U.S. looking forward to meeting with China’s President

Pres. Hu Jintao and Pres. Barack Obama

In mid-April, Chinese President, Hu Jintao is going to visit Washington for the Nuclear Security Summit, hosted by U.S. President, Barack Obama. At first it appeared that China will not be attending, so this visit is seen as a positive step in U.S.-China relations. Although this is a nuclear summit, two major issues need to be addressed from a North American stand point and only one has to do with nukes.

The nuclear issue has nothing to do with America’s or China’s nukes, but rather, with the potential threat posed by Iran trying build the bomb. There are 5 countries in the world that have more power than all others due to a veto that they can each use in throwing out any UN resolution. Those countries are: USA, UK, France, Russia and China. For meaningful sanctions to be placed on Iran that would have any chance of dissuading them from building nuclear weapons, all 5 countries would need to be on board with the resolution. It is somewhat known that China is the toughest sell on any resolution against the Iranian regime.

Russia was also a tough sell, but their relationship with President Obama has made it possible to convince them to agree to the resolution. China, on the other hand, appears unwilling to agree to any serious sanctions against Iran as it needs it for its oil resources. The U.S. will have to try very hard to convince them to agree to any potential resolution though, even if the chances of success are small.

The other 500 LBS gorilla in the room between the U.S. and China will be the Chinese currency that is artificially undervalued and pegged to the U.S. dollar. In an effort to make this happen more easily and friendly, the Obama administration said that it would delay a report about the currency manipulation that China is partaking in. Instead, the hope is that they will either do it on their own, as some economists think they might do anyways, or with more friendly pressure from the U.S. and other global powers that will help push them to let the currency float.

It should be noted that on both fronts, an actual change from China towards what the U.S. is looking for is highly unlikely. At most, China will make some friendly gestures that will save face for both countries (or at least for China, since they care about that so much…) but will accomplish nothing.

I don’t see anyone successfully pushing China to change their currency policy and if the policy does change, it will be as a result of their own decision based on what they believe is best for them and them alone. On the Iranian issue, we might see an eventual resolution that passes the UN with no veto, but it will be a greatly watered down version of what the U.S. will want or what will actually have any chance at doing any real damage to the Iranian leadership.