China is neither our friend nor our enemy. They’re competitors. – Barack Obama.

Although President Hu Jintao and Premier Wen Jiabao both left messages of congratulation for President-Elect Obama’s , according to China Daily, this comment by Obama’s  has made many Chinese hesitant in their support to the new U.S. President-Elect. My question is why. China has always viewed the United States more as the competition than as a true friend for many years. So, why is Obama’s statement that the United States shares China’s view causing some dismay?

During the past four years, the United States, and especially the Bush administration, has pursued a policy of good will and free trade toward China. Obama’s future policy is still unclear and that unknown can cause a bit of panic, especially in this financial climate.

If Obama’s is right in his assessment of China, does that mean that he is considering less friendly relations? I doubt it. The financial crisis has shown us that the world is too interconnected and the United States and China rely on each other too much to be less friendly.

First, China owns $508 billion dollars of U.S. debt as of October 2008 (approx. 20%). Although it is unlikely that the Chinese will call up this debt, the United States are reliant on the Chinese.

Second, we are in the midst of a financial crisis. China’s $586 billion dollar infusion into the country spurred a strong market showing in Europe, Hong Kong, Japan, and the United States. The World Bank announced that the stimulus package would put China in a good position to expand its economy. An expansion of China’s expansion is good for the United States because it means FDI will gain more profits. It has already shown that the Chinese government has the power to improve confidences in the world stock markets.

Third, Obama’s understands the reality of the United States trade relationship with China. Even though China is a competitor, it is a competitor that has a huge trade surplus with the United States, US$25.3 billion in August 1008. Experts have suggested that a downturn in China’s economy would be even worse for United States markets.

Barack Obama’s point is well intended and an accurate portrayal of our relationship with China. To say that we are not friends is not saying that we are not going to be friendly. China has become a large and powerful force in the eight years of the Bush Administration. It would be unwise to not pursue a friendly policy, but it would imprudent to not pursue the relationship with caution and careful consideration of competing interests.

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