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Obama's China visit may sow seeds for future debate
But U.S. president gains little ground on the 'yuan issue'
By Chris Oliver, MarketWatch
Last Update: 3:05 AM ET Nov 18, 2009
HONG KONG (MarketWatch) -- President Barack Obama appears to have come away with few tangible gains on the economic and trade front during his first state visit to China, although his message on Internet freedom and human rights are likely to resonate on Chinese Web sites in coming months, analysts say.
Monday's town-hall-style forum, in which Obama took questions from an audience of 400 college students, was aired on local city television but blocked from a full national broadcast, reportedly a backtrack from promises made by Chinese officials.
Some China-watchers said U.S. officials should have pushed harder for guarantees on the broadcast, but cautioned it was too early to say Obama's trip to the country will make less of an impression than Bill Clinton's 1999 visit.
"It's conceivable he will have a large impact ultimately, even though the Chinese tried to restrict him more" than Clinton, said Hugo Restall, editor of the Far East Economic Review.
"Very few Chinese heard what Obama had to say at the time he said it, but in the days, weeks and months to come, Obama's remarks will be repeated over and over again on the Internet and put into the context of other things going on in China," Restall said.
Obama expressed the view that information should be freely accessible -- a view which has a very sympathetic audience among China's vast population of Internet users -- but stopped short of directly criticizing the Chinese policy of Web censorship.
"He avoided triggering the nationalist reaction through criticism of the government while still emphasizing the message of personal freedom," Restall said.
The more nationally minded Chinese Internet blogs focused their criticism on the "groomed" students who attended the forum, many of them reportedly Communist Party student cadres, and the mainly "softball" questions they fielded.
Global partners?
Among the highlights of the trip was a joint press conference in which Obama and Chinese President Hu Jintao spelled out a framework for cooperation on issues including climate change, nuclear proliferation, and efforts to undo economic imbalances and shift away from the U.S. role as perennial user of Chinese goods. See full story on Obama and Hu comments.
Several commentators said the tone indicated a move beyond a relationship based on bilateral ties, setting the stage for a broader engagement of global issues between what many are referring to as the "G2," or the "Group of Two" most important global economies.
Jin Canrong, a professor at the Renmin University in Beijing, said the summit highlighted China's role as a "functional partner," according to his comments published in Hong Kong's South China Morning Post.
Jin described Obama's state visit as a landmark event in terms of getting China to take part in key world issues.
But others criticized the two presidents' statement as mostly rhetoric, unlikely to lead to any substantive moves on the world's problems.
"China may be this anointed super power, but it's offering no solutions or taking any particular action which shows leadership," said Frazer Howie, Singapore-based author of "Privatizing China."
China also appeared to be ignoring calls from the international community to yield to market pressures for a stronger yuan, with Obama and International Monetary Fund Managing Director Dominique Strauss-Kahn -- also visiting Beijing this week -- making little headway on the issue.
"They are doing nothing in terms of currency or anything that would change the rules of the economic game in China," Howie said.
Still, some analysts say Beijing may already be planning to allow at least a small rise in the yuan.
Prior to Obama visit to Asia, China's central bank has made a rare change in wording on its exchange-rate policy, admitting upward pressures on the yuan from surging capital inflows and a weakening U.S. dollar.
The change in language could indicate a return to China's previous policy of allowing a slow appreciation against the greenback. See full story on People's Bank of China yuan statement.
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