Tuesday, September 29, 2015

What did President Xi’s Visit to America Accomplished?

This was first posted in Asia Times.

China’s leader, Xi Jinping has concluded his tour of America that began in Seattle, then the official State Visit at the White House in Washington and lastly at the United Nations in New York. What are we to takeaway from his historic visit?

He was greeted in Seattle with an exceptionally warm reception, not surprising since the state of Washington has been the foremost business friendly state with China. Xi in turn did not come empty handed but brought an order for 300 Boeing commercial jetliners, valued at $38 billion less whatever undisclosed discount.

Bringing a present to the host (jian mian li) is a common Chinese practice and tradition. Another of Xi’s activity that reflects the Chinese values of the person, lightly noted in the western media, was his visit to Lincoln High School in Tacoma.

Xi had been part of a delegation from the coastal city of Fuzhou that visited Tacoma and the school some 22 years ago. The two cities established sister city relations a year after that visit. His taking the time from his busy schedule to again visit the high school can’t be just for nostalgia sake but shows Xi as a sentimental leader with feelings.

He does not forget his past associations just as was the case when he visited the Iowa farm on his last U.S. visit. As a young rural official on his first visit to the U.S. some 30 years ago, Xi had stayed with a family on a farm in Muscatine Iowa.

Another interesting sidelight can be drawn from the group photo of the 30 CEOs that participated in a round table on the Internet in Seattle. There were 15 from each side of the Pacific, arrayed in three rows more or less by the market capitalization of the companies.

Somewhat unusual was the presence of Jerry Yang on the last row of the group photo. While identified as a founder of Yahoo, Jerry is currently not a CEO of any Internet company. But his Internet credentials were bolstered by his relationship with Jack Ma, Chairman of Alibaba.

When Ma’s company was young and privately held, Yahoo under Yang’s direction became a major equity stakeholder in the company.  Now Jerry sits on Jack’s board of directors and Jack stood on the front row in the group photo, two away from Xi. This may be another example of how long-term relationship counts in Chinese relations.

President Xi also did not come to the nation’s capital empty handed. Last November the surprise out of the Obama/Xi summit in Beijing was China’s commitment to join the U.S. in combating global warming and restrict emission of green house gases by 2030. The response from the western skeptics was to wait and see.

This time, Xi indicated that China was ready to stand with the U.S. by instituting a nation-wide cap and trade program by 2017 to limit CO2 emission from major industrial sources. Within one year, China has come up with a plan based on an American idea that Obama has not been able to get Congress to go along in more than four.

American presidential hopefuls should find China’s readiness to deliver on its commitment reassuring but probably wouldn’t because of deep-seated biases steeped into their heads.

Xi also pledged that China would minimize financing third world projects with high carbon emission. One observer noted, “China appears poised to enact the same climate change policy that Mr. Obama failed to move through Congress.” Someday, the world may look back and applaud the consequence of the bilateral agreement as the greatest contribution to the world’s future.

The summit also made other note worthy, though not necessarily breakthrough, progress in cyber security and repatriation of fugitives from China. In the cyber space, both countries agree on certain rules of the road and to communicate and consult with each other in the event of hack attacks. Much does lie in the details and how effectively both sides will work together rather than resort to public finger pointing.

The U.S. and China also agreed to cooperate on repatriating fugitives from China via periodic charter flights and to return ill-gotten gains. This could become a significant deterrent and cause corrupt officials to look elsewhere for safe havens overseas. American officials privately claimed that it has been the snail pace by the Chinese officials in providing the necessary documentation that impeded expediting repatriation in the past. Again, the devil will be in the implementation.

Arguably, Xi received that warmest reception at the United Nations. After his short speech pledging $2 billion for immediate deployment to alleviate the poorest, debt-ridden nations and to invest $12 billion by 2030 in the least developed regions, he was mobbed. Observers say as many as 30 other heads of state, also attending the 70th celebration of founding of UN, formed a queue to shake his hands—unprecedented to say the least.

Xi again reiterated as he has many times in the past including a recent interview with WSJ that China believes joint, universal and worldwide development as the key to avoid conflict and protect human rights by raising living standards. In the coming days, China will propose six 100-project sets to address problems of common worldwide interest. The six subject areas will consist of (1) poverty alleviation, (2) agriculture development, (3) global trade facilitation, (4) climate protection, (5) improving health care and (6) education.

As he had extended to other parts of the world, President Xi came to America offering cooperation and collaboration. His only stipulation, which China has raised since 2008 even before he became the leader, was that the U.S. treat China as a peer and strike up a new relations between “big countries” (da guo).

Judging from the body language and demeanor of the two leaders at the White House press conference, and despite the long informal meetings and after dinner strolls that have become customary, Obama and Xi showed no real personal rapport and warmth toward each other. Obama seems to have difficulty reconciling the U.S. position as the only hegemon with the need to accommodate China.

Perhaps because the U.K. has long ago given up any aspiration of being the world hegemon, George Osborne, their Chancellor of Exchequer, went to Beijing with unbridled enthusiasm for collaboration with China. Just as Xi was about to visit America, Osborne met with Premier Li Keqiang and signed 53 assorted agreements and memorandum of understandings on economic cooperation.

This was advanced work to tee up Xi’s state visit to Britain in October and ensure total success. Osborne said that his mission was to make clear that Britain wants to be China’s “best partner in the West.” Not that long ago, Britain was America’s best partner in the invasion of Iraq and shared in the disastrous consequences. Now Britain sees that it’s in their national interests to move away from the shadows of American foreign policy.

China is making friends around the world based on common economic interest and not on military alliances. While they have no wish to compete on arms, their recent air-to-air missile development with the capability comparable to the U.S. is another indication that they also won’t be intimidated. Hopefully a day will come when Washington will see more to gain from collaboration with China than competition.

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