Wen Jiabao left New Delhi a happy man. Not only were US$16 billion worth of corporate deals signed during his visit in December – a good deal more than the US$10 billion US President Barack Obama came away with a month earlier – but both sides promised to raise bilateral trade to US$100 billion by 2015.
For neighbors whose ties have historically been strained at best, and who remain involved in disputes over the sovereignty of some border regions, the diplomatic outcome of Wen’s visit was reassuring.
Yet questions remain as to how much China’s state visit to India helped to patch up the countries’ deep-rooted problems, including national boundaries, Beijing’s Kashmir policy, and the more recent issue of the damming of Tibet’s Yarlung Tsangpo river, known on the Indian side of the border as the Brahmaputra.
More of an issue still is China’s security relationship with India’s neighbor, and fellow nuclear power, Pakistan. Following his visit to India, Wen flew to Islamabad. There he oversaw the signing of US$35 billion worth of contracts, including investment in energy, infrastructure and defense.
India’s concerns over military ties between China and Pakistan are shared in Washington, and Wen’s reaffirmation of close ties with Islamabad did little to assuage them. It was not the only sticking point in the US-China relationship as the year drew to a close.
In December, the WTO ruled in favor of Washington’s petition against imports of Chinese tires. The US can now legally impose a levy of up to 35% on Chinese tires following a submission from the United Steelworkers Association in September 2009.
With tire exports to the US totaling US$1.8 billion in 2008 and rising, Beijing’s response was predictable. The Ministry of Commerce said it will appeal the decision and that it was concerned about its “negative effects.”
However, both the US and China have made efforts to minimize the impact of broader trade issues. Both countries announced plans to look into free trade in several industry sectors and to open further avenues of dialogue.
US Commerce Secretary Gary Locke saw the outcome of his talks with his Chinese counterpart, Chen Deming, positively:
“We were able to make progress on significant issues in a number of areas, and on other issues we have established channels that will allow us to continue our robust engagement and pursue timely solutions,” Locke said. Not much, perhaps, but it was a sign that the US-China trade relationship will remain above all a pragmatic one.