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White House Debating Just How "Hard to Poke" Xi

September 22, 2015
Barack Obama and his advisers are debating just how hard to poke Chinese President Xi Jinping when the Chinese leader arrives for a state visit Thursday, according Joseph Marks, Jason Huffman, Bill Tomson, Andrew Restuccia and Doug Palmer at Politico.

...They want to communicate they mean business, but not imperil a trade relationship worth $590 billion last year...

Even so, Xi is expected to get deluxe treatment at the White House, which will offer the Chinese leader the full head-of-state status he craves as he consolidates authority at home and continues to establish himself as China's most powerful leader since Deng Xiaoping....

Beijing's goal is largely about optics: Xi wants to show his domestic audience that Obama is receiving him as a peer, reciprocating a state visit that Obama and his family made to China earlier this year.

POLITICO looked at the progress that could and could not be  possible during Xi's visit: While the full article covers cyber-security as well as defense, BIO highlights the topics of climate change, trade and agriculture.

Climate Change

Climate change is one of the few bright spots in the U.S.-China relationship.

After decades of animosity over which nations should bear the burden for cutting greenhouse gas emissions, the two countries revitalized their relationship late last year with a surprise joint announcement in Beijing between Obama and Xi. The two leaders pledged to curb their greenhouse gas emissions in the coming decades and in so doing injected new momentum into foundering international climate change negotiations.

Despite tension with China on other issues, the administration views its collaboration with Xi on climate as crucial. Without China on board, Obama's hopes of clinching an ambitious climate change deal in Paris later this year - by all accounts one of his top second-term foreign policy priorities - would be dashed. As the planet's largest greenhouse gas emitter and an influential developing country, China is an essential component of the agreement...

...After the embarrassment of the near implosion of the Copenhagen deal, the Obama administration embarked on a years-long crusade to transform China from an adversary to an ally on global warming...

...Since last year's high-profile climate announcement between Obama and Xi, the administration has continued to cultivate the partnership between the two nations...

Trade

Hopes that Xi would usher in a new era of economic reform when he was installed three years ago, haven't materialized. That has focused attention on the negotiation of a bilateral investment treaty, or BIT, which the American business community hopes could strengthen the hands of the reformers in the same way that talks on China's entry to the World Trade Organization did in the late 1990s...

...China currently restricts investment in over 100 industry sectors, ranging from manufacturing to services to agriculture, which U.S. business leaders hope could be opened under the pact. They also are pushing for rules in the agreement to provide fairer treatment for American companies in the Chinese market...

...The two sides have already held 21 rounds of talks on the pact, including this month, when they exchanged new "negative lists" of which sectors they wanted to keep closed to foreign investment. One U.S. industry official, speaking on condition of anonymity, offered a glum view of the negotiations, saying China was "not even in the ballpark yet" in terms of which sectors it was willing to open.

A strong push by Xi could accelerate the process. That could be important to China as well as the U.S., as China struggles to hit its 7 percent growth target this year, down from the double-digit levels of the past, which were driven largely by exports and infrastructure projects.

"If China is going to achieve its new-normal level of growth, which is this 7 percent target ... they're going to have to be more connected with the world economy than they have been in the past, which is fundamentally going to require significant reforms," said Stefan Selig, the Commerce Department's undersecretary for international trade.

Although small compared with two-way investment between the United States and Europe, which totals around $4 trillion, U.S. company investment in China reached about $66 billion by the end of last year, compared to $19 billion in 2005.

Almost half of that is in manufacturing sector, including such areas as chemicals, food and machinery.

Chinese investment in the United States also has increased significantly and totaled $54 billion by the end of June, according to the Rhodium Group's "China Investment Monitor."...

Agriculture

U.S. farmers are optimistic about what they could gain from Xi's U.S. visit.

The meeting is expected to be the first installment in a dialogue on agricultural biotechnology issues the two countries agreed to in November when the leaders previously met.

China is a much-desired export destination for genetically modified corn, soybeans and various other crops. However, its process for approving such crop imports is frustratingly opaque. China waits for other countries, such as the U.S. and Brazil, to okay crops before even beginning its own review. The years-long delays have long frustrated U.S. agricultural groups...

USDA officials have been working for more than a decade to overcome Chinese concerns about U.S. rice, including several last-minute pest control worries.

In another piece, Politico's Doug Palmer states that U.S. Trade Representative Michael Froman said that Agriculture Secretary Tom Vilsack and he would meet with their Chinese counterparts "to talk about improving agricultural trade, including approving several applications for biotech products that have been in the pipeline for too long."

Froman argued that "U.S. officials will also urge China to bring its agricultural product approval process in line with best standards from around the world."

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