Published on 02/8/2010

It is almost two months now since the Copenhagen climate change conference but one incident from the meeting is still causing a buzz in Beijing. It was the moment in one of the tense final sessions when, according to witness accounts, a Chinese official started to jab his finger at Barack Obama, the US president.

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The Financial Times
By Geoff Dyer
Published: February 8 2010 17:06
Last updated: February 8 2010 17:06

More than anything else, that incident has symbolised what many see as a newly aggressive Chinese approach to diplomacy. As a European diplomat said: “If one of the deputy heads of the planning ministry can behave like that to the American president, how are they going to treat the rest of us?”

Almost every day there appears to be a new source of irritation between China and the US about Tibet or Taiwan or the Chinese currency. That is on top of Google, Iran, tyres and chicken feet. And it is not just the Americans: similar stories are being told by Indians, Russians and assorted Europeans.

There is a ritualistic quality to some of these disputes, especially Taiwan and Tibet. But Chinaseems to be raising the stakes threatening sanctions on US companies selling arms to Taiwan, including Boeing. In lots of ways, China’s pushier approach is understandable. Everyone has been telling the Chinese that they are the coming superpower. It should be no surprise, then, that China wishes to turn that position into real influence over “core” issues.

“We have to show the US that today’s China is very different from the China of eight years ago,” a Chinese businessman said last week, applauding the bolder stance on Taiwan.

Talking tough with the US is popular at home, where nationalist sentiments are often only just beneath the surface. The idea of imposing sanctions on US companies over Taiwan arms sales was touted on the internet and in some newspapers before the Obama administration approved the $6.4bn package. One poll last year found that 50 per cent of Chinese respondents view the US as a threat to China’s security.

Chinese frustrations with the US include some surprises. China’s foreign currency reserves of US dollars are usually seen as a strength, but many in China complain that the government has been talked into buying assets whose value, they think, will inevitably collapse. A headline in Sunday’s China Business News reads: “The US frequently uses cunning tricks to force China to buy its bonds”.

Some of the rhetoric might also reflect growing internal political battles, over the potential for inflation, for instance, or the leadership succession.

But even if such talk is good domestic politics, China is playing with fire if it takes a genuinely harder line with the US. Beijing has a lot to lose if these disputes become more than just a war of words.

The most obvious risk is that Chinese sanctions on US arms companies could help provoke a trade war. There is a cupboard full of bills in the US Congress threatening tariffs on Chinese goods if Beijing does not let its currency appreciate, which are just waiting to be dusted off – especially if unemployment remains high.

More broadly, Beijing’s more abrasive approach risks undermining a decade or so of highly successful diplomacy that has helped sustain China’s booming economy. Beijing has managed to neutralise a lot of potential tensions about the “China threat” by settling border disputes, increasing its participation in international organisations and distributing aid. In Africa, people talk about “stadium diplomacy” because of all the Chinese-built football pitches. The cornerstone of this strategy was making sure relations with the US did not become too fraught.

But if Beijing follows through on some of its sabre-rattling, it could lead to a cascade of tactical adjustments on how to deal with China. In its first year, the Obama administration emphasised engaging China but it could lean more towards containment. Japan, Australia and India, for instance, might be pulled in a similar direction and neighbours in central Asia and south-east Asia could become more wary of being dominated by China. The result would be to make it more difficult for China to do energy-supply deals and open new markets for its products.

China is too powerful to keep following statesman Deng Xiaoping’s advice to “adopt a low profile” and having a louder international voice will inevitably ruffle some feathers. But as China’s leaders ponder how to exert more influence abroad, they need to ask: “Is it really worth tearing up a winning strategy?”