Page last updated at 10:22 GMT, Monday, 15 March 2010

West tries to unlock Chinese puzzle

David Miliband at the UK pavilion at the 2010 World Expo in Shanghai, 15 March
David Miliband has spoken out strongly against protectionism

By Paul Reynolds
World affairs correspondent, BBC News website

A visit by the British Foreign Secretary David Miliband to China coincides with a growing sense in the West that efforts to draw China into a global trading and diplomatic system are faltering.

There are immediate issues - the value of the Chinese currency, the debate over further sanctions on Iran, the continuing spats between the US and China over Taiwan, trade and Tibet, the global warming debate.

And there are longer-term ones - what role China will play as a major economic and diplomatic power. Will it be content to take a back seat in world affairs indefinitely, concentrating instead on building up its manufacture and its sourcing of raw materials from around the world?

Mr Miliband's visit will not provide immediate answers, of course. Dealing with China requires a long view. The Chinese themselves take such a view. China after all was content to wait a century for the return of Hong Kong.

The West will have to wait to see how China evolves over perhaps decades.

Protectionism

But this kind of visit provides some evidence of Chinese attitudes and some opportunity to make a case to Chinese leaders.

Mr Miliband did that on the economic front in a speech in Shanghai on Monday in which he spoke against protectionism.

Hong Kong skyline
China knows the long game - it waited a century for Hong Kong's return

"The danger is that if growth remains sluggish, states will be unable to fall back on fiscal and monetary tools to support industry and may be tempted by protectionism as an alternative... There is a clear case for partnerships here between... China and its largest single market, the EU," he said.

China might not be that impressed. Only the day before, after the week-long annual National People's Congress, Prime Minister Wen Jiabao had said he did not understand "the practice of depreciating one's own currency and attempting to press other countries to increase theirs, just to improve exports".

China also knows that a rise in the cost of its astonishingly cheap exports of consumer goods would lead to a rise in the cost of living in many Western countries and would not be popular in those countries. So it has a good set of cards to play.

On several fronts, therefore, there are signs that China is determined to show that it is not a push-over.

But nor, it seems, does it want to be seen as a difficulty.

Iran sanctions

This balancing act is at its most delicate when it comes to Iran.

Iran continues to ignore the demands of the International Atomic Energy Agency and the UN Security Council for it to stop the enrichment of uranium.

China agrees that Iran should comply but does not, yet at least, agree that the time has come for a new and tougher round of sanctions on Iran.

The US and its allies want such a new regime imposed by the Security Council, where both China and Russia have a veto.

Russia has hesitated but seems more willing now to go along. If Russia does, Western diplomats hope, then so might China.

The problem is that getting China on board the sanctions ship means lightening the ship by throwing out many of the heavier items on the sanctions list - such as action against Iran's oil and gas industry, which sells heavily to China.

But getting Chinese agreement, or even acquiescence (that is, an abstention) in the Security Council, would increase the diplomatic impact of any measures.

Sir Percy Cradock, the British diplomat who negotiated the transfer of Hong Kong to China, once gave some advice on the realities of dealing with China.

Speaking to reporters at a reception at the British embassy in Beijing, he remarked that with China "you have to keep your eye on the ball, not the crowd".

The ball at that particular stage was the building of a new airport for Hong Kong, which was eventually agreed.

"That was the prize," said Sir Percy. And what about other issues, human rights for example?

"Froth", he replied with a smile.

Paul.Reynolds-INTERNET@bbc.co.uk



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