David Usborne: The President knows China has the power to spoil his agenda

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Independent Voices

These foreign trips of Barack Obama are always such heady affairs. Thousands cram castle plazas in Prague or – even before his election – boulevards in Berlin. But China is proving quite a lot different. Rather than witnessing another love-fest, we are left to ask, who is more afraid of whom during this visit?

Government heavies reportedly barged into souvenir shops in Beijing last week demanding that goods bearing the Obama likeness be removed from shelves, especially so-called ObaMao T-shirts melding his face with Chairman Mao's. Negotiating the format for Mr Obama's town hall meeting with students in Shanghai took weeks, with China trying to have questions and the students screened first. (They weren't.) Equally telling was the near blackout of the town hall when it happened.

Yet Mr Obama declined to meet the Dalai Lama when he visited Washington recently, because he is just as nervous about China. He may have the power to pollute the minds of China's web users with thoughts of real democracy, but China has the power to muck up half of his entire political agenda. Ask an American voter about China and they will voice vague unease without knowing why exactly. Mr Obama knows why.

On the economy, the problems between the two countries extend far beyond cheap toys with toxic paint. Trade spats are getting louder nearly ever week, touching commodities from tyres to paper, and beneath that lurk all the tensions over currency policy, with Beijing still refusing to let its currency rise in value, something that would ease the imbalance of its huge trade surplus with the US. As America fights a 10 per cent unemployment rate, China keeps pushing a 10 per cent economic expansion rate.

"We do not seek to contain China's rise," Mr Obama said on the first day of his visit. But Washington and other capitals are seeking a more collegiate China, especially on currency matters. And it is hard for America to lecture China on economics when it is the holder of so much of its debt. Uncle Sam owes money to China like to no one else in the world. The truth is, China has risen already.