Thursday, May 21, 2009

Balancing act for new US envoy to China

Business Times - 22 May 2009


Balancing act for new US envoy to China

Republican Jon Huntsman, who speaks fluent Mandarin, is clearly qualified for the job

By LEON HADAR
WASHINGTON CORRESPONDENT

TO say that US President Barack Obama's selection of Governor Jon Huntsman as the next American ambassador to Beijing came as a surprise to Washington's politicos and media types would be an understatement.

Not only is Mr Huntsman a leading Republican figure. In fact, he is the governor of Utah, a state that is considered by political experts as very, very 'red'.

Not the kind of red that Chairman Mao Zedong would have been keen on, but more like the colour associated with the Republican Party that has dominated the politics of this state where members of the conservative Church of Jesus Christ of Latter-day Saints or Mormons constitute the majority of the population.

Utah has not voted for a Democrat for president since 1964 and, historically, Republican presidential nominees have scored their best margins of victory in this state. Not surprisingly, it didn't vote for Democratic presidential candidate Barack Obama in 2008. Actually, Mr Huntsman served as National Co-Chairman of Republican John McCain presidential campaign last year.

Interestingly enough, Mr Huntsman was mentioned as someone who might consider running for the Republican presidential nomination in 2012. And indeed some of Mr Obama's aides regarded the moderate and telegenic governor as a Republican who could probably have given the current Democratic president a run for his money in less than four years.

That means that sending Mr Huntsman to Beijing removes him from the long list of those who could possibly challenge Mr Obama in the next presidential race.

But you have to be an ultra-Machiavellian thinker to conclude that Mr Huntsman's choice as US ambassador to China was driven by Mr Obama's cold electoral calculations. Instead, Mr Obama's decision reflects his ability to apply a creative pragmatic approach, and to think outside the box when it comes to foreign policy.

At a time when almost everyone in official Washington agrees that the direction of US relationship with China will help determine America's geo-strategic and economic status in the coming years, Mr Obama needed to select as his representative in Beijing a respected public figure who was not only fit for the job but who also had the political gravitas to build support on Capitol Hill as America's ties with the rising East Asian superpower face many tests in the future.

There is no doubt that Mr Huntsman, who speaks fluent Mandarin and who served as US ambassador to Singapore under the administration of president George H W Bush and then as deputy US trade representative during the first term of president George W Bush's administration, is clearly qualified for the job.

Having served as a Mormon missionary in Taiwan and having spent a lot of time in China (he and his wife have an adopted Chinese daughter), he has maintained extensive personal and professional ties in the region.

From China's perspective, Mr Huntsman brings with him not only the knowledge and experience that is required from an American emissary to Beijing. In a way, Mr Huntsman has the kind of personality and background that the Chinese seem to find attractive when it comes to American public figures: He is a successful businessman and a strong proponent of free trade.

And he is a Republican. Indeed, while the Chinese were not great fans of President Bush the Second's foreign policy unilateralism and military adventurism, they were quite comfortable with the emphasis Mr Bush placed on strengthening Sino-American business ties and resisting protectionist and China bashing pressure on Capitol Hill.

And it is not a secret that while officials in Beijing have been intrigued by the young and visionary new US president, they have also been concerned over some of the protectionist sentiments expressed by candidate Obama during the campaign.

The Chinese worry also over labour unions and their anti-free trade allies among the Democrats on Capitol Hill who have called for punishing China for its alleged manipulation of its currency and think that this message could have a powerful impact on President Obama's policy towards China.

Add to that rising Chinese anxiety over the long-term impact of Washington's recent spending spree for bank bailouts and stimulus, which could trigger inflation and reduce the value of the US Treasuries that China has purchased in recent years, and it becomes quite clear why the continuing shocks of the current global economic crisis could have devastating effects on the relationship between the two countries. Then there are the geo-strategic issues, including Taiwan and North Korea, that are still on top of the foreign policy agendas of both countries.

Economists seem to agree that the financial imbalances between China and the United States were driven by Chinese savings and American spending, as the Chinese sold cheap export goods to American consumers and recycled the dollars they acquired into US Treasury bonds and helped finance the US housing bubble.

Now that the bubble has burst and ignited a credit crunch that has put downward pressure on both their economies, both the Americans and the Chinese recognise that any serious efforts to put their respective economic houses in order will require pursuing a common strategy to repair the financial imbalances.

In that context, Mr Huntsman, who enjoys bipartisan support on Capitol Hill and is expected to be confirmed by Congress without much delay, will be the central US player in massive global economic changes as America tries to spend and stimulate itself out of the economic crisis and China tries to export its way to economic growth.

The new American ambassador will need to work with President Obama and his economic and foreign policy teams to allay fears in Washington over China's economic ascendancy and resist rising protectionist pressure on Capitol Hill.

At the same time, he must ensure that the Chinese continue to support the American economic recovery. It will probably remain a difficult co-dependency relationship which Mr Obama will find difficult to manage and will certainly need all the help he can get from his new man in Beijing.


Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.

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