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Comment: Reframing the US-China rivalry a brave move for Obama

Updated On: Jan 31, 2011

Although President Barack Obama's domestic agenda dominated his recent State of the Union address, the speech also purposefully reframed the economic rivalry between the United States and China, writes Therese Leung, Associate Fellow of the SIIA.

Although President Barack Obama's domestic agenda dominated his recent State of the Union address, the speech also purposefully reframed the economic rivalry between the United States and China - a relationship he believes should be based on tough but friendly competition to the benefit of both countries.
This was a brave stance for the President, as recent surveys show that Americans have increasingly negative perceptions of China. According to the latest Washington Post-ABC News poll, more than 60 per cent of Americans view China as a threat to American jobs and security.
Congress' approach to China is no warmer. Both Democrat and Republican leaders in the House of Representatives were visibly displeased after their recent discussions with Chinese President Hu Jintao about trade and intellectual property rights. The one issue that can garner bipartisan agreement from both political parties is that China's policies are harmful to the US economy.
On the biggest stage of all, Mr Obama could have easily exploited this opportunity for political gain at China's expense, like many Congressional candidates during the November mid-term elections. But instead of finger-pointing, he deftly chose to encourage the American public as well as Congress to view China and the other emerging Asian economies not as threats but rather as motivation to work harder in order to retain their economic global pre-eminence.
He acknowledged that various Asian countries had made significant advancements in sectors that the US had once dominated. The US used to be the leader in infrastructure but now countries like South Korea have greater household Internet access and China has faster trains and newer airports than the US. Yet he presented these examples to inspire Americans who are still licking their wounds after an economic recession and remind them of their nation's pioneering achievements, like being the first country to put a man on the moon. Mr Obama challenged Americans to continue to "out-innovate, out-educate, and out-build the rest of the world".
By reframing the relationship between China and the US in friendlier terms, Mr Obama also hopes that there will be greater political acceptance of future Chinese investments in the US and free trade agreements with other Asian countries, both of which could play key roles in US job growth.
It is no secret that the White House is pushing the Senate to ratify the free trade agreement with South Korea after years of agonising negotiations, which would support Mr Obama's export-led growth strategy. The White House has also had several meetings to encourage Chinese business leaders to invest in the US.
However, Mr Obama is also acutely aware of the prickly politics, and that these initiatives will survive only if the public understands that China and other Asian economies do not have to be economic threats, but economic partners.
In 1989, when Mitsubishi purchased the iconic Rockefeller Center in New York City, many feared the Japanese economic juggernaut overtaking the US, provoking a backlash. The worry is that future Chinese investments in the US might receive the same response. While the newly-ascendant Republicans are supportive of free trade, the public is still highly sceptical.
Only time will tell if Mr Obama can successfully craft a more nuanced relationship with China that the public can embrace. But do not mistake his warmer tone to China as acquiescence.
He also not-so-subtly reminded the public of one of the key differences between the two nations: One is a democracy and the other is not. It might be harder for democratic countries to implement economic reforms to remain competitive, but Mr Obama would not have it any other way.
Even as the US strives for a new economic orientation to China, it still firmly believes that its method of governing and its form of global and economic leadership is the right way.