What Happened to China-US Relationship?

Recently, the Sino-US relationship has suddenly turned so bad a lot of people feel very surprised and puzzled. Not long ago, people still have high hope and infinite vision of the improved Sino-US bilateral ties. In the United States during the past one year, new international concept such as "G 2" and "Chimerica" has emerged to describe the close rapport between China and the United States.
Although the Chinese Government did not accept these concepts, but many people were happy to see such close cooperation between the two countries materialized. To China, Sino-US relationship has always been its most important ring in diplomacy as compared with China's relationship with other countries. It is only when Sino-US bi-lateral ties are stabilized that China can stabilize its relationship with other countries in the world.

Breakthroughs in Diplomatic Relationship
When US President Barack Obama came to power last year, people's expectation of Sino-US relations was to a vertex. The Obama government discarded the traditional US China policy approach of trying to repress Beijing first before showing any kindness to China. Instead, in a short period of six months in 2009, Obama achieved many breakthroughs in handling US diplomatic relationship with China. The US-China Strategic and Economic Partnership Dialogue was held in Washington in June 2009. The bi-lateral Sino-US military ties also achieved a new breakthrough with senior military officers from both nations carried out exchanges and visits during the latter part of last year. Towards the end of last year, when President Obama visited China for the first time, Obama upgraded US-Sino ties as having "shared partnership" status to face global and future challenge.
But in recent months, the development between China and the United States has really gone beyond many people's expectations. The initial signs were the U.S. trade protection measures against China. On the New Year's Eve [ 30 December], the US International Trade Commission announced the US imposition of penalty tariffs on imported Chinese steel pipes used to deliver oil and gas in the petroleum industry. Since the beginning of September 2009, the US trade protectionist action was speedily reflected in the academic and policy circles.
On 4 January, US economist Paul Krugman published an article titled "The Chinese People's New Year" in his special column in The New York Times. In this article Krugman opined that the Chinese government has maintained an artificially high trade surplus and pursued a mercantilist policy. He said that to the United States, China's exchange rate policy carried with it a predatory implication. He said that China was only interested to use its currency exchange rate policy to reap profit for its "export industry." Krugman said this policy by the Chinese Government has led to the high unemployment rate in the United States. Krugaman also claimed China as the culprit for the manufacturing crisis and property bubble crisis in the United States. In the view of Krugman, majority of China's foreign exchange reserves were used to invest in the US treasury debts and bonds. This has led to the US interest rate having to maintain at a relatively low level. However, in the end it has also given birth to the real estate bubble crisis. As such Paul Krugman advocated a trade war with China in order to change the economic imbalance between the United States and China.
It was on the same day that the USA Europe Asia Group with its headquarters in New York released a report listing 2010's 10 Potential Risks. Top the risk was the deterioration of Sino-US relations. The report put it bluntly that the G2 idea has been aborted and that the Sino-US relations will deteriorate significantly during the year.
What followed was the arms sale to Taiwan case. On 30 January, the US Government announced a new round a total of $ 64 billion dollars in arms sales to Taiwan, including 60 Black Hawk helicopters, and advanced Patriot PAC-3 missiles.

Concept Splits for Economic Reason
When China can maintain a flexible response in dealing with economic and trade issue with the United States, it becomes logical that if the United States ignores China's core interest, the reaction of China toward the United States will naturally become stronger and tougher. The Taiwan issue is China's core interest issue. It is thus not difficult for us to understand the response of China toward the US arms sale to Taiwan. China has already announced the suspension and postponement of Sino-US military exchanges and visits. It said it would also impose sanctions on those US companies who participated in the arms sale to Taiwan
Why, then, Sino-US relations can sudden turn from the concept of "China-US" or "Chimerican" to what it is now? "The scholar who mooted this "Chimerican" concept did warn that for economic reasons, the China-US concept might "divorce." If China enhances domestic demand and reduces exports, while the United States raises the accumulation of fund and reduces imports, then the economic interdependence between the two countries will be reduced.
However, the US people do not realize that as far as economic issue is concerned or even as far as the relatively vague human rights and democracy issue is concerned, China's response can allow a very large space for flexibility. In the non-core national interest areas, the political game between China and United State apparently is not one that can lead to a zero-sum result. But it is very different when the issue involved will affect a nation's core interest, for the outcome can be very different. This political game can easily become a zero-sum game.
The status of Sino-US relations can be summarized in one sentence: The United States is not willing to adjust its policy by putting China's core interest in consideration while China's economic growth and economic strength has reached a stage that China can ask the United States to make adjustment to China's core interest.
Ever since China gone through its reformation period and became opening up to the outside world, and although Sino-US relations have gone through good and bad times in the past, but generally speaking, it was China that has to make adjustment and adaptation to the United States (and to the West). But China was different from the former Soviet Union. During its transformation period, China has chosen not to build another system but to integrate with the existing world system.
Through the integration and accession into the present world system, China learned to upgrade is national building within this system. At the same time, China has also established a "peaceful emergency" or "peaceful development" international strategies to face the outside world. With China's rapid development within the framework of existing world system, the role and position of China within this international system has also become more and more prominent and important. From an economic point of view, China has now surpassed Japan to become the second-largest world economic body.

Mutual Adjustment
Although China's economic strength based on per capita GDP cannot be compared to the West, but from the perspective of the West, China is already the de facto economic power. This is the source of the G2 concept. With the rise of China, China is bound to rise above other countries and move closer to the United States. The concept of G2 is not only refers to Sino-US bilateral relations, but more important it refers to the role of China and the United States in handling international affairs. This G2 concept is to function within the international arena.
It is obvious that when dealing with international affairs, more and more international relationship cannot be resolved without the close cooperation between China and the United States. The ability of China and the United States to work together can clearly reflect that such Sino-US bilateral cooperation will not only in line with international interests, it is also conform to China and the United States' own interests.

Common Interests
However, when China and the United States make effort to mutually develop their common interests, it does not mean that such development can coincide with their own respective core national interest. From China's perspective, China has always stressed on seeking "common grounds" amid "differences." China hopes to use "common" interest to resolve "different" interest. As a matter of fact, in international relations, no matter how great are the "similar interests" between two countries, such "similar interests" can never balance off the "different core national interests" between the two countries. This is the reason why people say a country's core national interest can never be adjusted to fit another country's interest. Since China and the United States have different national core interests, how then can these two countries get along with each other peacefully? This is especially so when the continual rise of China makes its national strength getting closer to the United States as time goes by. The problem relating to the rise of China and its impact on the United States can become particularly important to these two nations. To put in simple term, peaceful coexistence between China and the United States has to be based on mutually making adjustment to deal with the other side's core interest now.
The problem now is that China has historically been making adjustment to the United States. However, it is now the time for the United States to make adjustment to China. Yet it is clear that the United States (and Western) is not ready or is unwilling to make adjustment of its policy to the emerging China. It is especially difficult for the United States to do just that. For a long period after the Cold War the United States has become the sole hegemony in the world. The United States has never developed a policy of adaptation to other countries. For the United States to develop such a mentality to make adjustment to other countries is difficult and for such attitude to translate into a policy is even more difficult.
China has no intention to replace the hegemonic position of the United States in world leadership. We cannot see such a replacement of hegemony in world power from the United States to China to take place in the long future. Perhaps such a replacement scenario can never happen. However, China has accumulated considerable strength and ability to ask the United States to respect China's main interests as a US policy adjustment now. The current financial crisis has exposed the shortcomings of the US system, while publicizing some of the Chinese system to demonstrate its superiority in a number of fields. In dealing with climate change issue, China's behavior shows that, as a rising power, China could 'make a difference' in the international community.
More importantly, since China and Western economies have the nature of highly interdependency on one another, China has the opportunity to sanction the West. Since China made effort to open up and got in touch with modern age and the West, what people witnessed in the past has always been the West taking economic sanctions on China. But for the first time the world community also heard that China wanted to sanction the United States. While China knows such sanction act will also affect China's own national interests, but in order to protect China's core national interests, China does not seem to have any hesitation going for the same.

China's Core Interest
Such recent development shows that Sino-US interaction must now enter a new level and new heights different from the past. When the relationship between China and the United States looks more and more like the G2 model, the only way the Sino-US bilateral ties can be stabilized is when both sides are willing to make policy adjustment toward each other's core national interests.
When the United States is not ready to make policy adjustment to consider China's core interest, the bilateral ties between the two countries can be very fragile. The direction of how the Sino-US relationship moves now can have a long lasting impact on the future bi-lateral development between the two countries. This critical Sino-US bilateral direction can affect not only Chin and the United States but also the international community.
The United States has two choices. The first is to continue its confrontation with China. The second is to gradually develop a mentality to adapt to China's core interests and based such changed mentality, also makes policy adjustment toward China. From China's perspective, China also has two choices. The first choice is to continue its confrontation with the United States and the second choice is for China to continue making effort to help the United States making policy adjustment to respect China's core interest.

Unilateral Adjustment
That will mean that China's US policy has to be adjusted accordingly. As we observe, until today, at different stages China has always allowed the United States to "contain", "repress" and "digest" China. But now, with the improvement of China's own national power, China must change such passive situation and take proactive action to see how it can also "engage" and "digest" the United States although China still does not have the ability to "contain" or "repress" the United States.
We trust that even if China has the ability to "contain" or "repress" the United States in the future, the Chinese authority would understand that such approach would not be the best choice China would want to make. This is because such a policy will not do any good to China, to the United States and to the international community at large. But at this very moment, China does have the capability to "engage" and to "digest" the United States. This is a constructive rather than a confrontational approach. How the Chinese authority can translate this strategy into a practical and effective policy to deal with the United States can be a massive and difficult task faced by the Chinese national leaders.
It is only when China is willing to face this issue squarely and it is only when China has the ability to resolve this bi-lateral issue with the United States in this manner that China can change the status quo in Sino-US bilateral ties whereby China is always expected to make the structural imbalance unilateral adjustment to the US policy toward China.