As U.S. officials begin visit to Beijing, relations are 'sound,' China says

The Washington Post

At a time of tension in U.S.-China relations, a three-day visit by senior U.S. officials to Beijing began on Monday with signs that Chinese leaders want to smooth over some key frictions.

"Sound" and "stable" was how a top Communist Party official described the two countries' relationship while receiving the U.S. delegation, which included National Economic Council Director Lawrence Summers and deputy national security adviser Thomas Donilon.

The meeting comes at a tense period in the U.S.-China relationship, which has been battered on several fronts. The United States has continued its fight with China over China's trade surplus and currency valuation, with little to show for its arguments in the past few months. U.S.-South Korea military exercises near the coast of China have incensed Chinese officials, as did President Obama's meeting with the exiled Tibetan spiritual leader the Dalai Lama and a U.S. arms sale to Taiwan, both of which happened earlier this year.

Rhetoric on both sides has ratcheted up in recent weeks on national security issues - with China's state-owned party papers denouncing U.S. interference in South China Sea issues, and Secretary of State Hillary Rodham Clinton responding in July at an ASEAN meeting that that area is part of her country's "national interest," which of course set off more fuming in party papers.

On Monday, both sides expressed hope that a flurry of meetings between U.S. and Chinese officials that are scheduled in coming weeks may help to thaw some of the recent difficulties.

"Although there were some disturbances in China-U.S. relations, in April and May after President Obama and President Hu Jintao had two meetings, our relations have gotten back on a sound track," said Li Yuanchao, head of the section in the Chinese government that oversees senior party appointments, before the closed-door talks began.

Summers later Monday told Vice Premier Wang Qishan that Obama "has emphasized for us the importance he attaches to a very strong relationship between the United Sates and China." Among this visit's top issues, Summers added, is setting up a visit to Washington by Hu.

Still to come in the next few busy months are China Premier Wen Jiabao's visit in a few weeks to the United Nations General Assembly in New York, a meeting of the U.S.-China Joint Commission on Commerce and Trade and the G-20 summit, where additional China-U.S. talks may occur. All of which will be capped off with a visit by Hu's visit, likely to occur in January.

Some of the most pressing issues facing both sides in this week's meetings involve the Korean Peninsula, said Shi Yinhong, an international studies professor at Beijing's Renmin University. There have been icy feelings all around, he said, since the Cheonan - a ship from U.S. ally South Korea - was sunken near the border of China's ally North Korean.

"Neither China nor the U.S. wants to make concession on this," Shi said, "but the two countries also don't seem to want the relationship to deteriorate again."

Also likely to be much discussed in this week's visit is the yuan exchange rate. After much U.S. pressure, China announced in June a change to its currency policy, untying the yuan from its peg to the U.S. dollar that critics said kept the yuan undervalued and hence made Chinese exports inexpensive. But despite promises of a more flexible exchange rate, the yuan has risen a mere 0.6 percent, disappointing officials in Washington.

With the midterm elections approaching and the economy looking like a chief topic, pressure is growing in Washington to make progress on the issue of China currency and trade. Sen. Charles E. Schumer (D-N.Y.) and others on Capitol Hill are threatening to push legislation this fall that would increase tariffs on Chinese imports.

But it's unclear whether more pressure and talk in the days and weeks ahead will change anything on the economic side.

"In the eyes of the Chinese, American economists are obsessed with this exchange rate. That's all they want to talk about when they visit," said Andy Xie, a Shanghai-based economist. "But it's more complicated than that. Given what's happened so far, I seriously doubt any major change will come from these talks. Even if China's exchange rate goes up, it won't be by a lot."