The main theme that emerged out of U.S. Vice President Joseph Biden's nearly six-day visit to China that started on Wednesday is rather prosaic. Biden could have focused on the sale of jet fighters to Taiwan and China's acquisition of an aircraft-carrier fleet in the near future. He could have spoken about many other things, and he probably will. But as it turned out, the main issue of his current visit, the point that their discussion centered around, is money. And this is what is compelling the two powers towards peace and cooperation
Meet Mr Xi
The tone of the visit was set during the talks between Biden and his Chinese counterpart Xi Jinping on Thursday morning. "Under the new circumstances, China and the United States...are co-shouldering more common responsibilities," Jinping said. "Our commitment to establishing a close and a serious relationship with the people of China is of the upmost importance to my country," said Biden.
The new circumstances include a persistent global economic downturn that is far from over. Therefore on the eve of the talks in Beijing, Biden said, "I am absolutely confident that the economic stability of the world rests in no small part on cooperation between the United States and China."
The official reason for China's invitation to Biden, the second man in charge in the United States, was the meeting with Jinping, his counterpart and the second man in charge in China, who will almost certainly succeed President Hu Jintao next year.
Biden and Xi will spend almost all of their time together. They will both visit the Sichuan Province, where Biden will make a policy speech on China-U.S. relations at a university in its capital, Chengdu. This process will essentially be replicated at the end of the year, with Xi paying a visit to Washington.
The year 2012 will see a vast change in leadership in many countries. In China, this change has been quite predictable lately. There is less confidence as to the future leader of the United States.
Those who know something about Jinping seem to like him. He is very different from the reserved and somewhat static Hu Jintao. He is a good manager (he doesn't like too much talk and prefers resolving problems immediately), and an excellent speaker. At one time, Jinping, under a pen-name, wrote some columns for a provincial newspaper in Zhejiang, where he was the governor. In general, he is an interesting man. Moreover, he has not yet had lengthy meetings with any U.S. leaders.
A formula for relations
Within the U.S. administration Biden is responsible, among other things, for strategic decision-making. With regard to China, there is a demand for a new strategy.
The beginning of the Obama administration was marked by U.S. proposals for joint leadership of the world with China. Washington diplomats took offense at the cool response they received and made an about-face, adopting a tough policy towards China and focusing on consolidating military ties with old and new friends near the Chinese borders. The two countries nearly quarreled.
But at the beginning of this year they started to make peace, attempting to shift towards a more tranquil formula in their relations. No doubt Biden, ever the strategist, came to China to draft this formula with an eye to the future.
In this sense, Biden's speech before Chinese students is unlikely to produce many results. It's possible that his target audience would rather be American voters. At this point, the current U.S. administration is facing the same problems as in its relations with Russia. American politicians are engaged in heated internal debates, and many of them cannot escape from the realities of a bygone era, and behave as if the U.S. had become the world's only superpower. This is why it is not always easy to tell the difference between a real course and mere rhetoric in U.S. foreign policy.
Washington is by no means shaping its future China policy around that recent incident when Obama refused to supply Taiwan with fighters - opting instead to upgrade the country's aging jets (a scenario which left all sides discontented). Nor does is it in any way related to with China's aircraft-carrier activity (On August 10, the former Soviet ship, the Varyag, made a sea voyage and came back for some finishing touches).
The subject here is entirely different. It turns out that Biden came to China in order to reassure the Chinese about the credit solvency of the U.S. This is an unusual situation, perhaps even unpleasant to some, but completely understandable.
In fact, the visit's focus - money - became clear roughly a week ahead of today's talks. Leaks from the U.S. Administration and expert policy studies have been increasingly concerned with the financial issue. In China, it has been exactly the same.
The United States must abstain..."
In general, China attitude towards the United States is that of an unhappy investor and creditor, which is quite accurate. On the day of Biden's arrival, the Chinese media published some surprising data: Beijing has continued to buy U.S. debt obligation bonds, to the tune of $7.6 billion in April, $7.3 billion in May and $5.7 billion in June. The United States currently owes $1.17 trillion to China.
The two countries discussed this issue at the beginning of the year at the top level, against the background of Beijing's usual talk about the need to put an end to the dollar monopoly in the world financial system. But it doesn't matter what they say. It matters what they do and what they buy.
In early August Obama clashed with Republicans on the debt issue, which nearly triggered a second wave in the crisis. Many former agreements went out the window, including international agreements.
Now, on top of everything, the United States has started talking about potentially launching a third QE (Quantitative Easing) program, which would allow the U.S. Federal Reserve System (FRS) to buy out American obligations.
China is afraid that by injecting money into the economy like this, the FRS will raise prices on many types of raw materials and goods and will devaluate the dollar, thereby making the $1.17 trillion in bonds that belong to China slightly less valuable.
According to Chinese Central Bank Chairman Xiao Gang, "The United States must abstain from QE and toughen its monetary policy in order to strengthen the world's faith in the dollar." Should it abstain? This is certainly a shareholder speaking... And the duty of responding to this shareholder, in this case, falls to Biden.
The views expressed in this article are the author's and may not necessarily represent those of RIA Novosti.
