A New World Order

When past U.S. presidents have visited China, discussions with their Chinese counterparts have been largely limited to trade and human rights. This time around, when President Barack Obama comes to Beijing, it will be different. Never has the agenda between China and the United States been so broad. The list of items that President Obama can be expected to discuss with President Hu Jintao will include everything from geopolitics to trade to global warming. What are China’s positions on these issues likely to be?

In geopolitics, President Obama will face the realities of a totally different world order than the one President Nixon dealt with when he visited China in 1972. Still under the tight grip of Mao Zedong, China was a much different country then. In the midst of a crippling Cultural Revolution, China’s economy was on the verge of collapse and the country was isolated from the outside world. In fact, one of President Nixon’s main reasons for wanting to normalize relations with the country was to drive a wedge between the Soviet Union and China, the two leaders of the communist world.

By contrast, the China of today is an economic powerhouse that is now forging its own alliances, both economic and political, and creating a sphere of influence that may at times be in competition with that of the United States and at odds with its agenda.

For example, the United States is trying to warm up its relationship with Russia, but so is China. In mid-October, Prime Minister Vladimir Putin led a high-powered delegation of more than 100 senior Russian business leaders to China in hopes of getting a bigger slice of the China market. Russia, which this year sealed Chinese oil contracts valued at $100 billion, is now negotiating an agreement that would make China Gazprom’s biggest customer for natural gas. Gazprom plans to build two gas pipelines to China that might one day deliver as much as 80 billion cubic meters annually, or more than half its current European exports. China currently buys no Russian gas.

Bilateral trade between Russia and China totaled a record $56 billion in 2008, a six-fold increase in six years, according to Russia’s Federal Customs Service.

Putin’s visit to China came on the heels of Prime Minister Wen Jiabao’s trip to North Korea, a rogue state that, along with Iran, is one of the world’s biggest trouble spots. The United States has been pushing North Korea to give up its nuclear weapons program in return for aid and diplomatic benefits. However, Washington and Beijing have very different views on the issue. Experts say that Washington believes in using pressure to influence North Korea to change its behavior, while Chinese diplomats and scholars have a much more negative view of sanctions and pressure tactics.

China’s trade and aid have become more crucial to North Korea’s survival, especially with South Korea refusing to send aid to the North during the past year and a half. Last year, trade between China and North Korea reached $2.79 billion, up 41.3 percent from 2007.

China’s support for Pyongyang ensures a friendly nation on its northeastern border, as well as provides a buffer zone between China and democratic South Korea, which is home to around twenty-nine thousand U.S. troops. This allows China to reduce its military deployment in its northeast and “focus more directly on the issue of Taiwanese independence,” according to Shen Dingli of the Institute of International Studies at Fudan University in Shanghai. “North Korea’s allegiance is important to Beijing as a bulwark against U.S. military dominance of the region as well as against the rise of Japan’s military.”

Many believe that Prime Minister Wen’s trip to North Korea had more to do with ensuring stability than it did with getting North Korea back to the negotiating table. “The results of Wen Jiabao’s trip show that China’s foremost concern is to secure stability in North Korea,” said Han Suk-hee,  an expert on Chinese-North Korean relations at the Graduate School of International Studies at Yonsei University in Seoul. “The deals they signed are aimed at ensuring stability in North Korea even after Kim Jong-il is gone. China effectively announced that it did not agree with the United States and South Korea on sanctions against North Korea.”

Iran is another trouble spot where the interests of China and the United States diverge. While the United States has neither an economic nor a political relationship with Iran, China has both. In Iran, China has a permanent partner for its exports as well as a source for its growing energy demand.

In 2004, Zhuhai Zhenrong Corporation, a Chinese state-run company, signed a 25-year contract to import 110 million metric tons of Liquefied Natural Gas (LNG) from Iran. That deal was followed by another contract between Sinopec and Iran LNG, worth $100 billion, that adds an extra 250 million tons of LNG to China’s energy supply to be extracted over a 25-year period. Iran is currently China’s third largest supplier of crude, providing China with roughly 12 percent of its total annual oil consumption.Trade exchanges between Iran and China exceeded $25 billion in 2008.

The economic and political relationships that China has with Russia, North Korea and Iran will greatly complicate the discussions between the two presidents. For the United States, forcing Iran and North Korea to give up their nuclear ambitions is a priority. Getting China and Russia to support this effort may be problematic.

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