Obama-Xi Summit – June 15, 2013

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The recently concluded Obama-Xi summit was a welcome departure for both sides from the pomp and protocol which usually accompanies such events. It gave Obama and Xi a chance to take each other’s measure in the unconstrained environment of the Sunnylands estate in California. Some kind of an accommodation between the Big Two (estimates suggest China overtaking the US as the world’s largest economy in 2016) would not only be beneficial for both giants but also have positive effects, globally.

The US-China relationship is being observed with heightened interest by the international community not least because of the publicly stated intention of the Obama administration to pivot to the Asia- Pacific region. The US has signaled on more than one occasion, that its strategic interests are shifting from the battlegrounds of the Middle East toward East Asia. This region has made remarkable economic progress in the past decades, an achievement which has been showcased by China’s dazzling development indicators.  The US therefore sees this area as a lucrative market for its exports, foreign investment and for the reinforcing of its influence among its allies in South East Asia. Japan of course heads this list, followed by the Philippines, Indonesia, Malaysia, and others. All these countries, in particular India, view with less than equanimity the rise of the Chinese leviathan, which could presage a long period of unwelcome Chinese hegemony. All these countries (except India which in strictu sensu is in South Asia, but does have a long standing border dispute with China) have territorial disputes in the South China Sea over mineral-rich maritime resources. The US has indicated that it would support its allies if China uses force against them to vindicate its own claims. The Chinese look askance at this US stance, considering the South China Sea as its own backyard in a repeat of the 19th century Monroe Doctrine. The Chinese also strongly suspect that the new contours of American policy toward East Asia are primarily directed at Chinese containment, with its corollary of not allowing China to move ahead of the US economically and politically.

The Obama-Xi summit therefore was important in emphasizing that both countries need to work for “strategic cooperation” with each other, instead of the “strategic trust deficit” which currently informs their relations. According to a former Prime Minister of Australia, Kevin Rudd, the current deficit is reflected in the “world of cyber espionage and cyber warfare; in escalating tensions in the East and South China Seas, where hundreds of naval and air assets are deployed; in escalating tensions on the Korean peninsula; and in the UN Security Council stalemate over Syria.”

A noticeably contentious issue is that of cyber espionage. The US has repeatedly admonished the Chinese for trying to steal its secrets via cyber hacking which the Chinese continue to deny. These are diplomatic denials only as apparently hard evidence of such Chinese activity does exist. Interestingly, the recent sensational revelations of Joseph Snowden, a government contractor with access to America’s intelligence secrets, has embarrassed the US.US authorities are looking for this whistle blower who is reportedly in hiding in Hong Kong, to apprehend him and prosecute him for his alleged crimes under US laws. Snowdon has disclosed that the US has been engaged in cyber espionage in China and elsewhere also. If that is indeed true then the US’ protestations to China would obviously lack the moral high ground. This irritant will be high up on the list of both countries to resolve to their mutual satisfaction. Ideally as I have already mentioned in one of my earlier reports, a UN mandated international law governing activities of nations in cyber space is called for, but absent such a treaty, a bilateral US-China code of conduct would be necessary to prevent this issue from escalating, and further vitiating relations between the two super powers.

Obama and Xi agree to establish a regular military dialogue which according to Rudd “is critical. This could contribute to rules of the road on cyber security; crisis management for the Korean peninsula; the management of incidents at sea and in the air, as well as creating a mechanism to develop basic confidence and security-building measures for the region”. Or, to use Xi’s phraseology, the summit could be the harbinger of “a new model of great power relations”.

If such an eventuality comes to pass, it would represent a win-win outcome for the Big Two and also the rest of the world. Both predominant world powers could develop in a spirit of peaceful economic competition rather than a regimen of rivalry, tension and hostility. The latter scenario would scare away the huge potential for foreign direct investment, as foreign investors would be scared away from regions where the US and China had decided to lock horns.

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