Underwhelmed

The negotiations began long before US President Barack Obama arrived in a rainy and unseasonably cold Shanghai, where he attracted praise for carrying his own umbrella. By the time of his departure, however, it appeared that the highly scripted state visit had achieved little of concrete significance.

The trip came at a sensitive time for the two countries’ relations as China has begun to assert itself more explicitly in trade and diplomatic arenas.

Speaking in Tokyo before his visit, Obama emphasized US support of an economically strong China. "The United States does not seek to contain China, nor does a deeper relationship with China mean a weakening of our bilateral alliances," he said. "On the contrary, the rise of a strong, prosperous China can be a source of strength for the community of nations."

It was a message Obama repeated throughout his trip – despite ongoing trade tensions between the countries – speaking in a "town hall" meeting with Shanghai university students, and in his speech before the issuing of a joint statement with President Hu Jintao in Beijing. Hu’s own speech emphasized what he said were "extensive common interests and broad prospect for cooperation on a series of major issue important to mankind’s peace and stability and development."

Obama’s friendly tone didn’t indicate complete agreement. US officials have made no secret of their displeasure with China’s monetary policy, which has kept the renminbi’s value artificially low. Tellingly, Obama could only praise China’s "past statements" on a commitment to move toward a market-oriented exchange rate; Hu avoided the issue of exchange rates entirely in his remarks.

 Obama was also less conciliatory in other respects. While Chinese negotiators had reportedly pushed for him to publicly oppose Tibetan independence, he called for the resumption of dialogue between Beijing and representatives of the Dalai Lama.

In addition, coming ahead of this month’s Copenhagen climate summit, Obama’s visit was notable for a lack of progress on climate change talks, despite European fears that the US and China would reach a bilateral agreement separate from the main negotiations.

It might perhaps have been too optimistic to expect significant progress on perennial issues of US-China debate in a single trip, let alone Obama’s first state visit to Beijing. Given the wide range of issues on the table – trade, exchange rates, climate change and North Korea among others – it may have been enough that Obama and Hu met in what appear to have been cordial circumstances.

Domestic investors were certainly keen about the prospect of better trade relations between the two countries. The Shanghai Composite Index hit three-month highs as investors bet on a brighter future for China’s exporters and manufacturers. If Obama and Hu achieved nothing else, by reaffirming the increasingly close relationship between the US and China at a time of continued global economic uncertainty, they have at least laid a stronger foundation for future agreements.