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Opinion / Op-Ed Contributors

China, US need to deal with vital issues first

By Douglas Paal (China Daily) Updated: 2015-09-14 07:49

China and the US have had a late and feeble start to consultations on what to do about managing the rules of cyberspace. China has been blamed for alleged massive intrusions, as at the Office of Personnel Management, but not given credit for cooperating in identifying the Democratic People's Republic of Korea perpetrators of the Sony hack. A risk management mechanism is needed, one that involves industry representatives. Talk of sanctions against China may feel good in the US, but the word resonates unconstructively in Chinese public opinion. At their summit, Obama and Xi both should acknowledge there is a problem and give a joint call for a positive program, for reining in behavior that both can identify as criminal.

Turbulence in China's stock markets and efforts to delink the renminbi from the dollar have some American politicians talking about China trying to use its currency to take jobs from American workers. Cataclysmic projections of declining Chinese growth and mounting debt should be left to the opinion columns. Predictions of American failure and Chinese triumph need to be reassessed.

The leaders need to climb to the summit and reassure markets, not alarm them. There are positive stories to tell. China is shifting from investment-led to consumption-and services-led growth. As a result, GDP growth will decline. China's stock markets were overheated and needed correction. The renminbi needs to be more market based and less centrally orchestrated. The US has lowered unemployment, reduced the cost of energy, and sustained demand as the European Union and emerging markets deal with reduced consumption and deleveraging.

In surveying the globe, the two leaders have accomplishments to applaud and challenges to address. The Iran nuclear agreement was achieved with considerable Chinese assistance; Beijing needs also to make clear that it is serious about the consequences if Teheran reneges. Tensions between China and Japan have abated, but not been resolved. Elections in Taiwan in January may require closer consultation. The Islamic State is a threat to both countries' interests. The list of topics is long.

If Obama and Xi can demonstrate verbally and symbolically that they are seriously engaged in the business of delivering global prosperity and maintenance of peace, they will have done well with the last Chinese state visit of the Obama era. They can lay a foundation of stability under what will be two years of fraught politics and challenging frictions as the US transitions to a new administration.

The author is vice-president for studies at Carnegie Endowment for International Peace.

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