economic landscape has been transformed. The challenge is how to best feast on the bounty without pigging out. The United States is reduced to hogging the crumbs rather than the rich pickings. "China will continue to steady advance reform of the yuan exchange rate formation mechanism following the principles of being independent, controllable and gradual," Chinese President Hu Jintao told reporters in Beijing on the eve of the United States-China Strategic and Economic Dialogue. US Secretary of State Hillary Clinton flew to China on what is her fifth visit since assuming office. She is a popular figure in the People's Republic just as her husband, former president Bill Clinton, was the most popular American leader in China being extolled for speeding up China's entry to the World Trade Organisation (WTO). The two countries have much to discuss. They are at odds in many respects, but also have tangible common interests. Together they have to sort out much of the world's, or at least Asia's, challenges. "As permanent members of the UN Security Council, the largest developing country and the largest developed country, China and the US, face common tasks and shoulder important responsibilities," Chinese President Hu Jintao was quoted by the Chinese Xinhua as saying on the eve of the summit. In spite of its economic clout, China perceives itself as the champion of the underdog. The US, on the other hand, is widely perceived as the defender of the rich and powerful. "What is important is to respect and accommodate each others' core interests and major concerns," the Chinese president emphasised. Hu also added that the two nations should "appropriately handle the sensitive issues and strengthen the foundation of mutual trust." What confounds pundits is the banality of such pronouncements and the empty rhetoric concealing the steel fists raring for a showdown. This summit will be just another photo opportunity and a play on semantics, with the showdown yet to come. Economic concerns top the agenda of the Sino-American summit. "Innovation flourishes best when markets are open, competition is fair, and strong protections exist for ideas and inventions," US Treasury Secretary Timothy Geithner spouted the standard US line. He accompanied Clinton on her visit to China. "Economic growth in the US and China is broader and stronger than many had anticipated, even a few months ago," he added. Beijing has reservations about Washington's China policy. The Chinese want to see the US lift its export controls on high tech inputs for Beijing's products. China's president believes lifting the targeted sanctions against Chinese companies would help break political deadlock. The Americans are dragging their feet over this most contentious issue. The Chinese president can point to an improvement in Washington's behaviour under United States President Barack Obama. There have been startlingly breakthroughs, but the US has notably been backing off on trying to direct China's internal affairs. Differences in perspective remain with regards Tibet and Taiwan, which China views as internal affairs. But even there US provocations have been less obtrusive than under all previous administrations. The recent Western media fracas accusing North Korea of intentionally sinking the South Korean Cheonan "warship" suggests that all might not be smooth sailing. Pyongyang remains one of the key stumbling blocks poisoning relations between the two nations and it is highly unlikely the People's Republic of China will abandon its fraternal communist neighbour. Perhaps there is some scheme being hatched by Washington hawks. Whether Obama is privy to these machinations is debatable. He will no doubt discuss the matter with his Chinese counterpart. Another sore spot is Iran. China is reluctant to irk Iran, one of its main energy suppliers. Differences over Iran's nuclear ambitions constitute causes of potential aversion between Beijing and Washington. Beijing backs Tehran's right to acquire peaceful nuclear potential irrespective of Washington's obsession with cowing Iran. After Iran's recent concessions on fuel reprocessing, it is most unlikely that China will be the key Security Council member facilitating the US sanction intent on destabilising the Iranian economy. Diplomatic partnership, however, has become a key characteristic of contemporary international politics, with George W Bush now safely out to pasture. There is a growing realisation that China and the US must work hand in hand to resolve the sticking points. Older Asian allies such as Japan and South Korea, while not wishing to be sidelined altogether, welcome the growing rapprochement between Washington and Beijing. As Washington would have it, China and the US are inching ever closer politically, but have stopped short of forming a de facto working relationship. There is no guarantee of success for Washington's efforts. China has a very different take on relations. It has shrewdly used US technology and the ocean of American dollars searching for global profits to create a miracle of growth and has transformed itself into the world's mightiest industrial powerhouse, the second largest economy after the US. But this is as far as the "inching" goes with regards to Washington. "Through dialogue, we hope to understand the details on the time table and the roadmap to end the restrictions the US has placed on the high- tech products, to treat Chinese companies investing in the US equally and to acknowledge the current status of the Chinese market," Chinese Vice Premier Wang Qishan noted on the eve of the Sino-American summit. "We want to encourage you to go further, to take additional steps to make sure that companies that export to China, that operate in China and that compete with Chinese companies around the world are competing on a level playing field," he carefully taunted the gullible Clinton. Trying to paint a rosy picture, Clinton clumsily conjured a sanguine sound byte: "They want to sell goods made by American workers to Chinese consumers with rising incomes and increasing demand. This is a win-win for our two countries," she explained in Shanghai. The Sino-American partnership is however fraught with serious and rather complex problems. The American government is saddled with the muddled structure it created in East Asia in the Cold War period. China is more than willing to put the pieces together to its own liking. China now controls the Asian landmass through its economic stranglehold, while America is losing its grip on its maritime pre-eminence. The accusations surrounding the sinking of the Cheonan highlight this crucial unspoken recent development in Sino-American relations. The highly dubious accusations that North Korea is senselessly preparing to launch war against its rich, powerful southern twin brings to mind similar accusations against Vietnam in 1964, when a staged sinking of a US vessel was used as a pretext to push the war against Vietnam to a new level and worsen already disagreeable US-Sino relations. Today relations have considerably altered, but alarm in some quarters over the ever greater dependency of the US on China both economically and politically is the motivation for cooking up a Korean crisis at precisely this moment. The ongoing realignment of Chinese-US relations and China's new power is the real meaning of yet another of the diplomatic niceties being spewed by Beijing: "This new era offers unprecedented opportunities for China-US relations. It also brings challenges. China is ready to work with the new US administration and American friends from all walks of life to build a better future, on the basis of achievements in the past three decades," Ambassador Extraordinary and Plenipotentiary of the People's Republic of China Zhou Wenzhong stressed noting that the two countries should "accommodate each others' core interests". What interests he has in mind are left to the imagination of political strategists.
