Team China Outmanoeuvring Team Obama. Diplomatically

February 24, 2009

Team China Outmanoeuvring Team Obama. DiplomaticallyMartin McCauley writes: America is devoting its energies to turning around its economy. The outside world will have to take second place. This leaves a geopolitical void which China has rushed in to fill. ‘Team China’ has been sending an unprecedented number of leaders around the world to demonstrate that the Middle Kingdom is now a major international player.This month, Hu Jintao, President and Secretary General of the Communist Party of China (CPC) visited Saudi Arabia and Africa; Vice-President Xi Jinping covered Latin America; Prime Minister Wen Jiabao attended the Davos economic summit and then toured Europe; Deputy Prime Minister Hui Liangyu dropped in on the leaders of Argentina and Ecuador.

The tours were given added significance by the fact that Xi Jinping is expected to succeed Hu Jintao, both as President and Secretary General of the CPC in 2012 and Hui Liangyu is to take over as Prime Minister, also in 2012. The Chinese leadership is rotated every eight years.

Why did President Hu Jintao visit Mali, Senegal, Tanzania and Mauritius? They are neither big nor rich in oil and minerals. The Chinese Foreign Ministry said the reason was that China was interested in large and small countries in Africa and elsewhere. China’s interests in Africa are ‘not merely confined to energy and resources’, was one comment. Hu was quick to reassure African countries that the economic downturn will not affect the aid they receive from China.

While in Mali, Hu laid the foundation stone of a Sino-Malian Friendship Bridge. It is the largest West African project financed by Beijing. The cost of the bridge is put at $75 million.

In Tanzania, Hu talked about Africa and China finding solutions jointly to the economic crisis. Bilateral trade between Africa and China reached $107 billion last year. With gold and foreign currency reserves of around $2 trillion, and falling commodity prices, China is in the market for more African assets. However, there has already been a backlash against the number of mines in the continent owned by Chinese companies. Beijing will have to tread carefully as it builds up its portfolio.

Deputy President Xi’s visit to Mexico resulted in some uncharacteristically undiplomatic language. Addressing the Chinese community in Mexico City, Xi lambasted those who harp on China’s failures. Some foreigners, he said, ‘after they fill their bellies, have nothing better to do than to attack everything Chinese’. He maintained that China does not export trouble to anyone. So acerbic were Xi’s remarks that the official Chinese news agency did not carry them. Footage of Xi’s colourful remarks was quickly removed from websites.

During his visits to Venezuela, Brazil and Colombia Xi assured his hosts that China would not close its doors to their imports.

A thread which ran through the visits by Hu, Xi and Hui was the Chinese concept of the ‘new, global financial architecture’. This is code for reducing the hegemonic power of the United States and western countries in world finance. Beijing is building up its bank of goodwill in the developing world.

The first evidence of China’s ambitions will surface at the G20 summit in London in early April. Beijing is likely to demand greater influence for the developing world in the International Monetary Fund (IMF) and World Bank. It would also like to see greater regulation of the macroeconomic policies of states which provide the main reserve currencies.

‘Team China’ has seized the initiative while ‘Team Obama’ is wrestling with its economic priorities. Beijing has made it clear that it will be a tough negotiating partner. Last month it attacked Timothy Geithner, the treasury secretary, for claiming that China ‘manipulated’ the yuan in order to gain foreign trade advantages. Geithner has since backtracked and has commended the policies adopted by China to strengthen domestic demand and its ‘commitment to further currency reform’. What currency reform? Beijing has no intention of revaluing the yuan to make its goods more expensive in foreign markets.

The ‘buy America’ clause in the original $787 billion financial stimulus of the Obama Administration produced a furious reaction in Beijing. It has since been watered down.

Hillary Clinton, who has just finished her first official visit to China, was careful to stress what united the two countries and play down what divided them. Human rights, Tibet and Taiwan were put on the back burner. It was also highly significant that the new US secretary of state chose Asia as her first port of call. All other previous secretaries of state visited Europe first before going on elsewhere.

America has realised that its new world partner is China. That relationship will now have a massive impact on global politics.