US honors Dalai Lama amid protest (2)

08:49, February 21, 2010      

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China's shedding of US government bonds, though carried out before the recent disputes, also invited speculation that Beijing is using its financial muscle to send a warning signal to Washington. Figures published this week show that China sold $34 billion worth of US treasuries in December and is no longer its largest overseas creditor.

A guest blogger wrote on Friday's Christian Science Monitor, "Decisions of foreign leaders aren't driven by budget finances alone: continued arms sales to Taiwan, free-speech issues raised by Google and others, and unhappiness with currency valuation, could all come into play."

Still, more conflicts are inevitable. Reuters on Thursday listed several main sources of tension between China and the US: currency and debt, trade and investment, diplomatic and military influ-ence, and Internet freedoms.

"With the two giant nations joined at the hip economically, Sino-US tensions are unlikely to escalate into outright confrontation, but could make cooperating on global economic and security issues all the more difficult," the report said.

The next big test comes in April, when, under the Omnibus Trade and Competitiveness Act of 1988, the US will decide whether to label Beijing a "currency manipulator"-- no country has been named since 1994.

Such a move technically wouldn't result in any US actions against China. But invoking the rarely used act would likely infuriate Beijing and give Congress new ammunition to press for concrete action against China, the Wall Street Journal reported.

The New York Times (NYT) reported Saturday that American officials say the rift in US-China relations has arisen in part because the two countries have completely different items at the top of their foreign policy agendas and are talking past each other.

"There's not a lot of overlap in the Venn diagram. What's really the most worrisome is the degree to which we have that disconnect," an anonymous US official involved in China policy was quoted as saying.

An opinion in the NYT published Tuesday saw the tension in a different way, arguing that "the sudden worsening of ties between Beijing and Washington really means that US-China relations are returning to 'normalcy,'" because of the deep and unbridgeable differences between the two countries in many areas.

Fears of a qualitative deterioration and eventually a full-fledged rivalry between the two countries are overblown, in the same way that recent talks of a close-knit US-China strategic partnership were premature and naïve, the NYT opinion piece said.

Yuan Peng, a researcher at the China Institutes of Contemporary International Relations, told the Global Times that disputes between the US and China have a positive meaning.

"They can help us to have a clear picture of the cooperation and the conflicts. Fighting without breaking up characterizes China-US relations," Yuan said.

Source: Global Times
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