China deploys a US charm offensive

China's presidential designate is visiting the US at a time when relations between the two powers are tense, but Xi Jinping will be looking to strike a friendly tone.

Chinese presidential designate and Vice President Xi Jinping began his first official visit to the United States this week. Xi has already met with US President Barack Obama and other senior officials, including Vice President Joe Biden, Secretary of State Hillary Clinton and Defense Secretary Leon Panetta. Xi is also scheduled to stop by Iowa to meet with local lawmakers, discuss agricultural deals and spend an evening in Muscatine, where he stayed briefly in 1985. The Chinese vice president will conclude his visit in Los Angeles, where he is expected to meet with several business leaders.

Xi is not yet his country's top decision maker – China's leadership transition takes place in October but will not be formalised until March 2013 – but he knows that the US, in the throes of its own campaign season and currently re-engaging in the Asia Pacific region, represents the single biggest diplomatic challenge to his eventual administration. He is therefore using this trip to establish his image early on and set a friendly tone for future US-China relations. As evidenced by his recent comment that there is "ample space" in the Pacific Ocean for both countries, Xi is trying to ensure that strained bilateral relations do not complicate his transition to the presidency.

Unlike current president Hu Jintao's visit as vice president 10 years ago, Xi's visit comes during a time of tense relations between the US and China. Washington and Beijing's increasingly competitive relationship has been complicated by economic and trade disputes and conflicting regional and global security agendas.

Two decades of pronounced economic growth in China, followed by a weak global economy, have been hampered by a contradictory model by which Beijing resolves economic issues. This has motivated Beijing to undertake a difficult economic restructuring. The EU debt crisis has added to China's economic woes. Addressing these economics alone would be difficult, but China's leadership transition compounds the matter. A politically sensitive situation in which dissatisfied elements of society will voice their concerns over social issues, the transition will no doubt challenge China's hold on social stability. Stability in China's external affairs will allow Beijing to concentrate on its domestic agenda.

China's economic expansion goes beyond its borders and into its periphery. To protect its assets, Beijing has become more assertive in regional and global security issues. Indeed, China has enlarged its military presence in the region within the past three years, worrying many of its neighbours, particularly those bordering the South China Sea and East China Sea. These countries welcome the US re-engagement in the region as a way to counterbalance Beijing's assertiveness.

Perceived as having left the region to deal with more pressing issues, such as the wars in Afghanistan and Iraq, the US has embarked on a more aggressive campaign to increase its activity in China's periphery. (It was the US departure that allowed China to grow politically, economically and militarily.) Washington has increased its military presence in the region through Australia, Singapore and The Philippines, partly in response to tensions in the South China Sea. It also has enhanced bilateral relations with Indonesia, India, Australia and, to a lesser extent, Myanmar, Cambodia and Laos. In addition, Washington has used its role in multilateral groups like the Association of Southeast Asian Nations, the East Asia Summit and Asia-Pacific Economic Cooperation to enhance its security and economic influence and to increase its involvement in sub-regional groups. It is also using the Trans-Pacific Partnership, a group to which China has not been invited, to counter China economically.

The US presidential race compounds the problem. With high unemployment by US standards and a staggering budget deficit, US lawmakers and potential presidential candidates increasingly have targeted China as the source of some of their political grievances, especially with regard to trade relations – the US trade deficit to China reached $295.5 billion in 2011.

These grievances have led to heightened rhetoric – and potentially, direct action – against Beijing. Since 2010, the US has voiced concern over China's subsidies to its renewable energy sector, and there is talk of setting up barriers to Chinese imports. Obama himself mentioned China five times in his annual State of the Union address, pledging to create a US government taskforce designed to monitor China for possible trade and commercial violations. For China, a trade war with the US would jeopardise efforts to restructure economically and address unemployment concerns.

Converging Interests

Despite these tensions, the US and China are important trading partners. In 2011, US exports to China amounted to $103.9 billion, while Chinese exports to the United States totalled $399.3 billion. (At present the US is China's second largest export market and sixth largest import market.) There is strong potential for cooperation in the fields of clean energy, environment and medicine. China is also emphasising trade relations at the state level.

In short, neither side wants relations to worsen – especially if a regression complicates Washington's or Beijing's leadership transitions. Xi's visit will therefore focus on converging interests rather than on trade tensions. Xi already has issued statements that advocate cooperation and suggest that China is not trying to dominate or compete in regional security affairs.

Otherwise, the US visit will allow Xi to craft how he is perceived in the US. He is seen as more charismatic and ideologically flexible than his predecessor, he is thought to be fond of American culture and his daughter is studying in the US. Whether or not he will attempt to enact drastic reforms regarding the US, a favourable image may endear him to the American public. Reprinted with permission of STRATFOR.

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