China and the RMB: More Awkwardness from Obama

2010-02-13

I seem to be criticizing the Obama administration's China policy a lot lately. I am not doing this because I harbor any hostility towards Obama or the Democrats. Quite the contrary.

But recent decisions made by the White House and disclosures about how the China team is being utilized in the making of U.S. China policy are disturbing. Here's today's installment, from a Bloomberg report of an interview they conducted with Obama:

In an effort to make U.S. exports more attractive, Obama set a year-end objective for persuading China to allow the value of its currency to rise.

“My goal over the course of the next year is for China to recognize that it is also in their interest to allow their currency to appreciate because, frankly, they have got a potentially overheating economy,” Obama said.

He said his administration is “going to have some very serious negotiations” with China that are “going to be bumpy.”

Oh, man. He probably wishes he could take that language back.

The margin of error in international relations is tiny, and every single word is scrutinized quite carefully. This is well known, and therefore Obama's statements come as a bit of a surprise to me.

I understand what he was trying to say. The U.S. hopes to have productive talks with Beijing this year over currency valuation, and that eventually China will decide that it is in their interest to revalue in the short term.

That's fine. Unfortunately, however, what he said included what sounded like a deadline, a demand coming from the U.S. He then goes on to say that it is "my goal" to have China recognize something about their economic situation. Again, bad phrasing. Sounds like the U.S. is up on high educating China about its own domestic problems.

I know this looks as though I'm splitting hairs here. I am, but I believe in this case it is a reasonable thing to do. Of course the Chinese government is carefully reviewing anything that Obama says about US-China policy. Any hint of high-handedness or a patronizing tone will be picked up on and pushed back against.

The U.S.-China relationship is not so fragile that this language is going to any significant damage. On the other hand, this is a sensitive, high-stakes game, so you'd think that the White House would take great pains to not make stupid, careless mistakes like this.

I'm starting to get discouraged . . .

Tags: U.S.-China Relations