Updated on
Summary
Chinese President Hu Jintao's visit to Washington on Wednesday may be the calm after the storm when it comes to economic relations between the world's two biggest economies.Some US analysts see Hu's trip as the most important state visit in 30 years, as the leaders try to put behind them an unusually stormy 2010 and lock in forward-looking ties for the coming years. Washington and Beijing sparred last year over long-standing issues such as US arms sales to Taiwan, the status of Tibet's Dalai Lama and human rights. They also became embroiled in spats over newer problems including deadly North Korean attacks on South Korea, South China Sea navigation rights, and trade in rare earth minerals. The two presidents have a lot on their agenda, including the state of the global economy, the valuation of Chinese currency, the trade imbalance that favors China, clean energy technologies, human rights in China, the threat from North Korea's nuclear program and Iran as well as China's own growing military. Obama also plans to challenge Hu over China's human rights record; while Hu plans to challenge the primacy of the US dollar and perhaps US fiscal policy in general. But many analysts, like Lieberthal, are optimistic about Hu's visit to the White House on Wednesday. Currency tensions have cooled somewhat. China's high inflation means the yuan has appreciated in real terms considerably more than the nominal exchange rate shows. Republican party gains in the U.S. Congress suggest there may be less pressure coming from lawmakers to label China a currency manipulator or impose stiff new tariffs. And, the US dollar has actually strengthened against a basket of currencies since the central bank announced its bond-buying plan in early November.
