When China’s president, Hu Jintao, visits Washington this week, discussions will inevitably focus on money rather than grand strategy.
Washington keeps pressing Beijing to raise the value of its controlled currency, the Yuan. The Chinese have so far refused more than minor increases totaling about 6%, insisting a low Yuan is essential to keep China’s export economy booming and to raise living standards.

Nervous Chinese officials are expressing deep concern over the safety of the billions worth of US securities held by China and investments in America. Washington has been steadily engineering the devaluation of the US dollar by printing money, a process known under the euphemism of “quantitative easing,” and by keeping interest rates artificially low.

China has a lot to worry about. Most economists and money men foresee a much lower US dollar in 2011, perhaps by as much as 10%. Washington is reducing its huge debts to China by devaluing its money.

How long will Beijing hold on to sharply depreciating securities? Perhaps a long time. China seems to have little choice: the alternatives are the Euro and Yen, both suffering their own woes.

President Hu will also face intense annoyance in Washington over China’s arms buildup and claims by American conservatives that China increasingly threatens its Asian neighbors and the United States.

China has indeed been modernizing its military, particularly its air and naval forces, transforming its former coastal, brown-water navy into a true blue-water fleet. But China has also decreased the size of its 1.6 million-man army to pay for modernization and mechanization.

So is China a military threat? Yes, theoretically, to Taiwan and Vietnam. But not to the rest of Asia, and certainly not to the United States, which spends ten times more than China on the military.

China continues to follow the cautious foreign policy advocated by its brilliant former leader, Deng Xioping: build economic power and avoid frightening the world.

Critics say this is merely a ploy to mask China’s domineering ambitions. But history and current Chinese thinking suggest otherwise.

Even China’s most radical and often bloodthirsty leader, Mao Zedong, did not advocate territorial expansion except to “liberate ” former parts of China: Tibet, Sinkiang, Taiwan. China fought short border wars with India and Vietnam, but withdrew after “teaching them a lesson.”

Throughout its history, China has generally preferred to accept the obedience, submission and deference of neighbor states rather than occupying them. Vast areas of China, mostly arid or mountainous, remain uninhabited even today. Expansion is not a priority.

China has settled its outstanding border disputes with Russia, though it does have serious, unresolved ones in the Eastern Himalayas with India. Meanwhile, China is boldly expanding its political and economic influence in Central and South Asia, but not, so far, military capabilities.

If China’s land borders are largely fixed, its sphere of maritime influence remains unresolved and of growing concern to its Asian neighbors and the United States, which considers the Pacific Ocean an American preserve.

China’s growing dependence on Mideast oil requires it to develop powerful, long-ranged naval forces, backed by naval aviation, to protect its oil routes. In effect, China is starting to echo similar American claims about the need to safeguard its maritime trade.

None of this yet means Chinese armies are on the march, just a rising great power flexing its economic muscles.

It is essential to avoid militarizing US-Chinese relations and putting them in context of former Cold War rivalry – though Washington’s national security establishment that would like to do just this and redefine China as an inevitable threat to the United States.

These hardliners (and I used to be one – I even have a Pentagon certificate hailing me as a “cold warrior”) are making precisely the same error that Britain’s German-hating Imperialists made before World War I, demonizing a commercial competitor into a demon that had to be destroyed at all costs.

The British Empire destroyed itself by fighting Germany in two world wars. Hopefully, the United States will be more far-sighted, cautious, and generous in dealing with rising China – and China will keep following Deng’s excellent advice.

Sino-American relations must be led by diplomats; they are far too important to be left to generals and admirals.

This post is in: International Politics

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