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Three Tips for President Obama on China…and Asia

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China Power

Three Tips for President Obama on China…and Asia

Elizabeth Economy offers three tips to advance U.S. interests in the bilateral U.S.-China relationship, and in Asia.

President Obama,

You and your foreign policy team have steered the United States on a constructive course in Asia over the past few years. There is thus no need for a policy overhaul. However, the dynamics of the region—from exploding trade and investment to rapidly rising security tensions and emerging flashpoints—leave no room for complacency.

With a new leadership in China and your new foreign policy team coming together in Washington, it is a good time to take a step back and assess what more you can do to advance U.S. interests in the bilateral U.S.-China relationship, as well as in the Asia-Pacific region more broadly. Here are three suggestions:

1. Breathe life into the pivot (or rebalance) in Asia

The pivot was a singularly deft move. It gave economic and strategic purpose to a previously aimless U.S. policy in Asia, while simultaneously addressing the very real concerns of many U.S. allies and partners over China’s aggressive rhetoric and actions in the Asia-Pacific region. The pivot also helps secure the U.S.-China relationship in a larger regional context, which is helpful given the wide range of shared trade and security interests.

Now it is time to put our money and muscle where our mouth is. The economic opportunities, as well as the security risks in the region, are only growing. The United States needs to devote real energy to negotiating the high-end regional free trade agreement, the Trans-Pacific Partnership; and it needs to start restocking the region with our military personnel and hardware. Otherwise you run the real risk that the pivot will prove without real substance and the naysayers—those who keep questioning the long-term commitment of the United States to the Asia Pacific—will win the day.

2. Welcome the Chinese proposal for a “new type of relations between major countries,” then ask what it means and what the Chinese are planning to do to realize it

Chinese foreign policy scholars and officials have adopted a new mantra: it is time for a “new relationship” between the United States and China. Yet probe a little bit, and it is almost impossible to find someone who can define what this new relationship might entail.

To the extent that there is some collective understanding within China of the broad contours of this new “major country” relationship, it seems to rely overwhelmingly on the United States changing the way it does business. According to Chinese foreign policy analyst Jia Xiudong, the ability to achieve this new relationship depends on how the United States views China’s strategic intention; how the United States moves forward on rebalancing; and how the two countries “develop their potential” for win-win cooperation. Senior foreign affairs official Wang Yusheng similarly says this about the “new type of relations”: “The ball is in the U.S. court. So long as the U.S. can make efforts in the same direction as China does, there is hope.”

The Chinese have been relatively reluctant in the past to help construct bilateral or international agreements and architecture, so it is important to encourage such efforts. But before a new type of relations between the two countries can come to fruition, Chinese thinkers and officials will have to do more than say it is up to the United States.

3. Get the U.S.-China economic relationship right

The good news is that the U.S.-China economic relationship is one of the world’s most robust. We are each other’s second-largest trading partners, and China represents the fastest-growing market for U.S. exports. Chinese firms also invested more than $6.5 billion in the United States in 2012, over 10 percent more than the previous high in 2010.

At the same time, challenges in the trade and investment relationship are proliferating, including intellectual property rights theft, fraudulent reporting of assets by Chinese companies, and concerns over burgeoning investment in the United States by Chinese state-owned enterprises with weak corporate governance.

The United States would benefit from a trade and investment architecture that offered greater protection to U.S. economic interests. Both a bilateral investment treaty and, over the longer term, a free trade agreement fit the bill. President Obama, your team should make moving forward with these negotiations one of the top priorities of the Strategic and Economic Dialogue.

Mr. President, the United States can continue to help drive an economically dynamic and strategically secure Asia by keeping the region front and center in U.S. policy priorities. Given all the other demands on your foreign policy team, this will not be easy. However, there is much to gain and more to lose if you don’t continue to assert U.S. leadership in the region.

Elizabeth C. Economy is C.V. Starr Senior Fellow and Director for Asia Studies at the Council on Foreign Relations. She is an expert on Chinese domestic and foreign policy and U.S.-China relations and author of the award-winning book, 'The River Runs Black: The Environmental Challenge to China's Future.'  She blogs at Asia Unbound, where this piece originally appeared.