Fishing for Answers

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To the state guest house Diaoyutai yesterday for a briefing on the upcoming talks between the U.S. and China on prickly trade and economic issues. A bunch of reporters from U.S. publications sat on one side of long table and chomped our way through a 8 course feast ranging from stewed duck and mushrooms to steak and pea soup as senior Chinese officials briefed us on their take on the talks, which are the second round of the Strategic Economic Dialog and will be held from May 22-23 in Washington. The talks make good TV, with lashings of soberly suited cabinet minsters and other senior officials gravely discussing the issues of the day. But I got the feeling from the briefing that the Chinese are perfectly aware that they are very much for show: the Bush administration wants to show Congress it is moving at the highest levels to try and get some action out of Beijing on allowing China’s currency to appreciate so as to reduce the huge trade deficit. Beijing is equally eager to show it is doing all it can to cooperate–short of actually allowing the renminbi to climb strongly, something the Chinese quite rightly fear could cause their country all sorts of economic headaches and might not achieve its stated purpose anyway.

Diaoyutai reeks of history–Kissinger was woken up here in the middle of the night back in 1972 for an audience with Mao Zedong–and still retains a very strong air of the old days, with its chandeliers, huge paintings and overstuffed armchairs complete with antimassacars. Very civilized if you like that kind of thing. Mao kitch. But the officials briefing us are likely to find the atmosphere considerably less polite when they finish their talks in Washington and visit Congressional leaders on the Hill. “To be frank we need to get more knowledgeable about the political system of the United States,” one official said rather plaintively, expressing puzzlement about how you can deal with a system where “every senator seems to think he is the president and every house member thinks he is the vice president.”Of course, dealing with democracies always seems messy to those who have the advantages (?) of an authoritarian system. But still, he has my sympathy, up to a point. Dealing with a populist Democratic Congress baying for the blood of a president so lame he can hardly order a coffee without having to threaten a veto will be a nightmare. Personally, I’d put my money on some sort of pointless protectionist action within nine months. That 400 billion dollar deficit is just too tempting a target and the whole house is up for re-election in 2008, so……