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Private efforts help resolve public tensions between U.S. and China

By John Pomfret
Washington Post Staff Writer
Saturday, April 10, 2010; A01

On March 29, halfway into a statement about an upcoming trip to the Balkans, Deputy Secretary of State James B. Steinberg pivoted somewhat incongruously and began discussing a recent trip he had taken to Beijing.

Addressing reporters at the Washington Foreign Press Center, Steinberg announced that contrary to the worries of some (he didn't say who), U.S. policy on China had not changed, that the United States still abided by its "one-China" policy and that it opposed independence for Taiwan and Tibet. His statement, he assured the assembled journalists, was "for the benefit of our Asian colleagues here."

Actually, it was for the benefit of China.

Steinberg's appearance came in the middle of an intensely choreographed series of moves by Washington and Beijing to get the U.S.-China relationship back on track. After almost three months of bickering over Google, arms sales to Taiwan, China's currency, the Dalai Lama and Iran, both sides had concluded that it was time to move on.

As each side issued demands, the United States bent a little. It used appearances by President Obama and Steinberg to soothe ruffled feathers in Beijing and announced that it would delay a Treasury Department report that was expected to allege that China was keeping the value of its currency, the yuan, artificially low.

But China bent even more, diplomats from both countries say. It acceded to a U.S. request that China join talks on sanctioning Iran for its alleged nuclear weapons program. China said its president, Hu Jintao, would attend the Nuclear Security Summit, which will begin Monday in Washington.

Beijing signaled strongly that it would soon revalue its currency, just weeks after its premier had said no revaluation was in the cards. And it came away empty-handed in its demands that the Obama administration stop selling weapons to Taiwan and that the president discontinue the decade-old tradition of meeting with the exiled Tibetan spiritual leader, the Dalai Lama.

The diplomatic maneuvering that started in March and continued through this week provides an important vantage point on what Obama has called the United States' most important bilateral relationship.

Analysts said it marked a sign that the president -- who became directly involved in the negotiations at least once and guided their course throughout, administration officials said -- has matured significantly in his ability to deal with China.

Important reality

But the diplomatic dance also underscored an important reality in U.S.-China relations. Although it's fashionable to think that China, with its juggernaut economy and its billions in U.S. Treasury bonds, has the United States at its mercy, Chinese and U.S. analysts and government officials said the events of the past month show that Beijing is still having a hard time translating its new heft into the real power to force changes on those perennial issues that Chinese leaders consider part of their "core interests" -- Tibet and Taiwan.

"It was exceptionally deft handling of the Chinese. It was a choreographed diplomatic deal," said Bonnie S. Glaser, an expert on China at the Center for Strategic and International Studies. "There was a recognition on the part of U.S. officials that China was ready to reengage but needed help to get out of the corner that they'd put themselves into."

The "handling" began days after Obama's Feb. 18 meeting with the Dalai Lama, whom Beijing has described as a "splittist" intent on fragmenting China. Weeks before, the United States had announced that it was going to sell $6.4 billion in weapons to Taiwan, China's nemesis, sending relations into a tailspin.

The spat especially derailed the administration's hope of quickly winning U.N. Security Council approval for new sanctions on Iran. China, which has veto power on the council, refused even to entertain a discussion on the topic.

Private signals

While Chinese officials in Beijing were railing against the Dalai Lama meeting and alleging that bilateral relations were broken and that it was up to the United States to fix them, Chinese officials in Washington privately signaled to the administration that they would welcome a visit from Steinberg and Jeffrey A. Bader, the director for Asia at the National Security Council.

About the same time, China began to change its tune on whether Hu would attend the nuclear summit. Chinese sources said he had instructed China's missions in Washington and at the United Nations to write cables arguing that his failure to attend would make China look petty. U.S. officials noted a shift, as Chinese interlocutors changed their response from "difficult to attend" to Hu had "yet to decide."

Steinberg and Bader visited China from March 2 to 4 and were confronted by angry Chinese officials making demands. First was that Obama never again authorize the sale of weapons to Taiwan. Second was that the president never again meet with the Dalai Lama.

But behind the Chinese bluster, the two Americans sensed that Beijing was looking for a face-saving way for Hu to attend the nuclear summit. Once they returned to the United States, more talks were held with China's outgoing ambassador, Zhou Wenzhong, and its new one, Zhang Yesui, even before Zhang formally presented his credentials to the U.S. government.

To mollify Beijing, the United States offered to reaffirm, in a public setting, its policy that there is "one China." At the same time, it also agreed to China's request that the new ambassador be granted a meeting with Obama. In return, U.S. officials requested that China take part in talks on imposing sanctions on Iran -- which it had refused to do.

Then came the rollout.

On March 24, word leaked that China had pledged for the first time to join in substantive talks on sanctioning Iran for defying U.N. demands that it stop enriching uranium.

Five days later, Obama met Zhang and used the formulation "one China," but the president spent the rest of their 15 minutes together pushing China to help with Iran and to allow the yuan to appreciate against the dollar. Later in the day, Steinberg held his Balkans-to-Beijing news conference.

On April 1, China announced that Hu would be coming to the United States for the summit and a one-on-one meeting with Obama. That evening, the two presidents conducted a phone call that lasted so long that Air Force One had to stay on the runway for 10 minutes after landing at Andrews Air Force Base to enable Obama to finish the conversation.

Two days after that, Treasury Secretary Timothy F. Geithner announced that he would delay the Treasury report, which had been expected to name China a "currency manipulator." Geithner then made a surprise stop in Beijing on Thursday to meet with Vice Premier Wang Qishan, who handles the economy.

U.S. officials said Geithner's decision to delay the report was made without regard to the other diplomatic moves. "There was no attempt to tell Geithner, 'You have to do this because it will give us another eight degrees on Iran,' " a senior U.S. official said. "The decisions happened in airtight compartments."

The lessons from the three months of tension with Beijing are unclear. China's reaction to the Taiwan arms sale could have scared the administration off any subsequent plans to provide Taipei weapons, including a batch of 66 F-16 fighters. But it also might have prompted the administration to conclude that China's reaction was not that unusual.

"The U.S. felt that what China was doing fell well within the ballpark of past reactions," the senior administration official said. "They have a certain time period for their anger, and then they move on." U.S. officials noted that China did not carry through on threats to sanction American companies involved in the arms sale.

As for China, Zhu Feng, director of the international security program at Peking University, said he thinks Beijing needed to calibrate its responses better. "Yes, Taiwan and Tibet are both Chinese 'core interests,' " he said, "but if an arms sale is strictly defensive, why is it automatically counted as a grave violation to China's core interests?"

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