Washington’s World: January 17th – January 23rd, 2011

In the first two years of the Obama Administration, initiatives were undertaken to ‘reset’ relations with the Muslim world and with Russia. With the visit to Washington of Chinese president Hu Jintao starting on January 19th, a third such initiative is underway. Secretary of State Clinton, Secretary of Defense Gates and Treasury Secretary Geithner have all made substantive speeches setting out their concepts for the evolution of the relationship with Beijing. The connecting thread between these speeches is an emphasis on the strategic importance of stable US-China relations and a rejection of the proposition that China’s rise to power and wealth necessarily presages a new version of the Cold War. However, the speeches establish specific and frankly worded US expectations for action on the Chinese side desired by the US to mitigate potential tensions. There is no shortage of these. President Obama has signaled his intention to raise human rights problems. Our Pentagon contacts tell us that Gates was dismayed by what he regarded as indications that the PLA has the upper hand in Chinese policy toward the US. Treasury and China-watchers in Congress are also worried that China is failing to address its inflationary pressures through currency revaluation. The outlook for US-China relations is thus, as pointed out by Henry Kissinger, clouded. As one State Department described it to us privately: “We have disagreements with China that are both broad and profound. The essential requirement is to reach a way to handle our disagreements within stable parameters.” Elsewhere, Vice-President Biden’s visit to Pakistan, Afghanistan and Iraq has revived debate about US policy in the region. The rising instability in Pakistan is of deep concern to US officials, with Obama expressing support for President Zardari. However, given the fact that most officials regard Pakistan through the lens of the US operations in Afghanistan, we do not anticipate any lessening of pressure on Islamabad to act against Taliban havens in Waziristan. Biden also warned Iraqi Prime Minister Maliki not to count on US intervention to control Moqtada al-Sadr. In the Middle East, the Administration’s long-standing criticism of Hezbollah in Lebanon is intensifying. Washington will not stand back from supporting Hezbollah’s opponents should Lebanon’s political crisis turn to civil disturbances or conflict. Amid this flurry of overseas trips, the visit by French president Sarkozy attracted little attention. US officials did, however, take the opportunity to express their continuing expectation that the Europeans will take more vigorous action to shore up their economies. Finally, Obama’s speech at the Tucson memorial service has allowed his political standing to improve, an important asset for him as he prepares to deal with the new Congress.