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China/U.S.: Trade Deficit, Iran Top Agenda For Summit

  • Andrew Tully --> Chinese President Hu Jintao (right) meets with Microsoft Chairman Bill Gates (left) during a meeting at company headquarters in Redmond, Washington, April 18 (epa) On April 28, the UN's International Atomic Energy Agency will report to the Security Council on whether Iran has suspended uranium enrichment for its nuclear program. If the activity hasn't stopped, the United States and three European powers -- Britain, France, and Germany -- want the Council to consider imposing sanctions on Iran. But China is one of the five permanent members of the Council which opposes sanctions. China's president, Hu Jintao, is in the United States this week and meets tomorrow with President George W. Bush. Will the American leader press Hu on this, and other important issues?

WASHINGTON, April 19, 2006 (RFE/RL) -- Bush is hoping for Hu to move China's position on Iran at least a little closer to that espoused by Washington and the three European Union powers.

That's according to Michael Swaine, who specializes in Chinese security and foreign policy at the Carnegie Endowment for International Peace, a private research center in Washington.

Swaine was one of three analysts at a phone-in seminar that Carnegie held for the news media today. He said China's primary security issues now are the nuclear programs of North Korea and Iran -- and both are equally problematic to Beijing.

Looking For Support On Iran

Iran may not be as close a neighbor to China as North Korea, Swaine said, but trouble in Tehran could mean trouble with Muslim Uighurs in western China.

"North Korea is right on [China's] border, and that represents a major threat of instability that they don't want to have to deal with," Swaine said. "And Iran also is not at all far from their border and represents, in its position in the Islamic world and in terms of Islamic fundamentalism, a potential threat for the Chinese in the western parts of their country, and they don't want to have that kind of increase in Islamic fundamentalism as a result of a meltdown in Iran or some increasing instability threaten their interests in that areas as well."

Still, Swaine notes that China is resisting the idea of imposing sanctions on Iran if it doesn't stop processing uranium. So he says he expects that at their meeting, Hu and Bush will merely maintain their current positions on Iran as well as North Korea.

Specifically on Iran, Swaine said, Bush probably will at least bring up the subject of sanctions, and he may even be optimistic about getting a slight concession out of Hu.

"I don't believe the Bush administration is regarding the Chinese as the obstacle to reaching some kind of solution or some improvement in the situation. The U.S. purpose is to encourage Hu Jintao to make a supportive statement publicly in both of these areas [Iran and North Korea] and perhaps, regarding Iran, to be more receptive to the use of selective sanctions if Iran doesn't comply with the UN Security Council's statement by the end of April."

$2 Billion U.S. Trade Deficit

But can Bush expect more than a slight concession? Not really, according to Swaine and another Carnegie analyst attending the seminar, Minxin Pei, who specializes in Chinese politics.

Swaine said both Hu and Bush plan to use their meeting as a way to show their two peoples that each government respects the other and takes it seriously on economic, security and political issues, even if they occasionally disagree. As a result, he said, no one expects anything like a breakthrough in relations.

Pei agreed.

"I think both sides have played a very good game of lowering the expectations for this visit," he said. "Those expectations have been set very low. So if nothing happens, it will be viewed as a success. If something happens, it will be viewed as a spectacular success."

After the communist revolution more than a half-century ago, China entered a period of self-imposed isolation from the West that didn't end until U.S. President Richard Nixon visited Beijing in 1972. Since then, the communist government has adopted a form of capitalism, and its economy is now expanding prodigiously.

The result is that the United States has a trade deficit with China that exceeds $200 billion, and U.S. companies complain that upstart Chinese entrepreneurs are stealing billions of dollars more in intellectual property, particularly software.

Many in Congress have urged the Bush administration to take retaliatory action against China, but the president has resisted, saying protectionism would be the wrong course.

But yesterday -- the day before Hu's arrival in the United States -- Lenovo, a major Chinese-owned computer manufacturer, promised to install the Microsoft Windows operating system on all the computers it makes in China. This could mean more than $1 billion in restored royalties to Microsoft.

And last week, Beijing promised to pay $5.2 billion for 80 airplanes made by the Boeing Corp.

Copyright Issues Remain

Microsoft's headquarters are in the northwestern U.S. state of Washington, and Boeing also has factories there. And it was in the state's largest city, Seattle, that Hu began his U.S. tour. Last night he attended a dinner outside Seattle at the home of Microsoft founder Bill Gates.

While the Microsoft and Boeing deals may be good public relations for Hu in the state of Washington, they may not signal an end to economic strife between the United States and China, according to Albert Keidel, the third analyst at today's Carnegie seminar.

Keidel, who studies the economies of East Asia at the think tank, said the government in Beijing may want to end software piracy, for example, within its borders, but wishing and doing are not the same thing.

"It's really not just an issue -- as I said -- of snapping your fingers at the top and having officials around the country close factories that are copying copyrighted material, whether it's written or software or whether it's medicine and the formulas behind those medicines, because the Chinese have their own horrendous problems -- as does every poor country in the world -- in disciplining knock-offs [copyright pirates]."

After tomorrow's meeting with Bush, Hu travels to Yale University in the northeastern state of Connecticut to deliver a speech. The subject, though, isn't known.