China continues to dazzle?

Updated On: Nov 21, 2006

China is as much in the spotlight as the US in the recent pre- and post-APEC moments. But for different reasons.

US President Bush is seen as a “lame-duck” after the Republicans lost the House and Senate to the Democrats. Even he had to compromise and refrain from talking about the War on Terror too much and emphasize on cooperating with East Asian states in the economics arena. Bush’s hands were tied, unable to deliver a permanent normalized trade relations with Vietnam,  pressured by US automakers to open up Asian markets and defied by South Korea which refused to go along with the US naval checks on North Korean vessels. The only shining moment is the clearance of a nuclear deal with India.

As Bush solicits China’s help in restraining North Korea, his words seemed thin in view of the looming shadows of well-known Democrat China critics like Mrs Nancy Pelosi and Mr Tom Lantos. What can Bush offer without the Democrats pulling back the concessions and how can he stop the Democrats from imposing more restrictions on China such as Chinese companies accused of selling nuclear material? On the other hand, China has increasing influence on the US economy. When Chinese central bank governor Zhou Xiaochuan indicated recently that China would diversify its reserves away from the United States dollar, his comments triggered a mild sell-off of the US dollar.

Meanwhile, the ballooning US-China trade deficit - which hit US$166.3 billion (S$260 billion) in September is on course to beat last year's record US$202 billion shortfall and this takes place against the backdrop of China’s accumulation of the world’s largest reserve of US$1 trillion – in fact the largest in world history. As US exports to China jumped 35 per cent in the first seven months of 2006, an appreciative Mr Bush told Mr Hu: 'I strongly support your vision of encouraging your country to become a nation of consumers and not savers, which will benefit our manufacturers, both large and small, and our farmers as well.'

China is a picture of strength. Of recent especial fame is pulling all of ASEAN and African states on separate occasions towards the People’s Republic of China.China’s economic soft power and allure was irresistible. The Chinese made their presence felt without much fanfare and was said to be fast “usurping” Vietnamese influence in Laos.

After courting and dancing with the ASEAN and Africa, Chinese diplomacy is now trying to turn on its charm for South Asia. In Pakistan, President Hu will aidPakistan - which it calls its 'all-weather friend' - to construct several nuclear plants in the future. China has already built one atomic plant in Pakistan. The US-India nuclear deal may be a plus point for US’s South Asian diplomacy. But is the US courtship of South Asia coming too late?

Though the unsolved boundary dispute cast a shadow over Hu’s visit to India, the Sino-India agenda is still chocked full of economic activities. Visiting Chinese President Hu's agenda includes talks with Indian Prime Minister Manmohan Singh, speeches to business leaders in New Delhi and the financial hub of Mumbai. The two countries are also expected to sign a number of agreements to boost bilateral investment protection, push regional trade and enhance transport links. Bilateral trade is highly expected to touch US$20 billion (S$31 billion) in 2006. Rumours are there that conditions are ripe for a regional trade arrangement. Even the much-vaunted nuclear deal with US requires Chinese support. India is also likely to seek Chinese backing for a landmark civilian nuclear cooperation deal with the United States at the 45-nation Nuclear Suppliers Group where the controversial pact is expected to come for approval next year.

China also has some firm handshakes for its main rival in the region – Japan. Chinese President Hu Jintao accepted Japan's invitation to visit in 2007, something both sides agreed on at the sidelines of the Asia-Pacific Economic Cooperation (Apec) summit in Hanoi. Both sides also agreed to set up ministerial-level working groups to strengthen cooperation in trade, investment, energy, science and technology. China, Japan and South Korea will likely meet for a tripartite dialogue at the East Asia summit in the Philippines in December 2006.

Last but not least, the Chinese reached out to an ambiguous strategic ally – Russia.

Mr Putin praised 'deep and truly strategic' links, while Mr Hu highlighted how 'political trust between us is deepening uninterruptedly'. 'This is a serious signal to the United States that it can't act as it likes - that there is a real counterbalance,' said Mr Fyodor Lukyanov, editor of the journal Russia In Global Affairs. Such relationships are underlined by energy diplomacy as China continues to be the top energy customer of the Russians. The Yuan Diplomacy is never really far away.


Wall of doubts looms as India awaits China's Hu (Straits Times, 20 November 2006)

A Dragon in the Land of Elephants (Today, 20 November 2006)

Bush and Hu pledge to keep ties on even keel (Straits Times, 20 November 2006)

Hu turns attention to India and Pakistan (Straits Times, 20 November 2006)

Balancing Act for Hu in India, Pakistan (Straits Times, 20 November 2006)

China's huge reserves (Straits Times, 20 November 2006)

Russia and China flaunt alliance (Straits Times, 20 November 2006)

Two giants treading carefully (Straits Times, 18 November 2006)

Reasserting US relevance in Asia (Straits Times, 18 November 2006)

China's Hu to make plans for Japan visit (Straits Times, 18 November 2006)

China usurping Vietnamese influence in Laos (Straits Times, 18 November 2006)