LexisNexis(TM) Academic - Document

Financial Times (London, England)

August 23, 2005 Tuesday
Asia Edition 1

SECTION: MIDDLE EAST & THE AMERICAS; Pg. 4

LENGTH: 743 words

HEADLINE: Washington treads gently as China's strength grows: The US is to urge Beijing to see its global role in broader terms than just the search for energy, writeCaroline Daniel and Demetri Sevastopulo

BYLINE: By CAROLINE DANIEL and DEMETRI SEVASTOPULO

BODY:

With the first official visitto the US by Hu Jintao since he became China's presidentin 2003 only weeks away, diplomats are already engaged in the management of nuance.

Should it underline personal ties with President George W. Bush, with a barbecue visit to his Crawford ranch, or be cemented by an official state dinner at the White House with a ceremonial gun salute?

The two presidents will meet in the week of September 6. The emphasis is more on symbolism not substance, or in State Department-speak, "deliverables". China wants to be seen as an "equal partner" with the US, putting pressure on Mr Hu to present an acceptable face of the rising China. "The most important pillar of China's peaceful rise and peaceful development is to have good relations with us," a senior administration official told the FT.

While officials are tamping down tensions ahead of the visit and keen to carve out more expansion opportunities for US businesses, there are clear challenges: China's grab for energy, concerns about how China's economic growth will translate into geopolitical clout, and its military expansion.

Perhaps the toughest is the wave of congressional disquiet evident in the hostile reaction to the bid by CNOOC, a Chinese state-controlled oil company, for Unocal, the US oil company. Last week, Senator Chuck Schumer, who led calls for a 27.5 per cent tariff on imports if China did not revalue its currency, accused China of restricting US businesses by limiting joint ventures and requiring technology transfers.

Officials argue that China has made itself an easy target by being slow to revalue and tackle intellectual property rights, by permitting anti-Japan riots over a Japanese history book, and by courting dictators such as Robert Mugabe of Zimbabwe and Islam Karimov of Uzbekistan and developing ties with Hugo Chavez of Venezuela.

"The Chinese, even if they procured all the Unocals and forged relations with all the Chavezes, would still fall short of what they need for energy . . . China will not solve its problems by dealing with unsavoury regimes and it is one of the points we are trying to make to them," the senior official said.

The US administration is treading gently: the CNOOC bid was not discussed by Robert Zoellick, the deputy secretary of state, in his talks in China this month.

A State Department official said: "Zoellick explained that the Chinese need to be aware that how they are viewed across a range of issues can be important for how others act towards them. Seeing heavy Chinese energy activity in Sudan, without humanitarian activity during this crisis, can create an image problem that can impact how others develop policies to China."

Mr Zoellick said in Beijing: "I explained how it was important for the US and China to work together on the bigger issues facing Sudan: implementation of the north-south accord, dealing with the genocide in Darfur." Yet behind that comment is a deeper concern at how far China will use its growing economic clout to bend international rules for its own ends and how far its policy of non-intervention can limit the ability of the international community to act in rogue states.

"When you look at Darfur, Nepal or Burma, China because of its weight can undermine efforts to create international norms that address transnational problems associated with such regimes. We are encouraging China to see its global role and responsibilities in broader terms than just energy," said the senior administration official.

The US is also encouraging Japan and India to play a larger role as counterweights, such as the recent decision to offer India civilian nuclear energy co-operation. This engagement represents a return to the management of great power relations that guided the thinking of Condoleezza Rice, secretary of state, for more than 20 years. In 2000 she wrote in Foreign Affairs: "China's success in controlling the balance of power depends in large part on America's reaction to that challenge. The US must deepen its co-operation with Japan and South Korea. It should pay closer attention to India's role in the regional balance."

Officials remain leery of talk of containment. "It is very useful to remind China there are other emerging powerful countries, such as India, who are setting standards we agree with. This is very different from containment; it is more about encouraging or shaping China's view of the international system in a constructive way," the official says.

LOAD-DATE: August 22, 2005

LexisNexis(TM) Academic - Document

Financial Times (London, England)

September 3, 2005 Saturday
Asia Edition 1

SECTION: ASIA-PACIFIC; Pg. 4

LENGTH: 794 words

HEADLINE: From Friendship Hotel, a message of amity: A Beijing leader tells Richard McGregor why the rise of China will not threaten the west

BYLINE: By RICHARD MCGREGOR

BODY:


When Hu Jintao needed an emissary to take a message to US leaders ahead ofhis Washington visit next week, he dispatched ZhengBijian, a trusted colleague from the time the pair ran the Communist party's school inthe 1990s.

Mr Zheng is the architect of the "peaceful rise" theory, which contends that,unlike other rising nations in history, China will integrate with status quo powers rather than challenge them through war or other means.

Articulated to counter the "China threat" theory, Mr Zheng's musings have been elevated into high policy by the top leadership, who have used it to try to soothe growing concerns about the mainland's putative superpower status.

"China's rise is an entirely new phenomenon unseen in world history," says Mr Zheng, 72, a tall, courtly figure, in an interview at his office at the Friendship Hotel in the suburbs of Beijing.

"I understand why the western world is feeling so confused about the peaceful rise of China and why you cannot reach a consensus."

Mr Zheng received a reception worthy of his status in Washington in June, meeting top administration officials, including Condoleezza Rice, Robert Zoellick and Stephen Hadley, and delivering a speech to the Brookings Institution.

The chairman of the semi-official China Reform Forum since retiring from the party school, Mr Zheng rarely gives media interviews, preferring to propagate his views in public speeches and private meetings.

But his willingness to press his opinion in an interview with the Financial Times is evidence that Chinese leaders worry their message is not getting through in an increasingly hostile Washington.

His thesis rests on two pillars, that China's reforms in the past quarter of a century have delivered unprecedented prosperity to its people and also helped stabilise the world; but that it cannot sustain such development without a further deep integration with the global economy.

He pointedly compares China with other regimes that have risen to challenge the US, Britain and other western countries, such as Hitler's Germany, Hirohito's Japan and the former Soviet Union, only to be defeated or collapse. "China has rejected these above-mentioned countries because China emphasises win-win," he says. "China will never use violence to disturb the current economic order of the world. So you should have a different strategy for dealing with China."

The contrast with the former Soviet Union, which helped sow the seed of its later collapse in 1979 with the invasion of Afghanistan, the year China launched its market economy reforms, is especially instructive.

"The Chinese Communist party is not like the Communist party of the Soviet Union, hence our confidence in future prosperity."

Mr Zheng's reassurances are laced with the suggestion of dire consequences should the west oppose China's rise and sabotage its sovereign rights, including Taiwan and energy security.

"China is a new problem and you need to have a new way of thinking. Otherwise you might have a strategic misjudgment," he says.

At the same time China needs a peaceful external environment to handle its own dramatic internal challenges of economic management and wealth creation.

China faces catastrophic environmental and water problems; a restive rural population increasingly demanding that its rights be respected; and the job of managing the migration to cities of hundreds of millions of surplus agricultural workers.

"That means about 100m-200m young surplus labourers will have to have vocational training so they can find jobs in coming years," he says.

Mr Zheng's theory has been far from universally accepted within China, with many scholars criticising the theory for suggesting a dilution of Beijing's determination to use force if necessary to assert its claim over Taiwan.

"One does not restrain one's options," says Shen Dingli, of Fudan University, in Shanghai.

Yan Xuetong, a well-known Taiwan hawk at Tsinghua University in Beijing, says he "frequently uses the word 'rise' but I seldom use the term 'peaceful rise' ".

Mr Yan worries that the phrase underestimates the huge impact China's continued development will have on other countries. "China's growth is not like quick growth in Cambodia or some African country," he says. "It will change the world dramatically and I think the world should prepare for that."

Chinese leaders first began using the term "peaceful rise" in late 2003 and 2004, but then largely dropped it after a long internal debate.

Since then the phrase "peaceful development" has been preferred but, despite the semantic difference, its import is much the same as the original.

"I don't think you should suspect there is any political manoeuvring behind this phrase," says Mr Zheng, who has determinedly stuck with the term. Man in the News, Page 7

LOAD-DATE: September 2, 2005

LexisNexis(TM) Academic - Document

Copyright 2005 The Financial Times Limited
Financial Times (London, England)

September 6, 2005 Tuesday
London Edition 2

SECTION: COMPANIES ASIA-PACIFIC; Pg. 12

LENGTH: 418 words

HEADLINE: China 'has boosted the US economy' BANK CHIEF:

BYLINE: By RICHARD MCGREGOR

DATELINE: BEIJING

BODY:


One of China's top finance officials has made a plea for greater understanding of his country's contribution to the US economy, saying its supply of cheap goods and capital in recent years has helped to moderate inflation and fuel growth.

Guo Shuqing, chairman of the China Construction Bank (CCB), the country's second-largest domestic lender, said he understood that some US critics were only protecting their own national interest, but that conclusions should be based "on raw facts".

"We have benefited a lot from the outside, but our contribution to the international community is no less than that," said Mr Guo in an interview. "Our net capital outflow to the US is many times the capital inflow into China from the US."

He said large purchases of US treasuries and other US-issued bonds by the Chinese central and commercial banks had "injected huge amounts of cheap capital into the US economy".

"We have played a significant role in stabilising the financial market in the US. We have also offered cheap goods," Mr Guo added. "Without China's economic rise, we wouldn't see the current international inflation situation."

Mr Guo's comments were made on the eve of the postponement of President Hu Jintao's visit to the US, a trip that Beijing had hoped could be used to alleviate growing distrust and suspicion of China in Washington.

Senior Chinese like Mr Guo appear to have taken US acrimony over the failed bid by CNOOC, the Chinese energy enterprise, for Unocal, the American oil and gas company, as a sign that China needs to make its case more lucidly on the world stage. Mr Guo also has a personal interest, as CCB is preparing a Dollars 5bn (Euros 4bn, Pounds 2.7bn) initial public offering overseas, possibly as early as November or December, a pioneering listing which is crucial for Chinese bank reform.

He said there had even been concern expressed in the US about the "restructuring and listing of China's state banks".

"(Some Americans) are worried if China raises a lot of money in the US, whether it will affect the security of the financial sector; whether it will lead to (a) bubble on the stock market; and whether China will join an arms race (using the money)," he said.

Despite the US professing to run an open economy, he said the CCB was still allowed to have only a representative office there after many years of trying to open a full branch.

"US companies' investments are welcomed in China in nearly all industries. But we have suffered from the unequal treatment in the US," he said.

LOAD-DATE: September 5, 2005