US seeks closer China ties

Barack Obama on Monday sought to recast the US’s relationship with China, urging Asia’s rising superpower to forge deeper ties with Washington on the economy, climate change and nuclear proliferation.

Speaking at the start of two days of top-level talks between the countries on the diplomatic and economic challenges confronting them, the US president predicted that Washington’s relationship with Beijing would “shape the 21st century”.

Mr Obama said: “Some in China think that America will try to contain China’s ambitions; some in America think that there is something to fear in a rising China. I take a different view.”

However, in a sign of remaining tensions, a US official said China later discussed its desire to “reform the international monetary system” in closed door meetings.

In March, China’s central bank governor floated the idea of a new reserve currency – which would replace the dollar – but Beijing has since sent mixed signals about how quickly it would like such a change.

The relationship remains largely defined by China’s status as the world’s biggest holder of US Treasury bonds, which heightens Beijing’s influence over Washington and increases its exposure to the battered US economy and swelling deficit. The two countries quizzed each other on Monday about their plans to phase out their huge economic stimulus packages.

The Obama administration has sought to give political focus to what had been a Treasury-dominated dialogue under Mr Obama’s predecessor, George W. Bush.

Hillary Clinton, secretary of state, and Tim Geithner, Treasury secretary, are taking part in the talks with Wang Qishan, China’s vice-premier, and Dai Bingguo, state councillor.

Mr Dai said that the two countries were “in the same big boat that has been hit by fierce wind and huge waves, with our interests interconnected, sharing weal and woe”.

He concluded his speech by quoting Mr Obama’s campaign cry of “Yes we can”.

Depicting China as a force
for progress that needed to co-operate with Washington, address global issues and respect human rights within its own borders, Mr Obama said the countries’ priorities should be the economy, climate change and combating the threat of nuclear proliferation in Iran and North Korea .

While he praised China for “lifting hundreds of millions of people out of poverty”, he also highlighted US calls for “the religion and culture of all ­peoples [to] be respected and protected”.

Washington responded cautiously to recent clashes involving China’s Uighur minority in Xinjiang province. US diplomats are trying to balance a likely visit by Mr Obama to China this year with a possible meeting between the US president and the Dalai Lama, the exiled Tibetan leader.

Mr Geithner urged China to shift its economy towards domestic consumption, which he said would be a “huge contribution to more rapid, balanced and sustained global growth”.

He also said that the US would help China win greater representation at international organisations such as the International Monetary Fund.