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US International Relations

US-China Relations

Project: US International Relations
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President Bush misstates US foreign policy when he says that the US will do “whatever it took to help Taiwan defend herself” in the event of attack by China. Since the Reagan administration, the US government has conducted what it calls a “One-China” policy, agreeing with the Chinese position that Taiwan is a breakaway province of China yet attempting to walk a fine line between the two contentious nations through tacit recognition of the island nation, and regular arms and economic aid packages. Taiwan insists it is a separate nation, while China regards Taiwan as a renegade province that is part of China proper. The US also announces a major arms sales package for Taiwan. The Chinese continue to detain a US surveillance plane downed in a midair collision with a Chinese fighter jet (see March 31, 2001), another source of strain between the US and China. Publicly, White House officials such as press secretary Ari Fleischer say that Bush’s comments about defending Taiwan from Chinese attack are consistent with US policy, but privately, officials scramble to mollify outraged Chinese government officials. [United Press International, 4/26/2001; International Herald Tribune, 4/30/2001] Later in the day, Bush hedges his earlier comments, saying that his statement does not reflect a change in official US policies towards China and Taiwan. “Our nation will help Taiwan defend itself,” Bush says “At the same time, we support the one-China policy, and we expect the dispute to be resolved peacefully.” Bush says any declaration of Taiwanese independence “is not part of the one-China policy.” A senior administration official explains that Bush’s comments are merely an attempt to “try to get the words straight…to reaffirm existing US policy.… No change was intended” and Bush simply “didn’t present the whole thought.” [CNN, 4/25/2001] Bush’s comment reflects the position of administration neoconservatives such as Defense Secretary Donald Rumsfeld and Deputy Defense Secretary Paul Wolfowitz, who want the US to recognize Taiwan as an independent nation and pledge to defend Taiwan against Chinese aggression. At the same time, the United States has also said it has commitments to Taiwan under the Taiwan Relations Act, and it has been implicit but never stated the United States would help Taiwan defend itself. Bush said repeatedly during the 2000 presidential campaign that he intended to redefine the US’s position towards Taiwan. [CNN, 4/25/2001]

Entity Tags: Paul Wolfowitz, Ari Fleischer, Donald Rumsfeld, George W. Bush

Category Tags: US-China Relations, Neoconservatives in Foreign Policy

The Washington Times reports that an unpublished report by defense contractor Booz Allen Hamilton concludes that China is expanding its military and is “building strategic relationships” along sea lanes from the Middle East to Southern China” in ways that suggest defensive and offensive positioning to protect China’s energy interests, but also to serve broad security objectives.” The paper, titled “Energy Futures in Asia,” was commissioned by Donald Rumsfeld. China intends to protect the sea lanes militarily, by strengthening its navy and developing undersea mines and a missile system. The report warns that these capabilities could be used “to deter the potential disruption of its energy supplies from potential threats, including the US Navy, especially in the case of a conflict with Taiwan.” Beijing is also developing strategic alliances with the states along the sea lanes in an effort to increase its influence in the region. [Washington Times, 1/18/2005]
Pakistan - Beijing is constructing a naval base at the Pakistani port of Gwadar and setting up electronic eavesdropping posts in the city which will monitor ship traffic through the Strait of Hormuz and the Arabian Sea. [Washington Times, 1/18/2005]
Bangladesh - China is developing closer ties to Bangladesh and building a container port facility at the city of Chittagong. [Washington Times, 1/18/2005]
Burma (Myanmar) - China has established close relations with the military regime of Burma. It has provided Burma with “billions of dollars in military assistance to support a de facto military alliance,” is building naval bases there, and has already positioned electronic intelligence gathering facilities on islands in the Bay of Bengal and near the Strait of Malacca. Burma’s location is of strategic importance to Beijing because of its close proximity to the Strait of Malacca, through which 80 percent of China’s imported oil is shipped. [Washington Times, 1/18/2005]
Cambodia - In November 2003, China agreed to provide training and equipment to Cambodia’s military. China and Cambodia are engaged in a joint effort to build a railway from southern China to the sea. [Washington Times, 1/18/2005]
Thailand - China may fund a $20 billion canal that would cut across the Kra Isthmus and allow ships to bypass the Strait of Malacca. [Washington Times, 1/18/2005]

Entity Tags: Donald Rumsfeld, Booz Allen Hamilton

Category Tags: US-China Relations

The US House of Representatives approves House Resolution 344 (H.Res.344) with a 398 to 15 vote urging President Bush to block the proposed takeover of Unocal Oil by the Chinese National Overseas Oil Company (CNOOC Ltd) on the grounds of national security. CNOOC has bid $18.5 billion for Unocal against a $16.5 billion bid by Chevron. In a written statement, China’s foreign ministry says, “CNOOC’s bid to take over the US Unocal company is a normal commercial activity between enterprises and should not fall victim to political interference.” [Washington Post, 7/4/2005] Congressman Duncan Hunter (R-CA) warns that the “Chinese would also be advantaged by such a transaction because it would extend their military and economic reach in such a way that could potentially impact… [US] involvement in East Asia.” [Office of Representatives Duncan Hunter, 7/1/2005]

Entity Tags: Duncan Hunter, George W. Bush, Unocal, Chinese National Overseas Oil Company

Category Tags: US-China Relations

The Group of 20 (G20)‘s pledge to return balance to the world economy may place the US dollar in a precarious position in the long run, experts feel. Over recent weeks, the dollar has fallen 4.3 percent this quarter because of equity market weakness as well as emerging major currencies as other countries begin their recovery from the worst economic downturn since the 1930s. Some G20 meeting attendees see the dollar as susceptible to damage while questioning its stability as well as its status as the global reserve currency, although the recent weakness of the dollar is not being blamed on the weakness of the US economy. Analysts say that short-term effects to the G20 meeting of other wealthy, developing economies will be subdued; however, they say that over a longer period, bank stocks and energy prices as well as the dollar may be harmed by G20 economic balancing actions. World leaders have expressed concern that the US economy’s recovery cannot be sustained because its rebound is due to government stimulus and increased borrowing. During the meeting in Pittsburgh, the leaders agree that to balance the global economy, the US needs to save more while the massive exporter China needs to consume more to support its growth. David Gilmore, partner at FX Analytics in Essex, Connecticut, explains, “The real problem is the world needs a huge consumer and the US has been basically doing it for decades, and now it’s spent.”
US Dollar as Reserve Currency - Robert Zoellick, president of the World Bank, says the US should not take the dollar’s status as the key global reserve currency for granted now that other options are emerging. Zoellick says that shifting global economic forces reveal that it is time to prepare for growth to come from multiple global sources. Although the world’s largest economies also agree to phase out subsidies on oil and other fossil fuels over the “medium term” to combat global warming, they acknowledge that the phase-out probably will not affect energy markets in the short term. In the long term, they say, the move could weigh on energy markets, cutting fuel demand in emerging markets. As for emergency economic support, G20 leaders promise to continue support until recovery is “at hand,” thus providing some relief for foreign currencies.
Economic Rebalancing Equals Shift from Dollar as Reserve Currency? - Global economic balancing is a two-edged sword for the dollar because the currency has been damaged by extremely low interest rates and the glut of dollars in the international monetary system. But the recession already has triggered partial rebalancing as US consumers cut spending while China spends $600 billion to stimulate its economy while making itself less dependent on exports. Analysts quickly note that minus tangible steps, the pledge only serves as lip service. The analysts also say it is improbable that countries would bend to G20 rules on how to run their economies. Nonetheless, the plan would be a clear shift, signaling a move away from the dollar. Currency strategist Kevin Chau of New York’s IDEAglobal says: “In the long run, I think they want another reserve currency, whether it’s the Special Drawing Rights or the Chinese yuan. For any country’s currency to gain that kind of credibility and trust, it would take years of development.” Still, last week, the dollar fell to a new low against the euro and even dropped below the key 90 yen-per-dollar level. [Reuters, 9/27/2009]

Entity Tags: IDEAglobal, David Gilmore, World Bank, Robert B. Zoellick

Category Tags: Diplomacy and Geopolitics, US-China Relations, US-European Relations

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