Obama-Xi Meeting Highlights Thorny U.S.-China Relations

Obama-Xi Meeting Highlights Thorny U.S.-China Relations

The planned meeting this week between President Barack Obama and Chinese President Xi Jinping puts a spotlight on major questions that both countries have over one of the world’s largest trading relationships.

While China is looking for new openings to advance larger national goals of economic development, some U.S. interests are urging Obama to use the talks to take a tougher approach with Beijing on issues including international trade and cybersecurity.

The Alliance for American Manufacturing, a domestic manufacturers and union group, on Monday called on the administration to bar Chinese products from government procurement contracts and to designate the country as a currency manipulator, said Scott Paul, the group’s president.

Paul also said the United States should hold China responsible for what he called “pervasive cyber-hacking” and theft of U.S. military and commercial secrets. Recent news reports indicated that Chinese hackers had obtained secret information about U.S. weapons systems.

“In essence, we are bankrolling China’s ability to spy on us and expand its military capabilities, thanks to the huge trade deficits we continue to run,” Paul wrote in a commentary published Sunday at realclearpolitics.com.

White House spokesman Jay Carney told reporters Monday that the two presidents would discuss an array of topics during their upcoming session in California, “and certainly cybersecurity will be one of them.” But Carney cautioned that the two leaders’ discussion may not produce what he called specific actions or agreements.

“The relationship that we have with China is broad and complex, and it is very important for these kinds of meetings to take place for that relationship to be developed,” Carney said.

He called the meeting part of an “ongoing engagement” with China at all levels of government. “And it’s very important because of the size of our economies, the interdependence that we have as engines of global economic growth, the various issues where we cooperate and the various issues where we don’t see eye-to-eye on all things,” Carney said.

China was the United States’ second-largest trade partner in the first three months of the year, behind only Canada and ahead of Mexico, accounting for 13.6 percent of total U.S. international trade in the first quarter, according to the Department of Commerce. But the U.S. had a $49.1 billion trade deficit with China in that time, with imports from China nearly double the value of American exports.

The administration is seeking to focus trade and international economic development policies on Asia, where its largest effort is the negotiation of a sprawling, multicountry trade pact, the Trans-Pacific Partnership. China is not included in that deal — many TPP proponents have called the talks an attempt to establish a counterbalance to China’s economic dominance in the region — but the country signaled its possible interest in joining the pact.

“We will analyze the pros and cons as well as the possibility of joining the TPP, based on careful research and according to principles of equality and mutual benefit,” said Shen Danyang, a Chinese Commerce Ministry spokesman on the ministry’s website over the past weekend. “And we also hope to exchange information and materials with TPP members on the negotiations.”

Alan Tonelson, a fellow with the U.S. Business and Industry Council, called that comment a “very revealing sign” that China doesn’t take seriously the idea that it will be kept out of the TPP for long.

Tonelson, who opposes the TPP deal, said China remains the heart of the Asian manufacturing economy. “So the idea that we’re going to have a trade agreement with East Asian countries, who cooperate very closely with China, but we’re going to leave out China, just doesn’t make economic or industrial sense.”

In his briefing with reporters Monday, Carney stressed that the administration’s pivot to Asia “has not been against any nation, not against China, but for the important role that the United States has traditionally and needs to continue to play in that region.”

In the call with reporters, Paul of the manufacturers’ group reiterated his concerns about the U.S.-China relationship and said the United States has agreed to too many concessions when it comes to China without China reciprocating.

Paul also said that even though he generally regards foreign investment in the United States as a plus, he had concerns about Shuanghui International’s bid to buy Smithfield Foods. He said the proposed deal raises questions about U.S. food security and prices to consumers.

The announcement that Shuanghui International had offered to buy out Smithfield Foods drew criticism and concern from some quarters. Chinese food processors have faced criticism for food safety practices recently, and Shuanghui has apologized for some past practices involving tainted meat, according to published reports.

The U.S. regulators that will review the deal include the Committee on Foreign Investment in the U.S., an interagency group that screens foreign investment for potential national security risks.