China Seeks To Soothe U.S. Fears Over Its Growing Clout

by Antoaneta Bezlova

(IPS) BEIJING -- As President Hu Jintao prepares to visit the United States this week, Beijing has been working overtime to assuage U.S. concerns over China's growing military power, leverage in the global economy and regional clout.

In recent days, dignitaries and senior Chinese politicians have taken turns emphasizing that China's spectacular rise on the world stage should not be regarded as an economic or military threat, but as an enormous opportunity.

The renewed publicity push to burnish China's image comes as Beijing feels frustrated that having revalued its currency, the yuan, and making other positive moves to appease China's critics in the U.S, it has failed to disarm opposition, particularly in the U.S. Congress.

Speaking at the Canada China Business Council in Toronto last weekend, Hu said China's development has provided other countries with a broad market of 1.3 billion people. Look at China as a tremendous commercial opportunity, the president told his hosts.

At the United Nations, last week, top Chinese legislator Wu Banguo addressed U.S. and Japanese concerns about China's rising defense spending by pledging that "China will unswervingly stick to the road of peaceful development."

"The Chinese are a peace-loving nation and China is a responsible member of the international community," Wu said at the second world conference of Speakers of Parliaments, held at the UN headquarters in New York.

Former U.S. President Bill Clinton, for his part, has expressed hope that despite difficulties in the complex U.S.-China relationship, it would remain one of the most important bilateral ties of the 21st century and should be handled accordingly. Clinton was in China last week attending a China Internet Summit sponsored by Alibaba.Com, one of China's key e-commerce companies.

Clinton's remarks came amid a wave of anti-China sentiments in Washington. U.S. politicians and business leaders are blaming China for a host of ills, including the deteriorating trade deficit, the declining textiles industry, and growing joblessness in parts of the country.

Defense planners in the U.S. contend that China's military development, with its large defense spending, posed a threat to Washington's strategic interests in the Asia-Pacific region.

Hostilities boiled over in the summer when, after months of protests from U.S. politicians, the China National Offshore Oil Corporation (CNOOC) had to withdraw its $18.5 billion bid for Unocal, a U.S. oil major. CNOOC's decision came just two weeks after Haier, a Chinese white goods manufacturer, pulled out of the race to buy U.S. company Maytag.

The two failed acquisitions, however, failed to defuse U.S. concerns that China was attempting to "buy up America." Now, the influential U.S.-China Economic and Security Review Commission has raised the specter that a "stampede" of Chinese companies listing shares in the U.S. may destabilize the country's financial markets.

From Beijing's point of view, U.S. antagonism is unfounded, particularly because since the beginning of summer, China has pursued a broad policy of building bridges with Washington.

Laying the groundwork for Hu's first visit to the U.S. since he became head of state in 2003, Beijing has made calculated moves aimed at easing tensions, both economically and politically.

In July, Beijing ended the peg of the Chinese yuan to the U.S. dollar and revalued the currency by 2 percent -- a move aimed at countering criticism by the Bush administration and U.S. business leaders that China had resorted to currency manipulation to make its goods cheaper in the U.S. market.

Beijing also joined the U.S. in the new Asia-Pacific Partnership on Development, along with Japan, India, Australia and South Korea, as an alternative route to the Kyoto Protocol on global warning.

China sees the new U.S. initiative as conducive to both U.S. and Chinese interests as it would allow for plans to build power plants, without being inhibited by Kyoto's boundaries.

On the worsening U.S. trade deficit with China (last year it reached a record $162 billion), Chinese economists point to Beijing having used the surplus to buy American government bonds. This, in turn, has lessened budget deficits, kept interest rates low and contributed to a housing boom that fueled much consumer spending in recent years.

"The U.S. trade deficit with China benefits U.S. consumers as well as the U.S. economy," argues Xiao Lian from the Institute of World Economics and Politics, under the Chinese Academy of Social Sciences. "No trade deficit with China means the U.S. may have to import the same products from other countries at higher prices."

Politically, Beijing counts on getting credit in Washington, for using its influence with the reclusive regime of North Korea, to resume the six-party nuclear talks and for efforts in the hunt for al-Qaeda terrorists through its partners in Central Asia.

Having made moves designed to look positive, Beijing is expected to argue that the Bush administration should not single out China for negative treatment.

The original plan for Hu's visit to the U.S, featuring a visit to the White House, a speech at Yale University and meetings with business people in Seattle, was canceled so President Bush could deal with the aftermath of Hurricane Katrina.

The two presidents are now due to meet on the sidelines of the United Nations summit in New York on Sept.16, marking the 60th anniversary of the body's formation.