Can the US and China ever be friends?

China US Trade

Earlier this month the presidents of China and the US held a press conference where they both made statements expressing a willingness and a desire to work together in tackling the world's most important issues.

But with contrasting views on climate change, a continuing trade imbalance between the two and an increasing sense of nationalism within China, can two of the world's most important economies ever really be friends?

In Beijing, Obama and Jintao pledged to ensure a comprehensive global climate change deal was made in Copenhagen next month, as well as agreeing to push for North Korea to re-enter stalled talks on its nuclear programme. But one issue kept popping up that reminded that world of the ever present imbalance between the two powers - trade.

As Obama made his way to China, headlines were being printed that pointed towards America's alarming trade deficit, which grew to $36.5 billion in September, more than forecasters expected and the biggest such figure since January. However, what made these headlines even more significant was the fact that that 60.5 percent of the deficit, or $22.1 billion, was with just one country - China.

The most important relationship - trade - has become too complicated

The two presidents can spit as much rhetoric about "working together" as they like, but the most important relationship between China and the US - trade - has become way too complicated and contradictory for simple solutions.

This imbalance is a byproduct of over-protectionist policies employed by China, most notably China's refusal to let the yuan appreciate against the dollar. The yuan currently runs at 15 cents, but it is now agreed everywhere except China that a free-floating yuan would be worth significantly more. However by keeping its currency value lower China is able to make its products cheaper in the US, subsequently deepening the trade imbalance.

But in China people find it far easier to blame the US, putting the onus on the the debt-addicted ways of American citizens and their government. Something that also holds an element of truth. But as Time.com points out, China has been enabling this profligate behavior for years by buying trillions of dollars in US government debt and mortgage securities as part of its continuing effort to keep the yuan from appreciating too much against the green back.

China's military and growing popular nationalism presents dangers

But as China continues to develop its economic strength, there are growing concerns in the West as to how their behavior will change. It's a fact that Beijing is building up its military forces, and some now fear that popular nationalism is a growing and worrying force.

There is a simmering underground national force within China that is critical towards the government for not doing enough to stand up for the nation's interests, while also harboring an extremely hostile sentiment towards the US. There is no doubt that China's growing military and growing popular nationalism presents dangers.

But at the moment this remains only a risk, and not a high possibility. Nonetheless China may still have work to do if they are to convince Washington and the world of their good and peaceful intentions.

Until this happens, and until trade between the two countries becomes more evenly balanced, China and the US can never truly declare themselves "friends."

Graphic Source: BBC.co.uk

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