Commentary | March 16, 2011

Challenging Obama on China

There is a fundamental divide among the U.S. foreign policy establishment as to whether the rise of China as a global power presents a threat to U.S. interests and policy. And, unlike so much in Washington right now, this divide is not partisan and crosses all facets of China policy. It reflects the deep mistrust still evident in Congress and elsewhere of Chinese intentions, which could imperil the administration’s efforts at its “reset” with China. The looming confirmation process for Commerce Secretary Gary Locke to replace Jon Huntsman as U.S. ambassador to China provides congressional critics a prominent platform from which to criticize the administration’s China policies on a gamut of issues—from the economic relationship to nonproliferation to human rights to security. What this means is that for Obama, the trust-building process may need to begin on Capitol Hill.

The most persistent and most vocal congressional criticism of the administration focuses on economic policy, especially the issue of China’s currency policy. There is widespread concern in the United States that the Renminbi (RMB) is significantly undervalued, which has an adverse effect on U.S. trade and economic interests. In the two-plus years since Treasury secretary Tim Geithner’s confirmation hearing and his declaration (later walked back by the White House) that China was manipulating its currency, congressional critics have found the administration’s efforts sorely lacking. The administration has sought to address those concerns within the context of the larger bilateral relationship, using diplomacy to try to prod the Chinese government into appreciating the RMB. But congressional dissatisfaction has been evident in the bipartisan letters that have been sent to the administration and in aggressive proposals for legislation to pressure the Chinese and the Obama administration on currency appreciation and remedies.

Locke is certain to face some tough questions on the currency issue and other facets of economic policy closely related to his tenure as Commerce secretary. In particular, he will be pressed on perennial U.S. concerns on intellectual property rights and the U.S. trade deficit with China, which rose by more than 20 percent in 2010 over the previous year. China’s recent taking of the top manufacturing spot from the United States and the persistence of the global economic crisis ensure that economic issues will continue to be high on the agenda.

Another highly-contentious issue is China’s adherence to the Iran sanctions regime. A recent letter to President Obama from Senators Joseph Lieberman (I-CT) and Mark Kirk (R-IL), sent on the eve of the Hu-Obama summit, called China’s record on sanctions enforcement and nonproliferation “inadequate and disappointing.” Kirk has indicated that he plans to use the confirmation process to force the issue of the administration’s willingness to initiate sanctions against Chinese companies that are doing business with Iran in violation of Iran sanctions laws. And on March 10, Hillary Clinton received a letter from 10 Senators from both parties (led by Senators John Kyl (R-AZ) and Robert Menendez (D-NJ)) stating: “It appears that Chinese firms in the energy and banking sector have conducted significant activity in violation of U.S. law. We cannot afford to create the impression that China will be given free rein to conduct economic activity in Iran when more responsible nations have chosen to follow the course of action we have asked of them.”

Many senators are hardly satisfied by the administration’s claim that China has begun to improve its export control regime, especially given the latest news from Iran. A recent International Atomic Energy Agency report cited concern over Iran’s lack of engagement with the agency and fears of “possible military dimensions” of Iran’s nuclear program. All of which means that the issue will come to the fore during Locke’s hearing, raising more difficulties for the administration’s efforts to improve U.S.-China relations.

The division in the administration’s China policy is not just between the executive and legislative branches. The bilateral security relationship has also highlighted differences between some in the defense and intelligence communities on what China’s military modernization and burgeoning force-projection capabilities means for the United States. On March 10th, Director of National Intelligence James Clapper labeled both China and Russia “mortal threats” to the United States.   Although he was talking about capabilities rather than intent, Clapper’s remarks undermine the administration’s efforts to frame China as a strategic partner rather than a competitor and provide additional fodder to the administration’s critics on China. Other congressionally-mandated reports have also undermined the administration’s China message: both the Quadrennial Defense Review and the annual review of Chinese military power highlighted concerns that China’s economic and military modernization will ultimately be harmful to U.S. strategic interests. Clapper’s comments will only add to that perception.

What the consistent bipartisan congressional criticism of the administration’s China policy has shown in the past, and what the Locke confirmation process will demonstrate just as vividly, is that Obama’s efforts to improve the U.S.-China bilateral relationship will continue to be challenged at every turn. That is, unless the administration finds a way to involve Congress in the strategic trust-building process it is seeking to promote with China.