The positions of the United States as a world superpower No.1 for a variety of parameters severely shaken, with a markedly increased influence of emerging powers – China, which has not missed a moment to take advantage of the current situation in the world. These trends have forced the new administration to revise U.S. foreign policy priorities and create new strategies, especially in regard to China. Washington for the first time recognizes Beijing's status of one of the major power and offers a new format of cooperation "from rivals – to allies." Many analysts are inclined to believe that the American proposal format G2 is the beginning of forming a new bipolar world order.

Obama’s visit to China

On November 15-18 this year U.S. President Barack Obama paid a state visit to China, which has become the most significant in the entire Asian tour of the American leader. The visit also was a landmark because it is the first official visit of B.Obama as president of the United States to China, but also because no U.S. president has visited China during the first year of his presidency.

It is noteworthy that the leadership of the White House has made every effort in order to create the most favorable conditions for the success of Sino-American Summit. So, Barack Obama refused official meeting with the Tibetan spiritual leader the Dalai Lama, who sought an audience with the President of the United States for 2 months before the visit. According to The Weekly Standard, since 1991, all previous U.S. presidents formally met with the Dalai Lama despite protests from Beijing, who accused the White House in support of Tibetan separatists. The AFP agency has concluded that on the eve of his visit to China Obama has decided not to spoil relations with Beijing just for financial reasons. President of the United States limited appeal to Beijing to resume talks with the Dalai Lama. These steps of American diplomacy, as well as much more moderate tone of American leaders have been favorably received in Beijing.

During his stay in China, Barack Obama held talks with President Hu Jintao and Premier Wen Jiabao, met with Chinese students in Shanghai. The two presidents exchanged in-depth views on Sino-U.S. relations. It is important to note that during the negotiations, despite the existence of serious problems in bilateral economic and trade relations, the U.S. side makes no claim, much less tried to put pressure on the Chinese side, which was typical of previous meetings of heads of the United States and China. At this time the U.S. side expressed in the form of appeals and proposals.

Barack Obama has tried to persuade Chinese leaders to reduce the customs duties to at least to lift a little the veil that separates Chinese market from U.S. goods. In addition, he asked to liberalize the exchange rate of RMB, which continues to become cheaper against other world currencies, that extremely beneficial to the Chinese exports and the country itself. The United States believes China's currency is one of the main causes of troubles of American and world economies. Later the same day at a hearing of Congress in Washington, Treasury Secretary Timothy Geithner repeatedly voiced wish list of America to the Chinese economic policy.

However, Beijing has taken a tough stance on foreign exchange regulation, not agreeing with the arguments of Washington. In particular, Hu Jintao made it clear that the cause of troubles of the world economy is considered by Beijing as not connected to low rate of RMB, but as protectionist barriers to Chinese goods, especially in the creation of which succeeded the United States. As you know, recently, the Obama administration decided to raise duties on Chinese tires and steel tubes, to which Beijing responded immediately by anti-dumping investigations against exports of U.S. chicken and spare parts. As a result, the U.S. and China turned out on the brink of a trade war on the eve of Obama's visit to China.

The United States blames China's in formation of a huge trade deficit. U.S. trade deficit in September 2009 increased by $ 5.7 billion, or 18%, to $ 36.5 billion. The growth of trade deficit was most significant in the last 10 years. Last year, the cumulative trade deficit reached $ 523.9 billion. Thus, the largest deficit recorded with China – $ 22.1 billion.

At the same time, China at present is the largest creditor of the U.S., the foreign debt of which is about $ 1 trillion and continues to grow. If we suppose that China will sell its existing U.S. Treasury bonds, all plans for the salvation of the U.S. economy fall off, because they will not take money from anyone. Other investors are likely to follow the example of China and also will sell American bonds. Washington will have two options – or a catastrophic devaluation of the dollar, or default. Moreover, default may be in this situation less adverse effects than uncontrolled devaluation.

Some analysts believe that next year Americans will be much harder to borrow money in the debt market. Private and institutional investors are already invested all their money in U.S. bonds. Traditional lenders of the United States – China, Japan, South Korea, Taiwan, Russia and the Gulf states – are experiencing their own difficulties and unlikely to buy American bonds even if they wanted. And this in turn would create pressure on the U.S. bond market, irrespective of whether China will deliberately throw debt securities or not.

Another aspect of the differences between the two countries in the financial sector is the fact that against a background of the weakening U.S. economy we can observe the growing influence of the Chinese currency in the region. China is actively promoting monetary and financial integration in Southeast Asia, the core of which is positioned "gold yuan". According to many experts, the Chinese yuan has every opportunity to become a regional currency in Asia. Deputy Director of the Institute of USA and Canada V.Kremenyuk believes that this prospect of serious concern to the United States. Since monetary and financial dominance of China in the Asia-Pacific challenge U.S. strategic interests in the region.

Turning to international security issues, Hu Jintao and Barack Obama discussed the situation around the nuclear programs of North Korea and Iran. U.S. President tried to convince his Chinese counterpart to a more severe pressure on Pyongyang and Tehran to curb its nuclear ambitions. However, Barack Obama calls for the introduction of international sanctions against Iran were not supported by China. Hu promised only to work harder to solve these problems. The Chinese leader made it clear that he would like to see the resolution of these issues before Washington will require more severe sanctions in the UN Security Council.

So, after negotiations, the parties agreed to facilitate the return of North Korea to Six-Party Talks to make the Korean Peninsula nuclear-free zone. On Iran, it was agreed that the Islamic Republic of Iran (IRI), should provide the international community with the evidence that its nuclear program is peaceful and transparent.

It is important to note that Beijing remains the only permanent member of UN Security Council, not allowing the possibility of sanctions against Tehran and Pyongyang. China, which has strategic interests in North Korea and the IRI, will not allow the imposition of severe sanctions and especially the use of military force against these states. In this case, the status of a mediator in the resolution of these problems contributes to raise the international status and influence of China.

However, it should be noted that for Beijing the North Korean problem is a higher priority than the Iranian nuclear program, as directly affects the security of China. The same opinion has Minhin Pei, expert from the Carnegie Endowment, who believes that at present China's leaders have chosen a pragmatic strategy: they would cooperate with the United States in areas where their interests converge, such as reducing the power of North Korean nuclear program to its previous level. But on issues where their interests do not converge – such as the decision of frozen relations between the West and Iran – China reticent to assist. In this regard, we can suppose that in early 2010 we should see some progress towards improving the situation around the problems of the Korean peninsula.

Noteworthy was the fact that during the Sino-US summit talks did not come up the traditional issue of regional security – Taiwan. The U.S. president just said that the United States recognize and respect the sovereignty and territorial integrity of China on the Taiwan issue and do not intend to interfere in its key interests.

However, China and the U.S. had reached a compromise regarding the need for more active participation in addressing climate change. During the talks, Hu said that climate change is a serious challenge to all mankind, and China is ready to work with the U.S. actively and constructively approach to participate in international negotiations on climate change and thereby contribute to the promotion of positive results at the Forum in Copenhagen.

It is noteworthy that Beijing had not previously agreed to the proposal to participate in programs to reduce emissions, arguing that the PRC needed more economic growth and poverty reduction. According to the Chinese authorities, environmental problems must be solved primarily by developed countries - by reducing emissions and provide economic aid and technology to developing countries suffering from global warming.

Besides, the U.S. and China signed a major agreement on joint development of electric vehicles. Contract amount is $ 150 million given the popularity of environmental themes in the West, this agreement has caused a wide resonance among the large pool of journalists.

Perspectives of Sino-U.S. relations and G2

Sino-US relations certainly go to a qualitatively new stage in its development. First of all, this is connected with the advent of the new White House administration, headed by Democrat Barack Obama, who has made some adjustments to the priorities of U.S. foreign policy. In addition, the world economic and financial crisis increased the dependence of the U.S. economy on China. These circumstances formed the new format of the Sino-U.S. cooperation "from the opponent - to allies, which is more dictated by the need from Washington.

Zbigniew Brzezinski: "My secret trip to China in 1978 on the orders of President Jimmy Carter eventually led to the normalization of Sino-US relations. Since then, the collaboration began in the area of security, which benefited both countries. The effect of this made a change in the global Cold War, putting the Soviet Union in a disadvantageous position on the world chessboard.

The U.S. president made a landmark visit to China in order to declare this qualitatively new approach in Washington to a third world economy. Barack Obama in Shanghai officially declared: "The notion that we are destined to be rivals is not something providential" adding that Washington is not going to contain growing Chinese power. It is important to emphasize that the idea of containment of Communist China remained a major foreign policy principles of successive U.S. administrations.

The key point was the statement by the head of the White House, which called on China to share with the U.S. "the burden of leadership." Barack Obama became the first American president, has spoken of the PRC in this way. He said the U.S. hopes that China will play a more important role in international affairs. Obama also pointed to the importance of strengthening inter-state dialogue and consultation, the deployment of effective cooperation in economy and security, regional and global issues. American experts have pointed out that now when a lot of that is under threat, the Sino-U.S. relations have never been so close and important. Professor of Chinese politics at the University of California, Richard Baum considers this as a paradox.

In early 2009, influential American political scientist Zbigniew Brzezinski, who was an adviser to Barack Obama on foreign policy during the presidential election campaign, suggested that the U.S. and China to create G2. In his view, this new format of a geopolitical nature of bilateral relations must be established along the lines of Washington's relations with Europe and Japan. As pointed out by Zbigniew Brzezinski, the leaders of China and the United States must also meet in an informal setting to discuss not only bilateral relations but also global policy issues. The basis for such negotiations, in his opinion, may be China's strategy of gradual, peaceful increase its influence in the world and participate in solving global problems and conflicts.

Therefore, it is obvious that the current U.S. administration will continue to move in the direction of deepening U.S.-China dialogue in the format of G2. However, it is interesting to consider China's position on this issue.

On the one hand, Beijing intends to and will conduct multi-vector policy in the international arena towards multipolarity. But on the other hand, China does not want to assume full responsibility and share the "burden of leadership" in the world. Because China is aware that there still exist many internal problems to be solved before to get involved in "big game".

This explains the rather cool reaction of China to the proposal from the United States. Beijing is fully aware that Washington is doing so, primarily on the basis of their own interests. Because of this, some Chinese analysts with a certain distrust of the attempts to put China on top of the pyramid of the world: giving it such a "benefit", they are primarily seeking a greater involvement of China in solving some global issues, and this, analysts say, is very dangerous due to the high costs and effort that burden will fall on their country. It can be assumed that now for Beijing is enough that the United States and the international community aware of the role and importance of China in global affairs.

For example, Premier Wen Jiabao during his meeting with Barack Obama with satisfaction said that the United States and China today – two countries that have the greatest influence on world politics, but the said the U.S. president: China will not agree with the idea of G2 . He explained that the Asian Tiger "is still a developing country with huge population which have a long way in order to become a modernized state." The Chinese premier also noted that his country prefers to pursue the independent foreign policy and does not intend to enter into an alliance with another country or group of countries. But the global challenges "must be addressed by all nations of the world, rather than one or two countries."

Analyzing the statements of Chinese leaders, we can conclude that the main characteristics of the diplomatic and political efforts of the PRC continues to be prudent and consistency. As recently emphasized by a Chinese professor "our country must continue to move forward, building on their own capabilities and clearly thinking through the steps to be taken in this direction." The Chinese understand that the concept of the G2 is unwound from the American side to force China to act on the U.S. rules in the field of finance and trade.

In 2008 the economy of China took 3rd place in the world on largest nominal GDP ($ 4.402 trillion) and 2nd place on the GDP calculated by purchasing power parity.

However, in the future, we can assume the possibility of closer political cooperation between the U.S. and China in the format G2. History has precedents, when the strongest powers given priority to cooperation over confrontation. In the first half of XX century the British Empire, still constitute a huge influence, did not oppose strengthening the United States, but rather in an alliance with them has won both world wars. British politicians asked this question – how can a small island nation is infinitely control the world? And they came to the answer – nothing. Therefore, it was decided not to deter the growth of U.S. influence.

But at the same time, it is worth remembering that today the alliance between the U.S. and China is just a hypothetical perspective. Now we can not talk about Sino-U.S. rapprochement. The next meeting of the U.S.-China high-level will take place in summer 2010, when held a second round of U.S.-China Strategic Economic Dialogue, which in the future could become a launching pad for a closer cooperation between Beijing and Washington to address global issues.

China and U.S. in Central Asia

After the collapse of the Soviet Union, the interests of China and the United States clashed in Central Asia, countries which have a large resource, economic and intellectual potential, and the region as a whole has a geo-strategic and geopolitical importance.

China marked the region of Central Asia as a zone of economic interests, which are concentrated in three main directions. The first, an interest in Central Asian hydrocarbons and their delivery to the Chinese market. In 2005, China launched pipeline Atasu-Alashankou for the supply of Kazakh oil, and in December 2009  Central Asia-China gas pipeline to supply Turkmen and Uzbek gas in the future. Second, promotion of Chinese goods and services in capacious market of the Central Asian. In recent years, are rapidly growing volumes of trade between the Central Asian states and China, Chinese investment spread almost to all industries. Third – the migration of Chinese labor and the establishment of diaspora.

For the United States Central Asia is a region of geostrategic significance, since it is located near the borders of Russia and China. Moreover, in the current context of combating terrorism and the military campaign in Afghanistan, the Americans consider Central Asia as a basis for conducting their military operations. After numerous attacks by the Taliban in the southern supply routes of U.S. military and nonmilitary cargo to Afghanistan via Pakistan in Washington are thinking about alternative routes through Central Asia, primarily through Uzbekistan. Because this country has the largest transportation and transit potential, possesses the capacity of rail, road, river and air communications with Afghanistan. For that, recently started the construction of railway Termez – Hairatan – Mazar-i-Sharif. In the Uzbek city of Navoi created multi-modal airway hub with the center of international logistics. Thus, the Central Asian countries play an important role in ensuring security and economic reconstruction of Afghanistan.

At first glance, the interests of China and the United States in Central Asia have a different focus. Beijing gives priority to economic interests and Washington on security issues. However, it is important to note that both countries claim some leadership in this region. China, as a mechanism for interaction with Central Asian countries has initiated the establishment of the Shanghai Cooperation Organization, which caused some concern in the United States. U.S. strengthens its presence in the region by opening military and transit bases, as well as increased activities of their NGOs, which in turn raises concerns in China.

At the same time, Washington and Beijing are faced with historical interests of Russia in Central Asia, which also increases the competition for influence in this region. In addition, under the ongoing crisis, the financial markets of Central Asia becomes an object for promotion of regional currencies. Recently, Chinese Export-Import Bank offered to Central Asian countries relatively open financial markets in order to establish a regional mechanism and control standards in the banking, stock and insurance fields. Such trends as a whole damage the international standing of the dollar and the interests of the United States.

In this regard, it should be noted that both China and the U.S. in the first place should be interested in ensuring stability in Central Asia. Beijing and Washington should develop a clear mechanism of interaction in this region, on the one hand takes into account the interests of both countries, and on the other eliminates the potential for conflict. Thus, the deputy director of the Institute of USA and Canada V.Kremenyuk stresses that the United States must cooperate more closely with China in Central Asia and Afghanistan.

Conclusion

Summarizing, we can conclude that the trends in development of U.S. and China in recent years have created an environment in which a review of approaches to bilateral relations became an objective necessity. However, the impetus to qualitative changes in Sino-U.S. relations has become a world financial and economic crisis. In this case, it should be noted that a review of foreign policy priorities, happens only in Washington, while in Beijing at this moment do not see a need to change the format of bilateral cooperation, for example in the form of G2. This is explained by the fact that under the circumstances and in the future post-crisis world, the U.S. will need more in China than vice versa. President Obama, for whom it is vital to ensure economic stability in the country, is well aware of the role of China.

Analyzing the visit of American leader to China, we concluded that no doubt it had important to the future development of Sino-U.S. relations. As the head of the department of East Asian policy of the U.S. National Security John Beyder, the trip was successful, but he described it as merely "an important first step." However, this was the first visit of American president, where he not played first violin, and the Chinese leadership knows this. In coming years, U.S. will face a lot of problem and they struggle to come to an agreement with the Asian superpower, which is becoming more assertive.

But, at the same time it is important to note that the status of China as the largest U.S. lender, and the engine of world economic recovery continues to strengthen interdependency between the economic systems of the two countries. Chinese economy's dependence on exports to the United States, from American high-tech, as well as financial and exchange markets remains too strong. China is still interested in the financial and economic stability in the United States, including the dollar.

Concerning the prospects of establishing G2 mechanism it can be noted that de facto, Beijing and Washington have already played a crucial role in global affairs, from international security issues (Iran, North Korea) to the problems of the world economy. At the same time, de jure between China and the United States has not yet formed an institutional framework for regular meetings in the format of G2, since China is not yet ready for this turn of events on the world stage. However, we can assume that the newly established mechanisms of Strategic Dialogue in future may become a platform to address not only bilateral, but also to global problems.

Ashraf Khodjaev, Ph.D.
Expert of the Center for Political Studies