Analysis: Nobel prize, trade strain US-China ties

[October 09, 2010]  WASHINGTON (AP) -- President Barack Obama's push for China to release an imprisoned Nobel Peace Prize laureate and rising economic and trade friction could aggravate U.S. efforts to win crucial Chinese cooperation on global hot spots.

Caption: Liu Xiaobo, right, poses with legal scholar Zhang Sizhi during a gathering in Beijing in this photo taken in November 2007 and released by Liu's friend on Friday. Imprisoned Chinese dissident Liu Xiaobo won the 2010 Nobel Peace Prize on Friday for using non-violence to demand fundamental human rights in his homeland. The award ignited a furious response from China, which accused the Norwegian Nobel Committee of violating its own principles by honoring "a criminal." (AP photo)

Ever-delicate U.S.-China relations had seemed to be warming, with the countries agreeing recently to end an eight-month freeze on military exchanges. But Obama's praise Friday for Chinese dissident Liu Xiaobo's Nobel award will likely further rattle China at a time when the United States is stepping up pressure on Beijing over a currency policy Washington blames for job losses in the United States.

This recent swing from calls for cooperation to criticism is typical of a complicated relationship that both countries call important for world stability. U.S. officials are trying, with varying success, to press China on economic and human rights matters without jeopardizing Chinese support on Iranian and North Korean nuclear standoffs, climate change and other difficult issues.

The Obama administration says the relationship is mature enough to weather disagreements and to engage in blunt discussions. But Beijing, wary of appearing weak at a time of rising nationalism and deep social turmoil, often bristles at what it views as U.S. interference.

In a statement released hours after Liu was awarded the Nobel, Obama praised the dissident as an "eloquent and courageous" supporter of human rights and democracy "who has sacrificed his freedom for his beliefs."

He praised China for "lifting hundreds of millions out of poverty." But, he added: "This award reminds us that political reform has not kept pace, and that the basic human rights of every man, woman and child must be respected."

Obama called "on the Chinese government to release Mr. Liu as soon as possible." Liu was sentenced last year to 11 years in prison on subversion charges after he co-authored a document calling for greater freedom, among other activism.

Asked about Obama's comments, Wang Baodong, spokesman for the Chinese Embassy in Washington, said Chinese officials "oppose any other countries' meddling in China's internal affairs with any excuses." He said Chinese people "fully enjoy basic human rights."

Beijing earlier warned that the decision to award Liu the Nobel prize would harm relations with Norway, which is the home of the independent Norwegian Nobel Committee, which awards the peace prize.

The United States and China, which have the world's No. 1 and 2 economies, clash on a host of issues. Beijing has reacted with anger and unease to recent U.S. willingness to stick up for friends and allies in territorial disputes with China in the South and East China seas; and to joint U.S.-South Korean military drills in the Yellow Sea, part of which lies within Chinese sovereign waters.

Taiwan and Tibet also are regular sources of tension. China suspended military contact with the United States in January to protest a $6.4 billion U.S. arms package for Taiwan, the self-governing island that China claims as its own territory. Obama also angered Beijing by meeting this year with the Dalai Lama, the exiled Tibetan Buddhist leader whom China calls a separatist.

Obama's praise for Liu comes amid harsh criticism of China's currency policies by U.S. lawmakers faced with make-or-break congressional elections next month. Many lawmakers contend that the Chinese yuan is undervalued by as much as 40 percent, which they say gives Chinese companies a significant competitive advantage over American businesses.

Ahead of this week's global finance meetings in Washington, Treasury Secretary Timothy Geithner ratcheted up pressure on China to make more progress in moving toward flexible exchange rates.

Bonnie Glaser, an analyst with the Center for Strategic and International Studies, said "from the Chinese point of view this looks like a coordinated and proactive U.S. effort to put pressure on China."

"It is particularly sensitive for the Chinese leadership when the president of the United States says something that is implicitly critical of" China, she said.

Both sides, said Glaser, probably will try to tamp down disagreement ahead of Chinese President Hu Jintao's planned trip to the United States next year.

[Associated Press; By FOSTER KLUG]

Foster Klug covers U.S.-Asian affairs for The Associated Press.

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