This has certainly been China Week for both the domestic and international press. On the domestic side, Treasury Secretary Timothy Geithner was grilled by the House Ways and Means Committee about China's currency exchange rates, in which the yuan is essentially pegged to the U.S. dollar. That panel is voting on legislation that would punish Chinese goods with tariffs ("countervailing duties", as described in this AFP article). Such a tariff would almost certainly result in some sort of trade war, the severity of which would likely be determined by the capability of Obama's diplomats and trade representatives. While the bill may not come to a vote given Congress' schedule before the midterms, few politicians will waste the opportunity to get behind such a populist initiative.
China was even more in the news on the international front. The week was filled with stories surrounding the Japanese arrest and continued detention of Zhan Qixiong, the captain of a Chinese fishing boat which collided with a Japanese patrol vessel near the disputed Senkaku Islands (Diaoyu Islands in Chinese). The immediate crisis abated on Friday when prosecutors released the captain, indicating that Japan was ready to concede on the basic issue (while also vowing not to apologize to the Chinese).
More ominously, China threatened (then apparently backtracked) to block the export of rare earth metal to Japan. Despite their name, these metals are exceedingly common on Earth, but few places produce them in any quantity besides China. These metals are crucial for modern technology, ranging from cell phones to the Toyota Prius, and ultimately Japan is dependent on these Chinese-sourced metals for much of its economy.
The other story of note is that the People's Liberation Army and the U.S. Army are prepared to reopen bilateral discussions after they were abruptly cut-off earlier this year. This is an interesting development given Secretary of State Hillary Clinton's recent side comment that the United States would attempt to intervene in the simmering dispute over the South China Sea.
All of these stories have given rise to an incredible amount of analysis and hand-wringing in the American press. Doyle McManus in the Los Angeles Times writes that China is "…beginning to throw its weight around Asia…" and believes these recent news stories are China's way of "… testing its neighbors - and the United States - to see what it can get away with at a time when the Obama administration has its hands full in Afghanistan." Bloomberg writes that China overplayed its hand and has undermined its own outreach programs.
The bigger question of course will be how the United States handles this situation in the coming years. The China debate has been on-going for literally decades, from the support of the Nationalists over the Communists in the 1940s through the opening of China in the 1970s, from the human rights approach in the early years of the Clinton administration to the strategic competitor line used by George W. Bush. China's rapid change and dynamism means that U.S. policy can not stay still, yet, what is needed is precisely a long-term framework for handling and managing the rise of China.
There is no question that the relative influence of the United States will decline in the Asia-Pacific region. The region will become multi-polar, and America will have a harder time building up its military and economic alliances. At the same time, we should not underestimate the desire of much of the region for a pole opposite of China. Some commentators took Japan's capture of the Chinese fishing captain to indicate that it felt safer to act given U.S. comments on the South China Sea earlier this month. That is probably too strong a statement, but it indicates that U.S. support for the region will be crucial in deciding where the balance of power will finally lie.
What then is the doctrine that should unify our approach? I call it "Quiet Resilience," an approach that notes that America will not win every battle but that long-term, steady and strong support can lead to an empowered position for America within the region. Given the size of both countries, it is foolish to consider direct confrontation, whether military or economic.
Instead, America's grand strategy must first focus on building strong allies in the region as a firewall to Chinese expansionism and militarism. This past decade witnessed the reopening of trade with Vietnam through a bilateral trade agreement, creating important economic ties. While the Futenma Base in Okinawa continues to create controversy, the issue seems to not have significantly damaged U.S.-Japanese relations (the same cannot be said for Yukio Hatoyama). Korea remains a staunch U.S. supporter under the administration of Lee Myung Bak, especially since the sinking of the Cheonan and the rather cold response of the Chinese on the issue of North Korean sanctions. Singapore remains a critical ally as well, and new ties between the United States and the city-state are crucial for trade (for instance, Yale's assistance to the National University of Singapore is the perfect means for cementing this relationship).
To continue this trend, the United States needs to build more support in Indonesia (where Obama's personal experience may help despite snubbing them twice on visits). The battle here is crucial, as stories like this one discussing the rise of Mandarin classrooms from Foreign Policy indicate. The island nation is the anchor of the Pacific islands, and it holds the key to crucial trade routes as well. America must also reach out to Pacific island nations that have benefited from significant Chinese largesse in recent years. Throughout the region, the U.S. must go on an information offensive, building up its "brand" after the Afghanistan and Iraq wars and the financial crisis.
Quiet Resilience requires a much more even-handed, nuanced framework than is typical in the quickly changing policy sections of Foggy Bottom. It means connecting policies in Africa with those in other regions, while integrating the goals of development and diplomacy together (a challenge that the Obama administration once promised to solve but now seems to be avoiding). If the United States can create resilience in the region, there is no reason that America's position and that of its allies in the region cannot be protected for a generation to come.