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China Is at the Heart of Clinton's First Trip

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By Glenn Kessler
Washington Post Staff Writer
Sunday, February 15, 2009

When Hillary Rodham Clinton was running for president last year, she raised eyebrows in foreign policy circles -- especially in Japan, the key U.S. ally in Asia -- when she declared in an article in Foreign Affairs that "our relationship with China will be the most important bilateral relationship in the world in this century."

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Now, as secretary of state, Clinton will be putting that bold pronouncement into action. She departs today for Asia on her maiden voyage as the nation's chief diplomat, and Tokyo snared the symbolically important first stop on four-nation tour. But Clinton and other Obama administration officials have made it clear that they want to move dramatically forward in relations with Beijing, finding new avenues for cooperation between the world's biggest economy and the world's fastest-growing economy, especially on climate change and the environment.

"Some believe that China on the rise is, by definition, an adversary," Clinton said in a speech Friday to the Asia Society in New York. "To the contrary, we believe that the United States and China can benefit from and contribute to each other's successes. It is in our interests to work harder to build on areas of common concern and shared opportunities."

In the eyes of many analysts, a better relationship with China is one of the few foreign policy success stories of the Bush administration. But Clinton and her aides have suggested that the overall relationship was hijacked by the Treasury Department, keeping it largely focused on economic policy. She has argued for what she calls a "comprehensive dialogue" and a "broader agenda," and aides said she will bring proposals to the Chinese leaders for regular discussions at very high levels of both governments.

Analysts say the moment is ripe for such a discussion between the two countries. Despite the financial crisis and the turmoil in the Middle East, "in the longer sweep of history, historians will judge this administration and our generation on how we managed the shift of power from the West to the East and the rise of China and India," said Michael J. Green, formerly President George W. Bush's top White House adviser on Asia.

"They are in a good position with China," said David Shambaugh, director of the China policy program at George Washington University. "They inherited the best relationship we have had with China in 20 years. There is a high degree of understanding, professionalism and trust, and there is deep interdependence between the two countries."

Still, Clinton's approach also carries the risk of roiling the relationship at the moment when the struggling world economy is increasingly dependent on cooperation between the two countries. Clinton, as presidential candidate and as first lady, was highly critical of China's human rights record -- sensitive topics in a year that will mark both the 50th anniversary of the Dalai Lama's flight from Tibet and the 20th anniversary of the uprising in Tiananmen Square.

In her speech Friday, Clinton noted that "as part of our dialogues, we will hold ourselves and others accountable, as we work to expand human rights and create a world that respects those rights . . . where Tibetans and all Chinese people can enjoy religious freedom without fear of prosecution."

State Department officials played down the prospects of major announcements on the trip, but they said it is symbolically important that Clinton is the first secretary of state in nearly 50 years to intensely focus his or her maiden voyage on Asia.

In addition to Japan and China, Clinton will visit South Korea and Indonesia. She will bring along Todd Stern, the administration's special envoy for climate change negotiations, in an effort to begin discussions on joining forces on environmental issues. China recently passed the United States as the world's biggest emitter of greenhouse gases, Clinton noted Friday. To highlight public-private partnerships, she will visit a clean thermal power plant built with General Electric and Chinese technology.

In North Asia, the stalled talks on North Korea's nuclear program will be a key topic. China chairs the six-nation negotiations, which have been stymied by Pyongyang's refusal to commit to a plan to verify the extent of its nuclear activities. While Clinton has tried to reach out to North Korea, she also agreed to meet with the families of Japanese citizens abducted by the country.

The Indonesia stop is intended to demonstrate the administration's interest in building ties in Southeast Asia, where China has made important trade and diplomatic inroads in the past five years as the United States was distracted by the war in Iraq. Clinton plans to announce that she will attend a Southeast Asian ministerial meeting this summer -- which her predecessor, Condoleezza Rice, tended to skip -- and Clinton is expected to indicate a willingness for the United States to sign a treaty of "amity and cooperation," which the Bush administration refused to do. Other nations in the region have signed the treaty, which calls for peaceful relations with the Association of South East Asian Nations (ASEAN).

Although Japan remains the closest U.S. ally in the Pacific -- and Clinton on Friday said the 50-year security alliance with Japan "has been and must remain unshakable" -- the government of Prime Minister Taro Aso is unpopular and increasingly weak. The yen has soared to a 13-year high against the dollar, largely because Japanese investors are liquidating their overseas accounts while there is little overseas demand for Japanese assets, thus pushing the country deeper into recession.

By contrast, the Chinese leadership appears increasingly sure of its ability to weather the economic storm and play an important role in efforts to stem the crisis. "Will China's economy continue to grow fast and steadily? Yes, it will," Premier Wen Jiabao said in a speech last month at the World Economic Forum in Switzerland. "We are full of confidence," he declared, crediting "our right judgment of the situation and prompt and decisive adjustment" of policies.

The International Monetary Fund this month rated China's economic stimulus plan as being the second-largest in terms of gross domestic product and having the second-greatest impact among the Group of 20 nations managing the economic crisis; the Obama administration's plan in the United States was close behind. (Oil-rich Saudi Arabia was first.)

"The Chinese stimulus is the gold standard in terms of the countries which matter," said Nicholas R. Lardy, senior fellow at the Peterson Institute for International Economics. "She ought to give them credit for that. . . . The Chinese are increasingly confident. I think the government feels they have a good program in effect and it will help economic growth."

China holds nearly $700 billion in U.S. Treasury securities, which some analysts have said China could use as lever against the United States if relations begin to fray. But in a signal of the two countries' growing interdependence, a top official recently said in New York that Beijing had little choice but to keep buying them.

"Except for U.S. Treasuries, what can you hold?" Luo Ping, a director-general at the China Banking Regulatory Commission, said to reporters. "Gold? You don't hold Japanese government bonds or U.K. bonds. U.S. Treasuries are the safe haven. For everyone, including China, it is the only option."


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